FHB stats tell the real story + Why property might not be your bag + Flawed investment thinking

Highlights from this week:

  • Investment ‘flawed thinking’
  • Cities with lowest deposit thresholds
  • Tragedy inspires industry support
  • First Home buyer numbers grow
  • Why property might not be right for you


Investment ‘flawed thinking’ – Miriam Sandkuhler

Kevin:   Investing in property isn’t always as easy as it looks. You know, good people, with anything, make lots of things look really, really easy. And that’s why they’re so good at what they do. But flawed thinking in property investment is something that we should look at from two sides, both the buyer and the seller. Helping me to do that, Miriam Sandkuhler from propertymavens.com.au.
Kevin:   Good day, Miriam.
Miriam:   Hi, Kevin.
Kevin:   Flawed thinking.
Miriam:   Flawed thinking, yeah.
Kevin:   Yeah, tell me … Well, firstly we’ll deal with, maybe with buyers, hey? What do they do?
Miriam:   Absolutely. So I think over the decades, buyers have been conditioned to think that buying property is really easy, and to be honest, signing the contract’s easy, but also so is making mistakes is really easy. And buying property is actually quite complex and buying an A grade property is really difficult. So, unfortunately, people put less time into research and due diligence on buying a property than often what they do on buying the latest phone.
Kevin:   Do you think that they just rely too much on some of the information they hear? You know, in shows like ours, with respect, and without doing their own due diligence and taking responsibility for their own decisions?
Miriam:   Yeah, absolutely. Look, free advice isn’t free. Often it’s sales advice or it’s biassed advice. And you’ve got to understand, you get what you pay for. So it is, “Buyer, beware.” So when someone makes that mistake, and they’re basically gambling with hundreds of thousands of dollars if they’re not doing their due diligence or getting expert advice, you know, they can’t really turn around and go, “Woe is me.” Because they had the choice of paying for a professional and choosing not to use one. So, yeah, it is, it’s, “Buyer, beware.” And you hear mostly about people doing well. You never hear the stories of how people get it wrong, because often they’re too embarrassed to share it or it puts them off property investing for life and they think property is a bad thing, but they don’t realise their lack of due diligence was what the issue is.
Kevin:   Yeah. Any other good advice you’ve got for buyers to get their thinking straight?
Miriam:   Yeah. So people confuse cheap property with being a good property. You know, the reality is, a bad property at a discount is still a bad property. So people need to understand that cheap … You know, if everyone wants a bargain, just cause you get a property at a discount doesn’t mean it’s actually a good property. So be aware of that.
Miriam:   Waiting for the market to hit bottom before you buy is a little bit nonsensical because they usually don’t know it’s the bottom until they’ve missed it and it’s started rising again.
Kevin:   That’s right.
Miriam:   Cause otherwise, how are you gonna know where the bottom is? And when I say to clients, you know, “Great, can you tell me when that will be?” They just look at me blankly, because of course they don’t know. So sometimes that’s an excuse to procrastinate or do nothing.
Miriam:   The other flawed thinking that people make is they look at what they’ve bought and how they’ve invested and they see that they’ve made some money, and they might’ve had say 3% capital growth for over five years, but they don’t realise they’ve actually missed out on possibly 10% capital growth if they had more knowledge and bought better. So they mistakenly convince themselves they know what they’re doing cause they’ve made some money, but they don’t realise what they’ve lost.
Kevin:   Yeah. “Any gain is better than no gain at all.” That’s the thinking.
Miriam:   Yeah. Yeah. And, unfortunately, any gain automatically gives them confidence in their ability to buy. And sometimes it’s just dumb luck. So they mistakenly think that they don’t need help because through circumstance or dumb luck they’ve made a little bit of money and they think, “Great, we’re off and running, we can do it ourselves.”
Kevin:   Yeah, the unfortunate part is is that many people never learn that lesson until they actually make a mistake, which in some cases can be quite devastating.
Miriam:   Oh, totally. And I’ll never forget, I had a lady once, and it was just to understand where she was coming from. I said, “Would you pay an expert $10,000 to ensure you don’t make an $800,000 mistake?’ And she said, “No.” And I went, “Okay, well good luck with that.” I just couldn’t understand her thinking. She’d rather make an $800,000 mistake, than pay a professional 10 grand to ensure that she didn’t.
Kevin:   Yeah, well in that case it’s a matter of, “Oh, well I’m not going to make that mistake anyway, so I won’t have to invest that money.” But, you know, sometimes, as I said, we learn the hard way, don’t we? By making the mistake. Yeah.
Miriam:   Absolutely. And then it’s too late to do anything about it. And then there’s a whole lot of other stuff and emotions that come into play and all the rest of it. So that’s on the buyer’s side. And then, of course, there’s the vendor side that has flawed thinking as well.
Kevin:   Okay, let’s walk through some of them.
Miriam:   Okay. So typically what they think their property is worth versus what the market value is or what someone’s prepared to pay for it. So they’re often starstruck with their own property. They often delude themselves into thinking that their property is worth much more than everything else in the street because they have an emotional attachment to it.
Kevin:   Yeah. And I’ve heard them say too, “Oh, but look, I need $600,000 so I can buy my next house.” Well, it doesn’t matter what you need, it’s what the market wants to pay you. That’s what it’s worth.
Miriam:   Exactly. The market is always based on what someone’s willing to pay for it. So when they put themselves in a vulnerable position of maybe having bought first and then having to sell for a price because they’ve maybe bought, spent too much beforehand, that’s where they’re totally vulnerable and where they can also kill their campaign totally. Sometimes not understanding the speed of a campaign and not preparing for it. So, for example, it might be that they list their property in a private campaign, private sale, and they could get an offer in the first week. And then I start thinking, “Oh, well, no, let’s wait for a better offer,” because they’re actually not emotionally or mentally ready to move on. So they kind of think, “Well, if we wait, we’ll get a bigger and better offer down the track,” but of course there’s no guarantee of that. And often we know that sometimes the first offer is often the best.
Kevin:   Yeah, that’s a dilemma for agents too. And no matter how many times I’ve had to tell someone that, they always say, “Oh, yeah, that’s just you talking.” But the fact is, Miriam, that the pool of buyers currently in the market now is likely where that early buyer will come from, they’re extremely educated cause they’ve been in the market, they know value, and they’re probably frustrated enough to make you an offer that is reasonably good.
Miriam:   Yeah, absolutely. So sometimes timing the offer and understanding where the campaign’s at, you know, should really dictate when you put that offer in. Because it is about understanding you’re working with a vendor, and the vendor will make up stuff in their own head if you’re too enthusiastic sometimes as well.
Miriam:   The other thing vendors do is they want to wait to the top of the market before they sell.
Kevin:   That’s a bit like the buyers, only in reverse.
Miriam:   Exactly. It’s exactly like that. But, again, sometimes markets can be slower to to rise, and much more quickly do they fall. So the risk in that is you don’t know it’s the top until you’ve missed it. And then if you’re on the downhill slide and you’re not coping with the fact that it’s a downhill slide, you know, you can be resistant to taking less money than what you thought you’d get while it was on the upside. So that’s where they create problems for themselves in. And as we spoke about before, maybe putting on a ridiculous reserve based on emotion because they’re either genuinely not intending to sell, so they’re sabotaging, or they’ve put themselves in a position where they’ve bought and they need more money and therein lies their justification.
Kevin:   It’s funny, you know, when real estate agents either buy or sell a property, it’s almost like they go to vendor school and they learn all this stuff that you’re talking about because they do exactly the same thing. Even them, as the most educated people, they’ll wait for a better offer on a property that might be selling, or they’ll wait for the bottom of the market to secure a better buy. It’s almost like we go to to seller and buyer school.
Miriam:   Well, it’s quite fascinating. From a psychological viewpoint, you know, if you can stand back and just observe it, it’s quite fascinating to look at how people think. And then, for me, having conversations with buyers and vendors around, “All right, well, I appreciate where you’re coming from, however, did you think about this?” Or, “Did you know that?” Same as when people say to me, “I only want to pay extra property,” it’s like, “Well, that’s great, but what you want to pay is irrelevant. You know, we have to consider where the market’s at and where the competition’s at. So let’s focus on what you need to, you know, pay to buy it rather than what you want to pay. Because, of course, no buyer ever wants to pay more than they want to pay. And no buyer ever wants to pay too much. And no vendor ever wants to sell for less than what they want either.” But if you don’t shift your thinking on either side, often you can end up without getting the outcome.
Kevin:   Great stuff. And, Miriam, always makes a lot of sense. Thank you so much. And I hope we’ve snapped a few people into reality, not just buyers and sellers, but real estate agents as well. Miriam Sandkuhler from Property Mavens. Thank you so much for your time.
Miriam:   You’re very welcome, Kevin.

Why property might not be right for you – Shannon Davis

Kevin:   When done right, property investment can be lucrative and can give the investor financial security in the long term. However, there are many reasons why property may not be right for you, and these should be carefully considered before making your first investment. They are very wise words. They’re taken from a blog article that you’ll see in a lot more detail on our website propertytv.io. The author of that is Shannon Davis from Image Property. Good day, Shannon. How are you doing?
Shannon:  Good day, Kevin. Good, thanks.
Kevin:   Very wise words. I want to pick up on a few points that you’ve made in there that just make for a little bit of interesting conversation between the two of us, and great learning I think for anyone who wants to get into property investing. You make the point that prices don’t always go up, yet we look at property, don’t we? And investment in property with an expectation that it’s always going to grow.
Shannon:  Yeah. There’s the old saying that they always go up, but it’s not always the case. You have times when the market peaks and the market comes back, and also you have things where there’s not really a lot of scarcity, so there’s a lot of things happening on the supply side and that can have downward pressure on your property. So, to think that it’s simply buy a property and you’ll be wealthy, there’s a lot more to the art than that.
Kevin:   Yeah, there’s also a matter of holding property, and we’ll talk about that a little bit later in our conversation as well because we got very used to just buying a property and then they would go up in value over a decade or maybe 20 years. So we just got very used to thinking that was always the case.
Shannon:  Yeah, definitely, and that gives the investor a false sense of confidence and the property mistakes can be big mistakes. You’ve got a lot of leverage there, and leverage either maximises your gains or maximises your losses. So it’s something to be wary.
Kevin:   Another thing that you be aware of if you’re going to become a property investor is that not everyone’s going to be happy that you are a property investor because everyone naturally, well not naturally, but everyone does assume that you’re rich. You’ve only got to look at the debate over negative gearing and how that’s all centred around all investors are just greedy landlords, Shannon.
Shannon:  Yeah, definitely. The governments keep on looking to property investors to prop up the budget, and they’re copping it in the neck with land rates, water usage, negative gearing, land tax, capital gains tax, and then you’ve got potentially tenant requests, QCAT, all administrations moving against the landlord or owner all the time. So, it can be a difficult task being a landlord.
Kevin:   The first point we made about prices not always going up is quite relevant to the next point that we make, and that is that this a long-term play. You’ve got to have patience. Though I guess there are times and situations where you can get in and get out of a market and flip property and make a good profit, but they’re becoming fewer and fewer I would have thought, Shannon.
Shannon:  Yeah, well, I think when a person makes a big, significant gain in a short time turnaround, it’s really the toppy part of the market, the top of the market. So, if you’ve absolutely timed your exit, then yeah, by all means you’ve probably done it, but that’d probably be the most dangerous part of the market to be investing, I think, when everyone’s talking about property, the crowd’s arriving late … The top of the market’s being reached, and there’s not much value to be had. That’s probably the worst time to be investing, I think.
Kevin:   Another one too, and that is it’s all about risk, and this probably is worthy of a few points, but there is risk in any type of investment. If you are risk-adverse, then maybe property’s not right for you. Maybe you should leave your money in the bank, Shannon.
Shannon:  Yeah, definitely. You’ve got the market risk. We’ve also got the risk of tenant injury. We’ve got risks of natural disaster. We’ve got risks of fire, and things like that, so there’s a bit of a risk attached to it, and over time, that level of risk, as long as you’re fully insured and you’ve seen out a few property cycles, you should be able to get significant gains, but it’s having the patience to do that.
Kevin:   And you’ve got to be prepared too to spend money. Your property needs to be maintained. It needs to be well maintained to keep good tenants in it as well.
Shannon:  Yeah, a property that is falling further and further behind, in quality starts to get more and more problems. The references of the tenants dropping from there. You’ve got other problems like collecting the rent or damage and things like that. It just becomes a cycle of obsolescence.
Kevin:   I’ve seen on many occasions too, and I guess in a way, I class myself in this in my early investment journey, and that is that people who get in not understanding that it is going to be a struggle. The first few years, I think you quote seven years, are going to be the worst. You’ve got to be prepared for that.
Shannon:  Yeah, definitely. When you plant a tree, you’ve got to support it at the start and give it some strength and water, and years later provide the shade. I think of property as similar to a small sapling in the beginning.
Kevin:   There’s another aspect too to property investment. When we look at investment and we say, “Well, where’s my money better? Is it in shares? Is it in property? Is it in the bank?” With shares and leaving your money in the bank, it’s very liquid, but property takes some time to liquidate if you need it quickly, Shannon.
Shannon:  Yeah, and that can be a good and a bad thing because prices won’t come off as quickly as much as a share market correction. But also when you need the money, like yesterday, you’ve really got to be prompt. The earliest you can see that money back into your account probably is 30 to 45 days. Even then, you might need to meet the market and accept a lot of conditions from the buyer.
Kevin:   Yeah, great stuff. I guess the bottom line here is that if you treat your investment as a business, you can’t go far wrong. You’ve got to increase your chances of success if you do look at it as an investment, not going into it purely as a whim.
Shannon:  Yeah, definitely. Annually check how your rent’s going and your capital growth’s been and see if it’s all been worth the while after the maintenance and all the bills that a property investor has to incur.
Kevin:   Very wise words there from Shannon Davis at Image Property, and you can read Shannon’s full piece, his excellent blog currently on the site, propertytv.io. Shannon, thank you very much for your time.
Shannon:  Thanks, Kevin.

Cities with lowest deposit thresholds – Dr Nicola Powell

Kevin:   Australia’s property markets are changing and in most capital cities, the long path to purchase has become a little bit shorter. It’s news that’s going to be welcomed by would be first home buyers faced with a difficult financial hurdle of saving a lump sum deposit amidst rising living costs and low wages growth. With buyer urgency having largely dissipated in most cities, perspective first home buyers can now focus on building a savings plan to gain entry into previously competitive markets.
Kevin:   The Domain First Home Buyer’s Report identifies the cities and areas that offer the lowest entry point. And joining me to talk about the report, Dr. Nicola Powell, who is the senior research analyst from Domain. Nicola, if you don’t mind me calling you Nicola, happy to call your doctor, but Nicola sounds better.
Nicola:  Nicola is fine.
Kevin:   Good on you, thank you. Nicola, whereabouts, well firstly tell me how did you go about doing the research? How was it conducted?
Nicola:  Yes, certainly. So what we did is we focused on the entry level prices, which we deemed as the 26th percentile. And if you look at that entry level price, it’s really what’s in the realm of what a first time buyer will be looking at. And then we actually calculated the time to save.
Nicola:  So we actually focused on, it was a couple, they were aged between 25 and 35 years old in each capital city. And we used those estimates of income from the ABS. We factored in that wage price growth and we assumed that they were saving 20% of their post tax income. And so we calculated how long it would take to save the 20% deposit in all of our capital cities. And we also drilled down into some of those smaller areas, so SA4 areas and also SA3 areas to see where the quickest path to home ownership was.
Kevin:   Yeah, without a surprise, of course Sydney being the worst, so that was where the most time was needed?
Nicola:  Absolutely. So Sydney without doubt remains the most expensive of all of our capital cities. And as a result, has the longest path to purchase. But I will say for Sydney, we had seen affordability improve the most for entry level buyers when compared to any other capital city. We saw that it took six years, two months to save for an entry level house in Sydney, five years, four months to say for an entry level unit.
Nicola:  But when you have a look at the difference between this year and last year, we’ve seen five months shaved off of that journey time. And that had been because we are actually now seeing those entry level prices soften. So it is a bit of good news for those in Sydney looking to get on to the property ladder.
Kevin:   Where in Australia do you need the least time to save that deposit?
Nicola:  So in terms of the least time, it really is Darwin, which is the most affordable. But also Perth. I mean, we know that Perth’s had a number of years of challenging conditions that I think this is welcomed news for first time buyers and we continue to see that pathway to purchase fall in Perth. It’s only three years, six months to save a deposit for a house and for a unit two years and four months.
Nicola:  What was interesting about Perth, actually one of the quickest journey times was actually Perth inner CBD area. The journey to saving for a unit was much quicker than compared to any other kind of SA4, SA3 area in our greater capital areas.
Kevin:   I think everyone in Australia has been watching with great interest the development in Hobart in recent years, just the growth there. How has that reflected in the time required to buy?
Nicola:  Hobart suffered the most really in terms of affordability because it has declined. The journey time to save for a house and a unit increased increased by six months. Hobart may have the lowest entry house prices when you, and unit prices, when you compare to some of the other capital cities. But the steam that Tasmania had and Hobart has is the lowest wages. And so what we’re seeing there, entry level prices are really escalating at a greater pace than what we have seen wages growth. And the fact that they’re having to save six months longer really shows that that savings goalposts continually gets pushed further and further away for anybody really fighting to try and get on that Hobart property ladder.
Kevin:   What about Adelaide? How did that fare?
Nicola:  So Adelaide was kind of middle of the road in affordability. It was one of the more affordable areas, cities to purchase. So three years, 11 months to say for an entry house and for a unit, two years and 10 months. Now it was a bit of a fit reverse in terms of the performance of houses and units. Houses we did see that journey time increased by a month where units declined by one month.
Nicola:  But in terms of areas, it’s the north of Adelaide that really has this pocket of affordability for first time buyers. I think when you compare it to some of the other capital cities, you can purchase a house in reasonable distance to the CBD at a fairly short journey time to save that 20% deposit. So for me Adelaide was actually pretty affordable and was one of the better cities when you’re comparing them all.
Kevin:   Nicola, what about the region? So moving just outside of the capital cities themselves, were there any surprises there?
Nicola:  So in terms of regions, we did focus on the greater capital areas. But when you say, for example, when you look at greater Sydney when we’re trying to pick out some of those more affordable areas, it really is a central coast, which falls as part of that greater Sydney area and the outer southwest and outer west that had the most affordable journey times. It’s really the logic that we see with big cities is the further you get to that urban fringe, the cheap it got, it has become to get onto the property ladder.
Nicola:  And maybe when you look towards Sydney, central coast has been a magnet for first home buyers, and you can understand why. It’s such a shorter journey time to save. While the option in the central coast, four years, six months to purchase a house studies is significantly shorter than the overall for Sydney, which is six years and two months.
Kevin:   Nicola, thank you so much for your time. I’ve been talking to Dr. Nicola Powell, who was the senior research analyst at Domain. Thanks for that report.
Nicola:  Thank you.

First Home buyer numbers grow – Peter Koulizos and Kelvin Davidson

Kevin:   First time buyers have always been a vital cog in the health of any property market. However claims that they’re currently struggling to get on the ladder, are not supported by official statistics, according to Property Investment Professionals of Australia, PIPA, who we are great supporters of. Peter Koulizos joins me from PIPA. Peter, your research, what’s it showing?
Peter:  Well the first-time buyers are relatively active. They’re slightly higher than the 10-year average. There’s a couple of concrete reasons for that. Firstly, it’s harder for investors to get in the market, because investors need a 10% deposit, whereas first-time buyers only need a 5% deposit.
Peter:  Investors now have to pay a higher interest rate compared to first-time buyers or owner occupiers. So despite that, it is hard to borrow money, whether you are an occupier or an investor. First-time buyers are certainly getting into the market as we speak.
Kevin:   Yeah, I know that we’ve covered a fair bit about what the banks are doing and how much they’re clamping down on lending. They’re obviously also taking a bit of a favourable reaction to applications from first-time buyers?
Peter:  Yeah, well because like I said, it’s much harder for investors to get into the market. Banks need to keep their income up, their profits up, so certainly attracting first-time buys with some great honeymoon rates and offers out there.
Kevin:   Okay, well let’s flip the coin. That’s all good news. It’s great news for first-time buyers, but is it coming … you know making housing more affordable, but is it coming at a cost, Peter?
Peter:  Yes, it is. Look, I’ve gone on about this forever and ever, so I don’t want to harp on it too much, but the proposed Labour Party changes to negative gearing and capital gains tax, they want to get the first-time buyers in the market by making housing more affordable.
Peter:  Well more affordable is just code for dropping house prices. And there’s a number of property experts that have said that property prices will drop if this comes in. And we only need to go back to 1985 when something very similar happened and property prices dropped by 10% over two years.
Peter:  So I think there are much better ways to get first-time buyers into the property market, rather than have values all across the country drop just to allow them to get onto the property ladder.
Kevin:   Yeah, that’s great news, so what are the … What do you think they should be doing, Peter?
Peter:  Well, first I think we need to specifically target certain first-time buyers. For example, we need to limit it to those people who are on a certain income. So somebody on 250,000 a year doesn’t need as much help as somebody who’s only on 70,000 a year.
Peter:  We also need to limit it to the less expensive properties, so you don’t need a first-time buyer that’s going out to buy $2 million property, because you obviously don’t need much help to do that. But most people are looking to buy a three or four or $500,000 property do.
Peter:  If you want to get more first-time buyers in the market, you need to extend it to more than just new property, because new property is only 2% of the whole property market, so it’s very hard to help people when you’re only fiddling with 2% of the whole property market.
Peter:  At the current level, a first-time homeowner grant is not that high. When we got our first homeowner’s grant back in 1984, it was a much bigger proportion of the median price than it is today. So I think the government needs to either increase the grant or some new strategy that I have is instead of it being a grant, it’s an interest-free loan.
Kevin:   Yeah.
Peter:  So with a grant, they take the money, and it’s gone, but with an interest-free loan, they have to give back the money, just the same money that they took from the government in the first place. But then when that money is put back, that goes into a pool, so it can be dished out to other first-time buyers.
Peter:  So you’ve got a … What you’re doing here is we’re giving a leg up to some first-time buyers. Let’s give a leg up to even more first-time buyers and to help them get into the property market.
Kevin:   Yeah, because I love the idea of interest-free loans. It’s a much more concrete way of helping people, not only initially get in, but to stay in the journey.
Peter:  That’s right. That’s right. I understand a grant costs the government money, because it’s here now, gone tomorrow.
Kevin:   That’s right.
Peter:  But the beauty with a loan is they will get that money back. And I understand if they gave them, for example, $20,000 today, getting back $20,000 in 10 years time is not the same $20,000 purchasing power, but at least it’s something, and it’s helping more people get into the market over a few years.
Kevin:   Peter, great talking to you. Thank you very much. PIPA, of course always coming up with some very constructive ways to keep our market moving, Peter Koulizos has been my guest, and great news Peter that we’re seeing that surge or that we are actually helping first-time buyers get into the market. So Peter thanks for that good news.
Peter:  Pleasure, anytime. Thank you Kevin.
Kevin:   Yeah, thanks Peter, and we’re seeing a similar picture in New Zealand where mortgage lending activity rose again in February, with the growth in loans to first home buyers with LVRs, 80% far outstripping overall volumes.
Kevin:   Core Logic’s New Zealand’s senior property economist, Kelvin Davidson, joins us. Kelvin, welcome to the show once again. I understand also that banks are still pretty cautious about who they lend to.
Kelvin:  Yeah, absolutely. It’s been a situation in New Zealand that we’ve had for a while now that they really, really look closely at borrower’s income and expenses, particularly on their expense side, they really got strict tests on that now, as well as obviously you need to raise the sufficient deposit.
Kelvin:  And also there’s a bit of risk testing going on around your ability not only to service current mortgage rates of four or 5% but also whether you could pay that debt if they jump to 8%. Yeah, pretty tight still.
Kevin:   Yeah, because last year we had those mortgage rate wars. I believe there’s an indication that may be rekindling?
Kelvin:  Yeah, oh, yeah, banks are really jumping into that. HSBC lead off with a couple of weeks ago with a two-year fixed rate at 3.69%, which was the lowest ever seen in New Zealand over 50 or 60 years.
Kelvin:  Then probably three or four other banks have joined the party in the last weeks, so yeah, there’s some pretty handy deals out there if you can raise that deposit and prove that you can pay the debt. Once you pass those hurdles, you’re going to get a pretty keen rate.
Kevin:   Because your report also indicates that we’re seeing larger average loans rather than a rise in the number of loans, so they’re actually borrowing more, Kelvin.
Kelvin:  Yeah, so I think what that’s saying is that the pool of potential borrowers is finite, so we’re not getting more borrowers into the market, but we are getting is those better borrowers, who have satisfied those criteria and can afford to pay bigger mortgages.
Kelvin:  I think that’s what’s going on. I think it proves just that banks are only lending to those good borrowers. And once you pass those hurdles, you can borrow a bit more.
Kevin:   Yeah, because that risk-adverse attitude from the banks is not such a bad thing is it? I mean it’s going to … It sort of shores the market up a little bit. What’s happening with investors, Kelvin?
Kelvin:  Investors, yeah, investors are pretty flat year on year, so there’s still some attractive deals out there for investors. Again, you’ve got to pass the hurdles, but generally lending volumes to those … to that group, to investors, is reasonably flat year on year, so just ties in with the risk-adverse attitude from banks, that they’d rather lend to an owner/occupier if they can. But there are still deals for investores.
Kevin:   Yup, the first mover, HSBC, was offering two-year fixed loans at sub 4% rates, so that’s very, very attractive.
Kelvin:  Yeah.
Kevin:   Are more people jumping onboard?
Kelvin:  Yeah, well the criteria is still pretty tight. I think to get that deal you had to have been just a customer or least have … or at least to HSBC with some investments as well. So it’s not strictly a pile in scenario. You did have to meet some other criteria, and that’s the same as the other banks too.
Kelvin:  So yeah, the headline rate can be sort of slightly misleading, because you do have to meet some other criteria, but yeah, again, once you meet those it’s a good deal.
Kevin:   Interesting moves in Australia and New Zealand, we’re seeing the resurgence there of first-home buyers, interesting numbers, joining me to talk about that, Core Logic’s New Zealand’s senior property economist, Kelvin Davidson. Kelvin thanks for your time.
Kelvin:  No worries.

Tragedy inspires industry support – Chris Hanley

Kevin:   In the wake of the recent violence in Christchurch, the city and its people have demonstrated Kia Kaha. Which is a traditional Māori affirmation that means, “Stay strong.” This has inspired a Trans-Tasman movement from within the real estate industry to support and nurture the families of the victims, their community, as well as the industry’s Christchurch colleagues in their time of grief.
Kevin:   How do you do that in a practical sense? Well, to answer that, Chris Hanley from First National Byron Bay joins me. Chris, tell me about what you and the others are putting together.
Chris:  We’re putting together a conference, Kevin. And nice to talk to you again.
Kevin:   Yes.
Chris:  We’re putting together a conference on the second of May, in the city of Christchurch, with a focus on raising money through the ticket sales for the victims families, and also donations from other people through the website we’re building right now, so that people can, even if they can’t get to the conference, they can donate.
Chris:  We’re also trying to work, and think we’ll be able to livestream the event to the people who want to donate, and also want to see the speakers and listen to things, will be able to do it. That’s what our focus is.
Kevin:   Yeah, well, the conference is called RISE. The website is http://www.riseconference.com.au. I’ll make sure there’s a link at the bottom of this interview to take you to that as well. Chris, you and your team have been able to put together a very impressive list of people. I notice that it’s actually growing.
Chris:  It is growing. We haven’t finished, Kevin. We’ve got a few more people to add. People have been approaching us who just want to help, basically. Team’s a little bit of a loose description of what we actually are, Kevin, but thank you for calling us a team. There’ll be a number of people who listen to this. We’re just a bunch of people, and it didn’t start with many of us, who thought it was a good idea. And like all good ideas, you put it out there for a while, until someone tells you, A) it’s not a good idea, or B) they got yeah that’s a good idea, I think I’ll join up and help. There’s a bunch of us, and it’s the people from within the industry, the different generations, are also included in this from different offices and brands.
Chris:  It’s a non-branded event. We are trying, and going back to where it all started, I think your introduction was really strong. I was, and the others that are involved, were all deeply impacted and saddened by this. We just thought if there’s any way we can do anything … I think everyone got stunned by this. When you’re feeling that way, I think the next step after that is just to start asking yourself, okay what can I do? And that’s what we’re doing.
Kevin:   Yeah, well there are business leaders, there are people who aren’t even in the industry who’ll be going along to speak. Peter Fitzsimons is one, Megan Jaffe of course from Ray White Remuera. There’s just so many people on this website, very, very impressive people who’ll be both attending, giving their support as well. And I was interested too to see that the institutes, namely the REIQ, are involved as well. I guess the institutes around Australia will be supporting this too.
Chris:  I believe so. This has all happened in seven days Kevin. We’re a little catching up if you like, with good intentions at the moment. But Antonia from the institute in Queensland, who I just had something to do with a couple of weeks ago by speaking in the conference, is an impressive woman, and a very impressive CEO. She’s gonna be part of it. I watched her do a chairing session, up there at that conference, and she was great. The people who are involved in this conference, have actually made it, if that makes sense. Instead of someone putting on a conference, which we do all the time, and you and I’ve been to hundreds of them, and they’re wonderful.
Chris:  In this instance though, the people who are speaking have also made the conference, if that makes sense. So, Phil Harris, who we all know, and Tom Hector for example, are two old friends and were good friends of mine. They just said yes straight away, by text. Text messaging is wonderful when you’re trying to work out whether an idea’s any good, Kevin, because you workshop it. So, on the Saturday straight after Christchurch, I sent a lot of texts out to a lot of people that I know in the industry. The good people I know, and they all came back in a positive way.
Chris:  As you said, there’s a lot of CEOs. What’s happening on this trip, which is I think a little unusual is that we’re going over there. But it now appears that bunches of Australians want to join us. And the CEOs of some of the groups Nick Dowlings, was an enthusiastic supporter from Jellis Craig. And he’s coming, and so are many of the other CEOs and some of their staff now all want to come along.
Chris:  You said also, in the intro it’s … the purpose of this is to support the families of the victims in Christchurch, but also to connect with the people who are involved in the property industry. And my understanding is there’s about 1900 real estate agents in Christchurch. It’s a big real estate town, and I think there’s a feeling both with the speakers and the other people who want to go to the conference, that we want to go over and maybe hang out with the Kiwis for a couple of days and just show our support for what’s happened to their community.
Kevin:   That in itself is going to be a reason why this is going to be a very, very different conference. The fact that it’s not just about going for the conference, it’s all about looking after each other, helping someone get through a really difficult situation. I just think this is fantastic. We are so proud to be supporting you, and I will call it a team. You and everyone else involved in this Chris. Congratulations. As I said, we’ll be there. It’s called Rise 2019. It’s on in Christchurch on May 2. The website is riseconference.com.au. Use the link below this email, and please, please give it your support.
Kevin:   Chris congratulations on what you’re doing and all the best.
Chris:  Fantastic. And just before you go Kevin, I want to tell you how good being involved in this has been for all of us. Dane Atherton, is another Queensland lad that I know, you know well. He’s a very, very good man, and he’s been very, very important in this small group of people organising this. And Dane came up with the idea of RISE and it’s such a great idea. Yeah he did. We’re gonna give him creative credit. I may even gonna be strong and call him our Australian Creative Director, he’ll like that.
Chris:  But more important Kevin, more important, we’re gonna do this again. This is our inaugural event in New Zealand. But the idea is that what we’ll do next year, if it works over there, is we’ll find whether it’s drought, or climate change, or something, we’ll find an issue each year that the industry and the profession wants to support. And then we’ll put another event on in another place, and find the agents who want to contribute, and we’ll go and help whatever community that is that we can do some work in.
Chris:  Thanks for supporting us Kevin. Thanks for talking to us today. I look forward to seeing everyone in Christchurch.

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