Greed trumps fear + New home starts slow + More bad news for Sydney investors

Highlights from this week:

  • Cautious optimism on commercial front
  • Don’t believe that you can’t overpay in a slow market
  • Sydney house rents decline
  • New house starts increase in only one state
  • “Call me greedy – I don’t care”


Cautious optimism on commercial front – Vanessa Rader

Kevin:   We know about the tight lending restrictions on residential property. What’s happening in the commercial property sphere? Joining me now are Ray White’s head of research, Vanessa Rader, talking about the commercial area. What are you hearing from your agents around Australia, Vanessa?
Vanessa:   Well, it’s far more difficult to obtain funding for commercial assets than it has been in the past. So while there still is money to be lent, there’s probably a … if you look at the loan to value ratio, that’s definitely changed. So, people that’ll be looking to buy small commercial assets probably just don’t have as much availability to finance as they have in the past, which means that each development needs to find a larger deposit, which then makes it a little bit more difficult to go ahead and go through and purchase that property.
Kevin:   Are there any states in Australia that are better than others in terms of their returns and how comfortable the banks are at lending?
Vanessa:   It’s not really about states. It’s probably more looking at regional areas versus metropolitan areas. So, in the past, the banks have been quite happy to lend on assets in regional locations. So not in your major cities and kind of country locations based on a return, whereas now, the banks are taking a step back and really considering those assets that are now those secondary-type locations, and there’s a greater consideration to that. So, it’s not necessarily a state thing. It’s more of regional versus metropolitan.
Kevin:   How’s the market feeling about … you know, we’re headed into a couple of elections, both state elections and a federal election. Does that have much impact on the market in terms of confidence?
Vanessa:   Whenever there’s an election, there’s always some sort of uncertainty that’s surrounding with that. However, I’ve gotta say, this time around, there seems to be … that’s been in play for the last, say, six to eight months. So I think some of that uncertainty has already been factored into the commercial market at the end of last year. So I don’t think there’s gonna be a massive change in the beginning of 2019 in the lead-up to the election. I think that there is this subdued … it’s not really a confidence thing now. I think it’s more of a, just take your time, have a look at the assets that come to you. It’s just more of a slow process, I’d say. People are being more considerate of their options, and so rather than rushing in … We saw last year and even the year before, we saw this kind of fear of missing out, people jumping in and purchasing things, whereas we’ve seen late last year, that really started to slow and I think will be much the same into 2019.
Kevin:   We’ve heard some stories about people wanting to move away from residential, not so much moving away from it, but maybe diversifying their portfolio more. Are there newer entries into the commercial sphere because of that?
Vanessa:   Yeah. I really think that that’s a story that played out 18 months ago. We saw a lot of people, when the residential market … even two years ago … when the residential markets, particularly in New South Wales and Victoria really heated up, that they were looking for alternative investments that had a better return. So we did see a lot of these small investors coming to the commercial markets. And I’m talking about the sub $1.5 million price point was really active, but even the sub $4 million price point. It didn’t really matter what the asset was. We saw a real growth in people interested in things like service stations, childcare centres, as well as small retail, office, and industrial assets. That’s something that played out, like I said, 12, 18 months, even 24 months ago, and we’re starting to see that really subside now because of this financing issue.
Kevin:   Are your agents experiencing any increased activity from institutional buyers, groups getting together, or is it more individually driven?
Vanessa:   There is an awful lot of those small funds, if that what you mean.
Kevin:   Yes.
Vanessa:   A band of small private investors all coming together to provide a little small syndicate. Yeah, again, that’s something that we saw happen last two years. It’s still happening now, to a lesser extent though. But yeah. If it’s difficult to get financing, if you can band together with other people that are high net worth people that have the ability to raise funds, that definitely still is occurring in this market.
Kevin:   Is there a sector of the market that’s accelerating rather rapidly? I remember a few years ago, childcare was really what everyone was looking for.
Vanessa:   Yes.
Kevin:   Is there a category that you think is gonna be popular in 2019?
Vanessa:   I think that probably looking back to the fundamentals. I think the industrial market is still a good market to be into. I agree that … and that probably plays into that comment that I made, the last two years, 18 months, where we saw a lot of people jumping into the market. That’s why we saw assets like the childcare and the service station really grow in popularity. I think that this year, we’re going back to property fundamentals, taking our time with considering our purchases. So, asset classes, like industrial, that have always had a really long-term demand for them, for tenants and for buyers, is probably one to watch this year. Also, with the change in terms of retailing, there’s been a move away from small retail assets, and industrial is obviously really important when it comes to logistics and to the storage of goods. So industrial is probably one that I would probably feel most confident with going into 2019.
Kevin:   Mm-hmm. Thinking more now internationally, there’s a lot of unrest internationally with what’s happening in America, China, and so on. Are we seeing a lot more confidence in Australian commercial real estate on the world sphere?
Vanessa:   I would say so. I think Australia has always been considered as a real safe haven to put your money. So that’s why we’ve seen a lot of foreign buyers come to Australia. That’s been dampened most recently with a lot of that government initiatives in terms of increases in fees and whatnot. But I do think that Australia does operate quite differently to those larger markets around the world. There is always a really good strength in the Australian markets’ large institutional buyers, and we still see large institutions looking to invest in Australia, both domestically and from abroad. So look. I think Australia’s still doing well in terms of the property market going forward, and it will still be a really robust 2019.
Kevin:   Vanessa, thanks very much for your time. Appreciate it.
Vanessa:   Thanks so much.

Don’t believe you can’t overpay in a slow market – Rich Harvey

Kevin:   One of the greatest fears for every home buyer or anyone buying a property is that they’ll pay too much for it. Interesting research out from the Real Estate Buyers Agents Association indicating that it’s just as risky or you’re just at much risk of overpaying for a property in the slow market as the fast one. Joining me to talk about this, the president of REBAA, Rich Harvey. Good day, Rich. How are you doing?
Rich:   Very good, Kevin. Good to be with you again.
Kevin:   Yeah, it’s an interesting thought because I always thought it’s easy to do it in a fast market where you’re in competition and you can actually overpay but you say that it can happen in the slow market, too. What are some of the ways that we can make sure that doesn’t happen?
Rich:   Well I think just firstly, Kevin, the reason that people think they’re getting a bargain is that they’re looking at the prices relative to what was say six or 12 months ago. But, if the market is still continuing to fall, what buyers don’t realise is that there’s some vendors that actually might even be more negotiable than what they think.
Rich:   You often don’t know that you’ve paid a fair price or paid too much until well down the track. Some people don’t really know. It’s not like you’ve got the property price of every house up on a screen like the share market every day. It’s a very different scenario. I think it’s one of those things where you do need to be very cautious about what price you pay. You don’t want to miss out obviously and try to really provide just completely lowball offers to try and pitch something. I think the way to do it is to look at relevant comparable sales and look at the pace of price fall and monitor those border market conditions. Make sure that you go in fully armed with all the facts before you make any offers.
Kevin:   Yeah, I think it’s a key thing is that make sure you go in fully armed with the facts and know the price that you’re willing to pay at that very point in time and not get caught up in the hype.
Rich:   It is about timing. A lot of people say, “Oh, look. I’ll just sit out of the market and wait until property prices crash 40%.” Well I don’t believe they’re going to crash anywhere near 40%. We’ve had a 10% drop in Sydney and about 6% drop in Melbourne. I think we’ve got a little bit more to go, not too much more. But then you look back in hindsight and go, “Oh, why didn’t I buy in 2019? Why didn’t I go for it?” You’re never going to know unless you have a go.
Kevin:   I guess you’ve got to be concerned too that you don’t get consumed with making sure you don’t overpay otherwise you may just never buy anything-
Rich:   Correct.
Kevin:   -if you become too scared.
Rich:   That’s right. Exactly and I think it’s important to think long term, If you’re buying a property for a home or for an investment. And I often think it’s not about so much looking at the short term price more about thinking about the long term gain. If you’re moving into a home you’ve got to consider your needs for the next five to 10 plus years. If you’re raising kids, you’re going to need schools and shops or if you’re getting toward retirement you want something that’s low maintenance. They are the things to look for and likewise if you’re an investor you need those key drivers to make sure there’s going to be strong capital growth for the property that you buy over the long term.
Kevin:   Let’s stick with the scenario of buying in a slow market which in some areas of Australia we have right now. How important is negotiation?
Rich:   Absolutely critical. A lot of people love negotiation. I love it. It’s very important to make sure that you don’t just go in with your best offer and walk away. It’s about looking for opportunities and I think there’ll be some great opportunities out there.
Rich:   It’s also important to realise that if you don’t do negotiating for a living, you’re working against an agent there that’s trained in negotiation. You’ve got to remember that this person you’re speaking to on the other side of the transaction is an expert. Not every person is but not every real estate is the sharpest tool in the shed but there’s plenty of agents out there that they’ve got to do the right thing by their vendor and get the highest price.
Rich:   Negotiation is a science. It’s a game and you’ve to be really well armed and know how the game works to make sure you get the best outcome possible.
Kevin:   Yeah, talking about negotiation because I think it’s a fascinating subject. I mean property markets are different in different parts of Australia. Everything’s different. Every house is different but so to is the motivation of the seller and a lot of that motivation comes down to just how negotiable they are.
Rich:   Correct. That’s right. You don’t know how fast someone needs to get the cash. Some people are sticking to their guns on a price, others need to move next week because if they don’t then some other bridging finance or some other factor is going to kick in which is going to cause them stress.
Rich:   A lot of people just like things to be done. They just have a thing on their list. They go, get the house sold in 2019 and they’re also looking at the next house they’re buying. They’re thinking, “Well I’ll get a discount on that,” so they’re happy to take a lower offer. Sometimes you actually can be surprised at what kind of prices you can accept.
Rich:   I remember coming back to work one year and I’d made an offer on a place in late December and the agent said, “No way Rich they’re going to take that offer.” Come back on the seventh of January and they ring and say, “Yup. Rich, is that offer still on the table?” I say, “Absolutely but I’m not offering anymore.” I say, “Let’s get it done.” Sometimes if you just stick around long enough, it’s a bit like tennis. You just got to be on the court the whole time hitting the ball and you never know which one’s going to land in your lap.
Kevin:   Yeah, too. That’s such a good tip too and I think it combines with something you said earlier about thinking long term. Don’t be caught up in the short term game because if you do there’s every chance you won’t buy anything because you are thinking too short term. I think you’ve got to look at that five to 10 year scale and look at it as a long term game.
Rich:   That’s exactly right. I don’t think [inaudible 00:05:23] people thinking right now in beginning of 2019, “Gosh. If I buy now and I lose say 5% of the value of my million dollar property, wow I’m never going to recover.” Well in 10 years’ time it’s highly likely that property will be 50 to 70 or maybe even 100% more than what you pay for it over a period of time. Losing 5% in the short term is nothing compared to getting in when there’s less competition, when there’s less demand for properties but buying a quality property that’s going to stand the test of time is the key.
Kevin:   Always great talking to you my friend. Rich Harvey. Rick of course is the President of the Real Estate Buyers Agents Association of Australia. Thanks for your time Rich.
Rich:   Great talk. My pleasure, Kevin. It’s always good to talk. See you soon.

Sydney house rents decline – Nicola Powell

Kevin:   A couple of the indicators we always try to look at in the market to determine where it’s going, one is what’s happening with rentals and particularly what’s happening with vacancy rates. We look at median prices as well. But the focus of this talk is going to be on what’s happening with median rental prices and you’ll notice that they’re very different all around Australia, once again highlighting how diverse this market is.
Kevin:   Joining me to talk about this from Domain, they’ve just released their rental report, Nicola Powell. Nicola, thank you very much for your time.
Nicola:   Hello!
Kevin:   This report does actually highlight, doesn’t it, just how patchy the Australian market is. Different in different areas.
Nicola:   Yes, that certainly is the case. We are seeing some different conditions play out in all of our capital city markets. You know, some are going backwards, some are still improving, and Canberra and Hobart certainly are the tightest rental markets out of all of our capital cities.
Kevin:   Yeah, well, in this show of course we’ve just heard that the HIA have said that housing approvals around Australia have actually declined but they’ve improved substantially in Hobart. So we’re going to see more supply coming on there?
Nicola:   I think Hobart certainly is in need of supply. What we’re seeing for both rents and for the sales market is the prices continue to rise. If we focus on the rental market we have seen significant rises, it’s been the strongest performing in terms of the annual growth in house and unit rents over the year. Actually had double digit annual growth for unit rents over the year. I think really it had been tight and challenging conditions for tenants down in Hobart.
Nicola:   One of those answers to that is supply. It’s a simple answer really. But we are seeing a development response. As you mentioned we have seen an increase in construction. But it does take a little while for that development pipeline to come onto the market and alleviate conditions. Also it is dependent upon investor activity and we know that that lending landscape has changed, and we have seen a pullback of investor activity from those highs that we were recording at that national level.
Kevin:   Interesting to look at the difference … The contrast between houses and units. Sydney the only house market to actually decline, all the others showed a slight increase.
Nicola:   That’s correct. So we saw houses in Sydney decline annually for the first time in more than 12 years. For house trends it means that Sydney is now no longer the nation’s most expensive capital city to rent a house. That title is now taken by Canberra. What we’re seeing in Canberra rents are still rising, where Sydney house rents have declined. There is a $20.00 between Sydney and Canberra now. Really the first time we’ve seen Canberra house rents higher than Sydney in roughly 11 years. So certainly some different dynamics in those two capital city markets.
Kevin:   What’s happening in terms of yields? We’ll stay with houses for a moment. Are yields improving?
Nicola:   We have seen yields improve, particularly … We’ve got to remember in Sydney and Melbourne they have been at historic lows. But we have seen those yields improve and it does indicate that what we are seeing are rental prices are holding up relatively firmer compared to the sales market, where we have seen prices decline.
Kevin:   It’s great to see Perth emerging from some pretty tough times; increase in annual rents and also coupled with improving yields. It’s going to be a good option for investors.
Nicola:   Yes. I think Perth could be on the radar of investors. Perth also had a new title this quarter, it is the most affordable city to rent a unit. So it does overtake Adelaide, which previously did have the title. But what we are seeing a little bit of perhaps a glimmer of a turnaround for the rental market in Perth, which is obviously what landlords want to be hearing. We have seen house rents in Perth increase annually for the first time in roughly half a decade and unit rentals have now been stable for seven consecutive quarters.
Nicola:   Both of these scenarios is really a marked improvement following the four years of weakened rental prices that Perth did experience up until the end of 2017. What we’re seeing is a number of dynamics play out. We are seeing a slowing of construction in Perth. A little bit of an increase in demand, we have seen rental supply decline within Perth. So I think perhaps we’re seeing a bit more of a balance within that market, and perhaps particularly when you look at the foreign buy surcharge that has been introduced in WA. What you could see now is those foreign buyers who would have perhaps been purchasing will actually stay in the rental market a little bit longer now because of that increased surcharge. So that could put additional pressure on the rental market.
Kevin:   Just turning our focus to units for a moment, good to see that Brisbane which has been tipped for many, many years as having an oversupply of particularly inner city units, recording the strongest annual increase in almost three years.
Nicola:   Yeah, that’s correct. What we are seeing is a bit of an increase both for houses and for units. I think Brisbane rental market is slowly turning around to favour those landlords. We are seeing the underlying demand start to absorb that supply. You have to remember this is a bit of a change given the prolonged period of stability that we’ve seen in the Brisbane market. I think there’s a number of factors going on here. We have seen certainly a slowing in development construction. But Queensland has the highest internal migration out of all of the states and territories. So I think that increase in population, growing jobs market, improved economy, also great affordability compared to neighbouring states continues to lure residents particularly from Sydney, in terms of those lifestyle aspects and affordability.
Kevin:   Thank you so much for your time. I’ve been talking to Domain’s senior research analyst, Dr. Nicola Powell.
Kevin:   Nicola, thank you very much for your time.
Nicola:   Thank you.

New house starts increase in only one state – Diwa Hopkins

Kevin:   While at a time when governments everywhere are trying to encourage more home building for obvious reasons, it adds a lot to the employment sector within Australia and that adds to our economy.
Kevin:   New home approvals fall to a five year low, which is somewhat of a concern falling by 9.1% in November last year. Diwa Hopkins, HIA economist, joins me to talk about this.
Kevin:   Is this a big concern, Diwa?
Diwa:   Well it is a substantial decline in approvals for just one month, so the numbers of homes that were approved for construction in November last year, they were 9.1% lower than what occurred in the previous month so that’s quite a significant downturn and a sharper drop than what many were expecting and I suppose it highlight the effect that credit squeeze is now having on the residential construction sector. And at this stage, I suppose what we take away from this result is that there are risks that the emerging downturn in residential construction, that this downturn could transpire to be a little stronger and could occur more quickly than what we’re currently expecting.
Kevin:   What area is the decline most obvious in is in multi-unit developments.
Diwa:   Yes, that’s exactly right. In the month of November, approvals for non-detached housing fell by 18%. So this series is typically very volatile just by the very nature of multi-unit developments in that, you know, one project could represent up to sort of 50 homes. That series is prone to volatility but even accounting for this volatility, an 18% fall in the month is very strong. We also saw detached housing approvals fall, but much more modestly by 2.3% in the month of November.
Kevin:   Would I be correct in saying this is obviously a demonstration of the concern from developers that they may be losing confidence in the market, holding on to sites as opposed to developing them?
Diwa:   Yeah, that’s true and I suppose what also developers having to contend with is the tighter credit conditions in that their clients are gonna be struggling to obtain finance, so we’ve got our own research that shows that the time it takes to obtain a loan to build a new home, that time has blown out from about two weeks to now two months. And our builder members are also reporting to us about half of their clients are just not receiving a loan approval at all.
Kevin:   Is there any indication, contracts that have taken out and then for whatever reason, the bank may change the ground rules that they can’t be settled?
Diwa:   Yeah, there are concerns around settlement risks that people who may have bought and put deposits down, they bought off the plan and they’ve put deposits down that they come the actual completion of the building that the new credit environment means that these clients aren’t able to settle on their homes. That is a growing risk, but I think at the moment, developers have planned and accounted for about 1% settlement risk.
Kevin:   New home approvals, as we said at the start, falling by 9.1% in November. That’s nationally. State by state, how did they fail?
Diwa:   The concentration of decline was in New South Wales and Victoria. The upswing in approvals activity was similarly concentrated in these two states with obviously apartment construction being significant and so from those very high levels of activity, we’re starting to see approvals now come back.
Kevin:   Yes, by contrast you look at Victoria falling by 14.6% and you said Wales by 9.3%, which is what you’ve indicated. But Tasmania, once again the stand out. An increase in approvals of 30.6%.
Diwa:   Yeah. That’s right. So Tasmania’s housing market on several indicators have out performed the rest of the country, particularly the eastern seaboard states, mainland states that is, and that demonstrates the underlying strength of the Tasmanian economy, underpinned by a strong tourism sector and finally population growth is much stronger. People are now moving to Tasmania from the mainland rather than in previous years. You know you had this exodus of people moving away from Tasmania on to the mainland states and so all of this has transpired into a very strong housing sector and in fact the industry is trying to keep up with that strong demand for additional housing in state there.
Kevin:   Thanks for your time.
Diwa:   Okay. Pleasure.

“Call me greedy – I don’t care” – Bushy Martin

Kevin:   And with a look at what’s going to happen likely this year, Bushy Martin joins us. Bushy of course, founder, author and chief property strartegist at Know How Property. Good day mate, how are you doing?
Bushy:   Yeah, good Kevin, great to talk to you Kevin mate. How are you?
Kevin:   I thought I had a big title.
Bushy:   I’m just trying to compete with you, mate.
Kevin:   That’s a ripper. That’s a good one. How are you doing, Bushy?
Bushy:   Really good, mate. Really looking forward to 2019 mate, despite the gloom and doom that you read in the papers, I love these times for property market is a great time to be doing stuff.
Kevin:   Yeah, tremendous, mate. It’s good to talk to you about that, because I think there are a lot of people who are picking the paper up and wondering, “What the hell is going on?” In your notes here you’ve mentioned a great quote from Warren Buffet which I think is worth repeating again because it sums up where we’re at.
Bushy:   Yeah, it really does mate. It’s been around for years, but it’s the old story. When people are being greedy, be fearful, and when they’re being fearful, be greedy. We’re definitely in the greedy phase because the mainstream media are trying to scare the hell out of us.
Kevin:   No, we’re in the fear phase you mean, don’t you?
Bushy:   Yeah, sorry mate. We are in the fear phase. You’re absolutely right, thanks for fixing me up on that mate.
Kevin:   That’s all right.
Bushy:   It’s all about fear. That is the time to take advantage, because the average punter is going to sit on their hands and do nothing, or they’ll react to the negative media in the wrong way and make some silly decisions, so it’s an ideal time for someone who is active in the market to be actually taking advantage of that, mate. So, from that perspective, I think 2019 represents some great opportunities because the perception is very different from the reality, which is often the case.
Kevin:   Okay, your tip then on what people should be focused on, mate.
Bushy:   Yeah. Well, I think they’re going to influence the market, mate. If we look globally, I’m looking very closely at what Trump is doing with China, that will certainly have an influence. The likely impact of that will potentially be on the Reserve Bank’s view of interest rates. There’s a number of people out there saying that there’s probably a good chance we might see the Reserve Bank reduce rates, but that will probably just be absorbed by the funding increases from the bank. What that means at the end of the day is probably no change in rates. We know there’s a federal election coming up in May, and again, traditionally people sit on their hands in the run up to federal election because of the uncertainty. Again, another good reason to be doing something in property while people are doing that.
Bushy:   The only, I guess, issue on the horizon there, is if the labour government do get in, then it changes to negative gearing and capital gains tax, which won’t come into effect for a year or two yet if that does happen. So, I think we’re talking about what people need to do. People need to recognise that a vote for labour is going to be a vote to potentially reduce the value of your property by 10%.
Kevin:   Just on that point, mate, and I think we should dwell on this just for a moment because I do think that it’s likely that they may win, so we’ve go to be prepared for that.
Bushy:   Yep.
Kevin:   Given that that’s the case, I think while any changes they may make might take a year or two to come into play, it’s what it’s going to do to consumer confidence I think, because you rightly said that people sit on their hands leading up to a federal election. If labour win, I think we’re going to see even more people sitting on their hands wondering what the hell is going to happen.
Bushy:   Yeah, I totally agree. You and I have lived through Paul Keating’s effort of doing the same thing back in the late eighties, and that was a recession we had to have. Well, Bill Shorten may very well give us a recession we didn’t have to have if he’s short sighted enough to actually implement some of these changes. I guess I’m still hopeful if there’s time that the right people will start to really look at what the impacts of that will be and we’ll move away from that before that becomes reality, mate. But in that context, the other thing we still need to recognise is that while it may have an impact on existing stock, for those like myself who tend to build investment properties, you’ll still be able to get full advantage of depreciation and those aspects for the affordability piece. So, even in that context, it’s not all gloom and doom either, Kevin.
Kevin:   Absolutely not, mate. The Royal Commission banking we will see some impact of that I would imagine.
Bushy:   Yes, it will. We’ve seen most of the changes come through now, mate, and the official investigation wrapped up before Christmas. The final report hits the deck in February. I think the biggest change that most people haven’t got their head around yet is that while initially investors were villainized, the most recent policy changes that the banks have instituted around using actual living expenses. So, previously benchmarks were used based on an average of a couple and their kids, or whatever your profile is. They’re now looking at what is your actual spend over the last six months. So, the take home message here, Kevin, is be very careful about how much you spend in the six months up to doing something in property, because the banks will now use that.
Bushy:   So, if you’ve had a massive Christmas and bought a heap of gifts and gone on a massive holiday, then that’s going to bite into how much the banks will let you borrow when you front up to actually get a loan, mate. So, looking at very carefully your expenditure, chopping credit card limits and really looking hard to see whether you actually need that personal loan or that car loan is going to have a very meaningful impact on your ability to secure the amount of money that you need to do it. So, you’ll still be able to get money, it’s just the amount of money will start to be affected. UBS did a study recently, Kevin, that indicated that buying capacities, as a result of these living expense changes, are going to drop right between 20 and 40%. So, that will have a meaningful impact on how much you can actually secure to buy a property.
Bushy:   The big take home message here is before you even start looking, go and get a pre-approval, whether it’s directly with your bank or a really good broker. Go and get a pre-approval and then you’ll know with confidence how much you can afford to spend on the property you’re about to buy.
Kevin:   Bushy, talking about credit cards just for a moment, I think a point you made there was lowering those limits. I think what a lot of people don’t realise is even though their credit card may be at, say, 5,000, if they’ve got a limit of 10,000, that’s actually what the bank is going to take into account is your limit, because that’s your ability to spend.
Bushy:   Spot on, mate. The assumption is, and I’ve had people who got a credit card that never, ever used it, sat in their wallet and never done anything, but if you give it to the bank, the banks will say, “Right, you’ve got a $10,000 limit, we assume that you can go and max that out tomorrow, so $10,000 is what we used.” Then they buffer that. So, although we’ve just seen the buffers on credit cards increase by a further 25%, mate. Before Christmas you have a three grand credit card, that’s the same as having a $4,000 credit card now. What it does is it reduces how much the banks will actually let you buy to put towards that next property.
Kevin:   There’s so many things to consider, mate. We’re out of time unfortunately. I love talking to you. I’d like to get you back interesting he show again real soon.
Bushy:   Lovely.
Kevin:   Because there are a number of other things I want to talk to you about as well. What it all means, what are the opportunities for buyers and sellers as well. Hey Bushy, great talking to you, mate, and look forward to catching up with you again real soon.
Bushy:   Thanks again Kevin and loving what you’re doing on Property TV mate, it’s awesome.

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