Highlights from this week:
- Labor fails its own test on negative gearing
- How young is too young to start retirement planning?
- Rental market signals a recovering WA market
- More proof Labor has it wrong – again!
- Check your attitude at the auction door
Labor fails its own test on negative gearing – Denita Wawn
Kevin: Well, contrary to Labor’s claims, its policies on negative gearing and capital gains tax will not increase the supply of new housing or create new jobs in the building industry, according to new independent economic modelling commissioned by Master Builders of Australia. According to Denita Wawn, CEO for Master Builders Australia, Labor’s policies on negative gearing and CGT fails its own test. Denita joins me. Denita, thank you very much for your time.
Denita: My absolute pleasure.
Kevin: I’m surprised with this pushback from Master Builders because Labour say their policy will increase housing supply, which would be, I would think, a good thing for builders.
Denita: You would think so, and certainly when the policy was first announced, on face value it did look good for our members, and we thought, as a consequence, it was important to test what those results would be if the policy was implemented. And I must say, many of our members were quite shocked when we came back and said that the reverse is in fact the case. This is because of the interaction between the provisions on negative gearing, but how it then impacts with the capital gains tax changes, which ultimately results in the fact that there will be less houses, less employment and less building activity. That is disappointing, and hence the reason why we thought it was important to bring that to the attention of the public.
Kevin: Yeah, certainly very important. I notice that Labour have actually pushed back and said that they are prepared to grandfather the changes for current investors, so that current investors aren’t penalised. Wouldn’t that cushion the impact?
Denita: It may well cushion the impact on existing property investment on existing homes, but that’s not what we were testing. We were testing what it would do to new construction, future building development. It’s very hard to grandfather something that doesn’t exist, and so we wanted to focus on new construction and what that does to employment. Grandfathering would have an impact on price, but that’s not what we were testing. We were testing what it meant to new construction, particularly given that ALP had assured our members that it would result in new construction, and it would result in employment.
Kevin: Well, we’ve got two reports here, and of course your claims of less construction, less jobs, and even a slow down in renovation is quite dire. Could I just ask you, how robust has your modelling been?
Denita: We’re feeling very confident with our modelling. We did use an independent modelling research team that has also been peer reviewed. It was important that they looked at modelling that was undertaken, and they have used similar assumptions of that taken by the government in their Henry Tax Review. We’ve looked at both lower and upper limits, so we’re feeling very comfortable with our results that we have published last week.
Kevin: Well, certainly, polling would indicate that maybe Labour might just win the next federal election. If that’s the case, obviously we’re at great risk of this actually coming into play, and then if your research is correct, it could be a pretty dire outlook for the property market. Have you any plans, does the Master Builders have any plans to be really getting aggressive, in terms of putting a counter … not so much offer, but proposal to Labour, and what do you see as the solution?
Denita: Well, our solution, in terms of housing affordability, is quite simple. It actually focuses on the cost of land, not necessarily the cost of building. We know we simply have not had sufficient supply of land in this country to keep up with demand, which has then driven up prices. So we actually need Labour to really put focus on the state governments, if they were successful in getting into government, to ensure that we have a good steady supply of land, that state governments are not putting unnecessary developer charges in terms of actually building on that land, and also that our planning laws are actually reflective of market needs.
Denita: So the answer lies in land supply and land costs, and this was clearly indicated in the Henry Tax Review. You should not be focused on property taxes in trying to resolve housing affordability. We should be focused on land supply. That is the solution, we say. It is not, therefore, necessary to change property taxation, particularly when we’re experiencing and seeing a downturn in the property market in the year’s close, and we’ve already seen a significant downturn in the property market, in the construction of new dwellings on the west coast. So we say this is a wrong approach to an important issue that we do need to address, but Labour needs to rethink its strategy on this one.
Kevin: Yeah, there have been so many people and organisations like you that have come out and discredited this policy by Labour, but it just seems to me to be almost like low hanging fruit. This is not as deep as it should be, in terms of their thinking.
Denita: Yeah, certainly, in terms of the issue around housing affordability, this policy was introduced two years ago when the market was very different. No one had really tested the Labour market policy and I think we’re now seeing a series of assessment of the Labour market policy in conjunction with the change in the market, and really, the focus really now needs to be to say to Labour, “Can we please rethink it? Can we look at alternative solutions to driving housing affordability?” We know we want to resolve housing affordability, we know we need more social housing, but equally, the strength of the economy in this country is very much on building and construction, and if we actually have adverse policies that affect, by and large, small to medium sized building businesses, then we’ll have adverse consequences throughout the economy. It just needs a rethink and that’s all we’re asking the Labour Party to do.
Kevin: Denita Wawn, thank you very much. Denita is the CEO for Master Builders Australia. We’d like to stay across the top of this. Any further updates you have, we’d love to hear about it, Denita.
Denita: My absolute pleasure, and thank you so much today.
How young is too young to start retirement planning? – Michele Levine
Kevin: Well, the Morrison government announced in September that Australia’s pension age will be set at 67 from July 1, 2023, and not continue increasing to 70 as originally envisaged. The change in policy means that Australians can now plan for maybe a longer retirement and increases the importance of putting time into planning for your retirement, but who do you trust? Who do you talk to? Michele Levine, who is the CEO for Roy Morgan says retirement planning is an important consideration for Australian workers looking to get the most of out of their post-work stage of life. Michele, thank you very much for your time.
Michele: My pleasure.
Kevin: Now, I understand in your release, you’re talking about Gen Z and how they’re most likely to seek advice. Tell me, who are Gen Z? Who falls into that category?
Michele: So Gen Z are the youngsters, so these people were born 1991 to 2005, so they’re sort of the youngest of our young adults.
Kevin: Who are they turning to for advice?
Michele: Well, this is really interesting. The very fact that they’re even thinking about getting advice about retirement planning I think was one of the really interesting things that I found, so we find these people generally are turning to friends and family, and asking for advice about retirement planning, and in fact 30% of them. I have to say that was so surprising. As I think about young people, are they really thinking about planning, and clearly they are. And the group that are most likely to be asked their opinion, what you might call trusted advisors, they’re actually the Baby Boomers, you know, people born 1946 to 1960. Now, that’s not surprising.
Kevin: Well, why is that, because are they seen as the most successful to give that kind of advice? Do you think that they’re perceived as having a really good retirement?
Michele: Well, I think if you ask anyone other than a Baby Boomer, they all think the Baby Boomers have just done it well every step of the way, so there might be a little bit of that in it, but I tend to think that it’s more really about their age, their life stage, and their experience, because basically if we look at who people are most likely to seek advice from, as you get older, as people get older, they’re more likely to be seen to understand financial things, so you ask your parents or you ask people your parents’ age, and the Baby Boomers is where it peaks. And, I guess once you get post-retirement, it’s interesting. You would think that we would ask very old people because they’ve been through it all, they’re retired, they’ve looked back, but it would seem that people think okay, you’ve already retired, things have changed. Whereas the Baby Boomers are right at that stage where they’re most likely to be exploring issues, thinking about taxation, and really checking out what it’s all about, how to get the most out of your retirement, so who better to ask?
Kevin: Yeah. Well, a couple of things sort of make me wonder then because things have changed. I mean, I’m at the stage now … well, I am a Baby Boomer, and I do think we had a good, but I think it’s a bit tougher for kids nowadays, and I’m just wondering the advice that I would give, is it all that relevant for someone who is maybe just still studying, but they’re not looking at retiring for another 40 years.
Michele: Absolutely. Well, I would say stay at home with your mother as long a possible. That would be my advice.
Kevin: That’s good advice, too.
Michele: But you’re absolutely right. Things have changed so much, and we’ve grown up. Baby Boomers have grown up in a period when superannuation was introduced and has become … it was introduced as a requirement, mandatory super, and it’s just grown. So clearly that’s very different than the people that went before us. And then, where the young people fit now. Because is super actually going to continue, is it going to grow, is it going to go lower? What we would probably have been advising, even five years ago, three years ago, would be – stick with property. It was seen as really safe. So, yes, I think it is really hard to give guidance to anyone, and, yet, what our research shows is that it is the Baby Boomers that people tend to turn to for advice.
Kevin: Also interesting, I think, to note that a lot of younger generations are active on social media and we’ve heard that social media is their go-to place for getting information. Is it that they don’t trust social media to give them the right information about finance and retirement?
Michele: Oh, I think that social media is … it’s very interesting when you talk to younger people. Social media is the place where they go, and they really like to know what people are thinking and saying and doing when it comes to gossip, when it comes to friends, when it comes to fashion, and trends and things like that. But they have actually grown up in a time when they’re taught to treat social media with the kind of scepticism that it perhaps deserves.
Michele: So what young people are doing, and I think will increasingly do, is look for the places on the internet as opposed to social media, but they’ll look for the places that they trust their advice. And, I think if you look at the growth of things like Acorns, or any of these other online services: online banking, online engagement with money, where young people can actually start to monitor their savings and their spending, I think you’ll find that there will be a real growth in that area, which will encourage people, young people, to think about money, to think about saving, spending, interest rates, taxation from an early age with little bits of money.
Kevin: Is it an indication, do you think, that Gen Z are probably going to be more disciplined than, say, the Baby Boomers, who, really in a lot of ways, did have it lucky?
Michele: Gee, I don’t know. It’s very hard to look at these things and think that these young people will be more disciplined. Who knows. Let’s say there’s a major catastrophe with the superannuation funds and nobody actually gets their super. The Gen Z’s are likely to go, “Well, why bother?”. I mean, this is the whole thing about so much, so much can change and so much will change. Of course the Gen Z’s and the Millennials, the younger and not quite so young, are actually looking at the rise of people who’ve done really well out of technology companies. And the fact that more and more of them are actually having to work for themselves in kind of different kinds of roles. That changes the nature of the way you that think about saving, spending, preparing for retirement or preparing for maybe not even retirement. Preparing for life in a different work environment. It’s not that they expect perhaps to work until they’re 67 if that remains the age, and then stop working and being retired. They will actually have in their minds the notion that they will be supporting themselves in various different guises over time. There’s a lot of different things happening in people’s lives, in society, and in their minds about the way they think about these things.
Kevin: Wonderful, wonderful insight there, Michele, thank you so much. Michele is from Roy Morgan, the research house. And I really appreciate your time. Thanks, Michele.
Michele: Pleasure, thanks.
Rental market signals a recovering WA market – Shaun Strickland
Kevin: You know, there’s nearly always an upside to any downturn in the market. In Western Australia, there has been increased leasing activity and the slow down in dwelling construction, which has caused a decline in listings for rent. Result of this has been an increase in Perth’s average rental figure. According to Momentum Wealth’s research advisor Shaun Strickland, the improvement in the rental market in Perth could translate into more than a market recovery. He joins me to explain. Shaun, thanks very much for your time.
Shaun: Yeah, thank you Kevin,
Kevin: What do you see
Shaun: Glad to be here.
Kevin: Yeah, what do you see happening in the short term given what you’re seeing there, Shaun?
Shaun: Yep. So we’re seeing quite the correction in rents and vacancy rates at the moment, so the big one probably would be more the vacancy rate, which we’ve seen drop about half a percent in a mere few months. So we are seeing just the general levels of stock constrain quite quickly, and this will play its part in terms of rental price. So what we can see there potentially would be a lift in rental rates in the short term.
Kevin: A lift in rental rates in the short term. What about the long term, what do you see as the long term effect?
Shaun: Yeah, so the long term effect could be quite an interesting one. That’s where we’re talking about the fact that we’ve got perhaps an increase of population on the way, with a shortage of construction. Meaning, we could be in a bit of a sticky situation with rental rates going up quite considerably, and vacancy rates lowering down sort of back to that two, two and a half percent rate that we saw back in 2012, 2013.
Kevin: Yeah well –
Shaun: That’s a –
Kevin: Yeah, well developers are really good at reading the market and reading it ahead of time almost. It’s a bit like-
Kevin: Sometimes build it, they will come. Well, what’s the confidence? Is it returning to the market for developers? Are they willing to build? In other words, what’s the pipeline look like? The building approvals?
Shaun: So, that’s the big one. The building approvals are down quite drastically. So, they’re about 45% down from the page in December 2014. And as we know with dwelling approvals, it takes approximately two to three years for something to get built even after approval. So the fact that dwelling approvals are bottoming out at that 19,000, it’s quite a figure when we know that we’re not going to get much of that stuff coming on for another two to three years. So, I guess in more of the longer term, looking at that, that’s a bit of an issue that we could have this population growth, yet the laggy dwelling approval figures are showing that we won’t have to supply coming on stream to really capture this. And that’s what’s gonna force our rental rates back up.
Kevin: You might have mentioned it already and if you did, I apologise for missing it, but what are the vacancy rights now?
Shaun: Rates are at 3.9% currently, so the 10 year average is about 4.2%. So but now we’ll make the 10 year average. So, we are definitely heading down.
Kevin: The critical time, I’m told anywhere is somewhere between certainly over three percent, but between three and four percent for it to become a pretty hot market. I think the last time we saw a significant downturn, a rental shortage was back in 2012, 2013 when vacancy rates fell below two percent. Do you recall what happened then?
Shaun: Yeah, that was an interesting market that one. When talking to our property managers, they were saying that they would get people offering $50 above asking rent, and it was just real hot competition for properties. Lots of people that were looking for rentals end up having to go to more substitute type suburbs just because they couldn’t get in their first preference.
Kevin: Are you –
Shaun: It is a bit dire straits and people are missing out on being able to live in a suburb that they want to live in.
Shaun: But that’s what happens when you get into a super hot rental market like we had back in 2012 during the resources boom.
Kevin: Is there any evidence of that happening yet, or is it yet to come?
Shaun: We are seeing more people come to home opens from what I’ve been told from our property managers. So we like to keep our ear on the ground here at Momentum Wealth. It’s not just looking at the figures, but also using all of our other avenues as well. And our property managers have been saying that they’ve been seeing more people come in. Previously over the last probably couple of years, we’ve seen people who put in offers under asking, whereas it’s kind of correcting now to being leased quicker. And also, we have more people putting an offer in and actually getting that actual rate that we set it for.
Kevin: Yeah, well it’s certainly a good sign and it’s about time we started to see some positive use coming out of WA. You guys have been suffering in a pretty tough market. So, thank you for that. We’ll keep a close eye on it as well, Shaun. Thank you very much for your time.
Shaun: Thank you very much Kevin.
More proof Labor has it wrong – again! – Peter Koulizos
Kevin: Always, as we approach any election, we start to see politicians coming out and making sweeping statements about changes they can make. It’s in some ways a bit of low hanging fruit. But we have seen some consistency from the labour party, proposing changes to negative gearing and capital gains tax now repeatedly. And it’s very much on the horizon and in the thinking of many investors and a lot of professionals, industry bodies, around Australia.
Kevin: Joining me to talk about this, PIPA, the PIPA chairman of the property investors, investment professionals of Australia, Peter Koulitzos. In a statement they’ve put out saying that new modelling showed labor’s proposed changes to negative gearing and capital gains tax will decimate the property market. He joins me.
Kevin: Peter, it’s a really big statement.
Peter: Well, I’m only going by what happened in the past. You may remember, Kevin, you and I are about similar era. Back in the eighties, Keating and Hawke made changes to property taxation and that only lasted for six months, because it actually decimated the property market. The building industry was up in arms. The property industry was up in arms. And here we have now, thirty years on, what short memories people have. And they want to do something similar.
Peter: Investors are easy punching bags, because they are seen to be the uber rich, but the reality is the vast majority of investors hold the one, maybe two properties, and they’re holding them because they know that superannuation just won’t be enough for their retirement. So even if they have one freehold house at the end, which they can sell or use the rent to help their retirement, I think that’s a fantastic thing. It’s less burden on the social welfare system, they’re not on the pension, and people looking after themselves. I think that’s a great thing to do.
Peter: But what this is going to do is actually deter investors from getting into the property market, but not only is it bad news for the investors but it’s also those people looking to rent, because if there are less people going to invest in property, then there is going to be less properties available to rent. Now unless coinciding with this particular strategy is a social housing strategy, where the government plans to build more houses to put people in, what do they expect? What do they think’s going to happen?
Kevin: You point out in your release that property investors provide housing for 30% of Australians. I actually thought, Peter, that it was higher than that. But even accepting your figure of 30%, that obviously would go into decline, which is really what you’re predicting, and there would be a need for the government to step up and support that more. I mean, there’s every indication that that figure may need to grow as opposed to shrink.
Peter: That’s right, because of a number of different reasons there are more people renting nowadays than are purchasing their own homes, and it’s not like the 1950s and ’60s where the housing commissions and the housing trusts around Australia were building social housing for low income earners. Now whatever they’re building is more like emergency housing, and those people on low incomes have to fend for themselves. There is some support with bond guarantees and the government offering them, state governments, offering them say two weeks’ rent in advance or rental assistance, but in the main the government is getting out of supplying social housing. So if they want to bring in this, which is bound to decrease overall the number of rental properties available, because they’ll be less invested interest in investing in property, they need to boost the number of houses that they build.
Kevin: One of the reasons touted for playing with negative gearing is that it’s going to actually have an effect on housing affordability. For the life of me I can’t see that happening. I can’t see it occurring. And as you pointed out right at the outset, it didn’t happen last time they tried to play around with it. It didn’t take them long to realise that that wasn’t going to happen, Peter.
Peter: Well, that’s right. Six months it took them before they changed it back again. So what I am suggesting, Kevin, is that if the government feels that there needs to be changes to negative gearing, and capital gains tax, that’s okay, but why don’t they get together with industry and professional bodies at a round table to have a discussion on what the government is trying to achieve, and to either eliminate or at least minimise any negative impacts, not just on the property industry or property investors but on the economy. Because this is so… this is so short sighted and in my opinion going for votes. When you do the numbers, there is no doubt that an investor pays far more in income tax when the property is positively geared, and the more so in capital gains tax when they sell the property, than the benefits that they get from being able to deduct their expenses. The government is better off encouraging more people to buy investment property rather than discouraging.
Kevin: Two things here. I’m amazed to hear you say that they should be sitting at a round table and talking to industry professionals about this. I’m staggered that they haven’t, number one, which says to me that their research is pretty shallow. And the other thing is, what does organisations like yours have to do to get this message through?
Peter: I think the good news, Kevin, is PIPA is slowly growing its membership with property professionals. PICA is exponentially increasing their members. So I think when we have the weight of numbers, then they will have to take notice.
Kevin: Why two associations? Why PIPA and PICA? The PIPA by the way is Property Investment Professionals of Australia, and Peter Koulitzos is the chairman of that. Ben Kingsley, he used to be the chairman of PIPA I think from memory, is the chairman of the Property Investors Council of Australia. But why do you need two bodies?
Peter: So one is for the people that work in the industry, like property investment advisors, accountants, builders and so on, and the other one is purely for property investors, those people that actually own investment properties.
Kevin: Yeah, unfortunately as we’ve highlighted even in this interview, a lot of those investors are mom and dad type investors. In fact 70% of them own only one property. I just question whether they have the time to get involved in something like PICA, which is really what you need.
Peter: You do, you do. I would strongly encourage people that are listening into this, Kevin, to go to the PICA website. Register, it only costs $5, because the more members that we have then the more government will take notice of what we have to say.
Kevin: PICA.asn.au and PIPA, very similar. In fact there’s a link on the home page, on Real Estate Talk to take you to PIPA, but it’s PIPA.asn.au, so they’re the two websites to go to. Can I just get one more comment from you before you go? I think you’ve probably already told us, but what do you think they should be doing to help-
Peter: As i said, I think the government needs to get together. Not just with PIPA and PICA, but the other property and industry bodies so as to get their input as to what effects not just this might have, this proposal, but other proposals in relation to property and construction and investment may have in the real world.
Kevin: So what are you doing about that, Peter? Have you invited them to do that? Have you written to them?
Peter: PIPA’s focus has been on trying to bring in regulation into the property investment advice industry. We did team up with other property organisations last year when the labour government first touted this proposal, but as we get closer and closer to the federal election, then PIPA and other property industry bodies will be far more active, so far as this is concerned.
Kevin: Peter, thanks very much for your time.
Peter: My pleasure, thank you Kevin.
Check your attitude at the auction door – Cate Bakos
Kevin: An interesting thought, the other day talking to Cate Bakos, who joins me as my guest. G’day, Cate, how ya doing?
Cate: Hey, Kevin, I’m well. Thanks.
Kevin: I wanted to talk about your concept of intent pressure, and how many people maybe go to an auction not expecting to buy, so therefore they’re not fully prepared. And then they find that in this environment, this market, that it was very achievable for them, and they could have prepared a little bit better. You’re seeing a little bit more of that, are you?
Cate: I definitely am, and it’s really interesting. Now in this changing landscape, people are underestimating their chances, and even if it’s a flat chance, like a 10 percent chance, they’re leaving it to the last minute. And they’re either getting that phone call from the agent saying “we’ve got an acceptable offer,” and it’s, let’s say, $590,000, and the client might have thought that it was a mid-sixes property.
Cate: All of a sudden, they’re scrambling to get their offer in by the deadline, or they’re still there at auction and they see it passing in, or not getting the deeds. And they realise that, had they been prepared, they could have bid with confidence, and that’s when I get very distressed, last minute freak-out calls. And they want to go and step forward with an offer, but under auction conditions, it can be unconditional.
Kevin: Is this happening because the market is actually adjusting, and maybe in some cases buyers are still thinking it’s running a little bit out of control? In other words, their expectation of what it’s going to sell for is actually greater than what it really will?
Cate: It’s an interesting question. The prevalence of it happening is far higher at the moment in this changed environment. But I’ve seen it happen in a hot seller’s market as well, because you can never predict exactly what will happen with a property. And sometimes, the agent can give the impression that it’s going so well, it’s flying. And so buyers are a bit lackadaisical about preparing for it, they just go ahead and watch the auction and plan to watch the property sell, and realise that there were a few details there that were overestimated. Maybe the people that the agent thought they had have gone to something else, or they haven’t gotten their finance in time, or whatever the reason.
Cate: So it does happen in all markets, but we see it a lot more in a buyer’s market.
Kevin: It’s a difficult position for agents, because the thing that they want to portray all the time is success. They want to say, well, this one is going to sell, I’m confident it’s gonna sell. Yet, maybe that’s building an incorrect expectation in the eyes of the buyer, which could effectively make it not sell, because they are almost talking people out of becoming interested in it. Am I making sense here?
Cate: Yeah, you are. It’s such a difficult situation for agents, because on one hand we want them to be honest with us and prepare us for competition, and give us an idea of how competitive the bidding could be. But on the other hand, we don’t like hearing when the property is going really well. Or we don’t like the agents talking down the possibility of the sales results, so when they don’t lean on how many buyers they’ve got on it, or they suggest a price that’s lower as a bit of a guide price.
Cate: And we are pretty tough on the agents. We expect a lot from them, but in this climate, the honest answers are often “who knows what will happen in this market.” And I think finance is the key, and the agents know that buyers can be keen on the property, and they can have the right sort of budget. They just might arrive at auction and haven’t got their finance sorted, and they’re not prepared to bid under the hammer, knowing that it’s an unconditional bid.
Kevin: It’s a very emotional time, both for buyers and sellers, where the buyer doesn’t really wanna miss out. That fear of missing out sometimes makes people pay that little bit extra that they probably shouldn’t. And you must see that quite a lot, Cate.
Cate: We do. We see people pay extra when they’re fearful of missing out. And we also see people scrambling to throw in a bid when they’re ill-prepared. Every now and then I have to say to someone, we can’t bid. If it passes into you, I can try and respectively, negotiate all of the conditions for you so that you have the comfort of a finance clause, but at the end of the day, if they haven’t done all of their due diligence, they don’t wanna wake up the next day and realise they’ve got no cooling off and they’ve made a mistake.
Cate: But the important thing is, if you think there’s a chance of getting a property, even if it’s a small chance, and you’re totally keen on it and you’re planning to attend the auction, it pays to do a little bit of homework, decide what you’re prepared to pay for it, and make sure that you’re satisfied. That the price you’re paying is what it’s worth.
Cate: And also have that contract looked at. You don’t want to throw ten contracts at a solicitor, that will drive them mad. But if you’re really serious about a property, and the agents indicated that they can’t be certain it will go under the hammer, you should be prepared for a pass in.
Kevin: And you should also be prepared for the fact that you’re gonna miss out, because there’s been a lot of people very, very upset with the fact that they have missed out in the market that we’re currently in, and maybe we’re moving through, Cate.
Cate: It’s a little easier for buyers now. You’ve got a better chance of buying once you’ve got your finance sorted and you’re prepared, than what it was a year ago. It was such a tough seller’s market a year ago, and people were getting smashed at auction. So it has come off. The levels of competition are certainly lower, the buyer call is diluted, particularly when it comes to being pre-approved and ready to bid. And we’re seeing a lot of properties sell after auction, or via private sale with a subject to finance call.
Cate: So, buyers should remind themselves of the fact that the conditions have changed. And if they step forward with a reasonable offer that’s subject to finance on a private sale, or if they can talk to the agent long before the auction, they might find that they have a chance to incorporate a finance clause, or at least plan with enough time.
Kevin: I’ve been talking to the buyer’s agent of the year for Your Investment Property, Cate Bakos, from Melbourne. Cate, thanks very much for your time.
Cate: Thanks for having me, Kevin.