{"id":6212,"date":"2015-11-03T01:00:07","date_gmt":"2015-11-02T14:00:07","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6212"},"modified":"2015-11-03T01:00:07","modified_gmt":"2015-11-02T14:00:07","slug":"learn-the-truth-about-the-australian-property-market","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/learn-the-truth-about-the-australian-property-market\/","title":{"rendered":"Learn the truth about the Australian property market &#8211; Simon Pressley"},"content":{"rendered":"<p>&nbsp;<br \/>\nLast week in the show I carried an interview with\u00a0<a href=\"http:\/\/realestatetalk.com.au\/shocking-predictions-about-the-australian-property-market\/\">Shane Oliver from AMP<\/a>\u00a0with some dire predictions about the Australian property market. Well almost immediately I received a stinging email from\u00a0<strong>Simon Pressley<\/strong>\u00a0at Brisbane based Propertyology and this week we give him the right of reply.<br \/>\n&nbsp;<\/p>\n<h4>Transcript:<\/h4>\n<p><b>Kevin<\/b>:\u00a0 Last week in the show, I carried an interview with Shane Oliver from AMP with some dire predictions about the Australian property market.<br \/>\nAlmost immediately, I received this stinging comment from Simon Pressley in Brisbane-based Propertyology. I quote: \u201cIf there\u2019s one thing which really irks me most about property markets, it\u2019s the long list of headline-chasing commentators who, each time they come to the public with a property opinion piece, do little more than demonstrate their limited knowledge on the complexities of the property markets.\u201d Wow.<br \/>\nHe joins me. Simon Pressley, you\u2019re a bit fired up about this, aren\u2019t you?<br \/>\n<b>Simon<\/b>:\u00a0 I certainly am, Kevin. Look, fired up \u2013 it\u2019s not personal. I\u2019m passionate about property. I\u2019m very confident about property. It\u2019s my business, but I do get fired up when we get broad-brush statements from generalizers about a very specific component of the economy.<br \/>\n<b>Kevin<\/b>:\u00a0 Well, you\u2019re not the only one. In fact, my phone went crazy after we carried that piece and also what followed on with Macquarie Bank and so on.<br \/>\nSimon, do you think the problem is that some commentators, and even investors, look at the property market as they would the share market?<br \/>\n<b>Simon<\/b>:\u00a0 I think that\u2019s probably where it stems from. They\u2019re not necessarily doing that consciously, but share markets behave a lot differently to property markets. A lot of the things that influence share markets also influence property markets, but we don\u2019t see a property value decline by 10% in two hours as a stock in a company could.<br \/>\nI think that too often the generalizers \u2013 and I say this respectfully, economists are generalizers \u2013 are implying that Australia is one big property market. Now, there are 550 independent local government bodies within this country. That\u2019s the equivalent of 550 different stocks on the stock exchange.<br \/>\n<b>Kevin<\/b>:\u00a0 Gee, it makes it very confusing, though, doesn\u2019t it, for investors? How can we really work out what\u2019s happening when we get so much conflicting comment?<br \/>\n<b>Simon<\/b>:\u00a0 For someone who\u2019s reading something, or watching the news, or reading a magazine, first, as an independent consumer, ask yourself what\u2019s the motive and what are the qualifications behind the person who\u2019s releasing this information? Do they have a vested interest?<br \/>\nEconomists don\u2019t have a vested interest, but are they specialists in the topic they\u2019re talking about? If they\u2019re talking about Australia\u2019s broader economy, yes. If they\u2019re talking about a specific segment of the economy, such as the property economy, are they specialists in that? No more than the GP would be a specialist as a heart surgeon. They are different.<br \/>\n<b>Kevin<\/b>:\u00a0 Let\u2019s get down to a few specifics, though, if we could. Is an easing population growth rate a cause for concern?<br \/>\n<b>Simon<\/b>:\u00a0 If it\u2019s a significant decline in population, yes, but that\u2019s not what the latest data has indicated. The latest data shows Australia\u2019s population growth rate of 1.4% over the last 12 months. That is slightly lower than the 1.5% national average over the last ten years, so it\u2019s easing, but it\u2019s nothing dramatic.<br \/>\nIf we had a national property index, one might form the argument, as an economist would, that property values broadly might ease, but Sydney and Melbourne, for example, their population growth rates have increased. When we talk about that on a national level, that doesn\u2019t mean that every town or city has declined.<br \/>\n<b>Kevin<\/b>:\u00a0 Are we at risk of oversupply? That\u2019s been indicated. In other words, supply outstripping demand. Is that a concern?<br \/>\n<b>Simon<\/b>:\u00a0 We\u2019ve been saying for about two years that we are in a construction boom. The mining construction boom, as that eased off, the residential construction boom picked up. Again, there are some cities that will suffer for a couple of years of oversupply and there are others where supply is quite normal.<br \/>\nAustralia\u2019s three biggest cities \u2013 Sydney, Melbourne, and Brisbane \u2013 do have some concerns at different levels about oversupply for the next couple of years, but there are other cities where supply is quite normal.<br \/>\n<b>Kevin<\/b>:\u00a0 Simon, what are the critical factors that we should consider when we\u2019re looking at the market overall? How important are employment and household incomes? Do they really give us a bit of a clue about an area?<br \/>\n<b>Simon<\/b>:\u00a0 As a market analyst, I don\u2019t place a heck of a lot of relevance on household incomes because which household are we talking about out of the 9.6 million households in this country?<br \/>\nEmployment is certainly a significant factor, and there will always be some cities that are creating fantastic levels of jobs and others that are not attracting, depending on the industries that drive each of these individual economies.<br \/>\nBut something that an investor can and should do is understand the different industries that drive each city and what\u2019s the outlook for each of those industries? If you really want to understand property markets, you need to understand local economies.<br \/>\n<b>Kevin<\/b>:\u00a0 The bottom line, though, I guess, is that if you\u2019re going to invest in anything like property, you really have to do your homework, cut your way through all the commentary and really work it out for yourself, Simon. There are no shortcuts, are there?<br \/>\n<b>Simon<\/b>:\u00a0 There are no shortcuts, and it\u2019s important for anyone who is ever looking to invest to recognize that property markets are extremely complex, just as complex as share markets are. A lot of people who invest in property say, \u201cI\u2019m doing this because I don\u2019t understand share markets.\u201d I\u2019d put it to those same people that you actually don\u2019t understand property markets. You might understand your neighborhood, but that\u2019s not understanding the markets.<br \/>\n<b>Kevin<\/b>:\u00a0 Yes, great advice from Propertyology\u2019s Simon Pressley.<br \/>\nSimon, always great talking to you, mate. Thank you. Keep up the passion. I love it. Talk to you again soon.<br \/>\n<b>Simon<\/b>:\u00a0 Thank you, Kevin. Have a great day.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Last week in the show I carried an interview with\u00a0Shane Oliver from AMP\u00a0with some dire predictions about the Australian property market. Well almost immediately I received a stinging email from\u00a0Simon Pressley\u00a0at Brisbane based Propertyology and this week we give him the right of reply&#8230;.<\/p>\n","protected":false},"author":176692471,"featured_media":5481,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,25],"tags":[101],"class_list":["post-6212","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Learn the truth about the Australian property market - Simon Pressley - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/learn-the-truth-about-the-australian-property-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Learn the truth about the Australian property market - Simon Pressley - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Last week in the show I carried an interview with\u00a0Shane Oliver from AMP\u00a0with some dire predictions about the Australian property market. 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