{"id":9528,"date":"2016-10-09T01:00:32","date_gmt":"2016-10-08T14:00:32","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=9528"},"modified":"2016-10-09T01:00:32","modified_gmt":"2016-10-08T14:00:32","slug":"property-to-jump-in-value-john-symond","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/property-to-jump-in-value-john-symond\/","title":{"rendered":"Property to jump in value &#8211; John Symond"},"content":{"rendered":"<p>&nbsp;<br \/>\nAussie Home Loans chairman <strong>John Symond<\/strong> has claimed the housing market has the potential for 10-15% growth over the next three years. We talk to John about that and find out what he bases that on.<br \/>\n&nbsp;<\/p>\n<h4><strong>Transcript:<\/strong><\/h4>\n<p><b>Kevin:<\/b> \u00a0Aussie Home Loans chairman John Symond has claimed that the housing market has the potential for 10 to 15% growth over the next few years, and he also dispels the myth about the housing bubble. He joins me.<br \/>\nHi, John. Thanks again for your time.<br \/>\n<b>John:\u00a0 <\/b>Great, Kevin.<br \/>\n<b>Kevin:<\/b> \u00a0No bubble on the horizon, John?<br \/>\n<b>John:\u00a0 <\/b>I don\u2019t see a bubble. That doesn\u2019t mean that you won\u2019t have pockets of areas, Kevin, where you might have a temporary oversupply of apartments, because there are a lot of new developments down the eastern seaboard \u2013 Sydney, Melbourne, Brisbane. But, in terms of a bubble, a bubble means really the whole real estate market collapses, and I\u2019m definitely firmly of the view that that\u2019s just not on the cards.<br \/>\n<b>Kevin:<\/b> \u00a0Yes. You\u2019re on record \u2013 as I said in the opening there \u2013 for saying that the market has potential for growth. What do you base that on, John?<br \/>\n<b>John:\u00a0 <\/b>Population is important. Generally, Sydney and Melbourne are the two cities that values have really spiked, but Kevin, the real reason for that is supply and demand and population growth. It\u2019s the only two cities that you have significant population growth and a shortage of supplies \u2013 Sydney, especially.<br \/>\nSydney falls behind 20,000 to 30,000 homes and apartments each year to meet the population increase, so it gets down to supply and demand. The same thing for Melbourne, to a lesser extent, but still significant for parts of South East Queensland.<br \/>\nWhen you have the lowest interest rates since Captain Cook sailed into Botany Bay and employment is still very solid, housing is going to remain very popular, Kevin.<br \/>\n<b>Kevin:<\/b> \u00a0You mentioned there about oversupply, and I know there\u2019s been a lot of talk about oversupply, particularly in the Brisbane market and inner-city apartments and so on. Are there any other parts of Australia that you\u2019re concerned about in terms of oversupply? How real is it, John?<br \/>\n<b>John:\u00a0 <\/b>The real oversupply is part of Sydney and Melbourne. Now, Melbourne has had a couple of splashes of oversupply over the last five years, around Docklands. That market took a hit temporarily. Some prices came off \u2013 anything from 10% to 20% \u2013 until those apartments were taken up.<br \/>\nWe used to see it in Surfers Paradise. But I think developers more careful, lenders are more careful, but that won\u2019t stop some oversupply in sub-suburbs or part of a city. Sydney is exposed. If we get half of the new supply of apartments in Sydney over the next couple of years, we will definitely have an oversupply of apartments in, again, part of Sydney.<br \/>\nPeople come up to me every day in the street and say, &#8220;What do you think of the real estate market?&#8221; Well, if you take Brisbane, there would be at least six or seven different real estate markets in Brisbane \u2013 first-home buyers, apartments, new housing, holiday housing. Which part of the real estate market are you asking the question about?<br \/>\nBut generally, while these interest rates are going to stay low for a lot longer, Kevin \u2013 longer than what we all thought because globally the world is in a low-interest-rate environment. So as long as employment stays healthy, people are going to be able to meet their repayments.<br \/>\nIn fact, I was reading some data yesterday where the average \u2013 not all; average \u2013 mortgage owner is nearly three years ahead of their mortgage payments. Now, this doesn\u2019t apply to people who\u2019ve just bought a property the last 12 or 18 months. But people who\u2019ve had a property for five years, six, seven years and more, they\u2019re at least three years ahead because they\u2019re being cautious. They\u2019re still making the same monthly repayments when interest rates were 7% versus 4%.<br \/>\n<b>Kevin:<\/b> \u00a0Yes. John, continuing to talk about this potential for an oversupply and how much building is going on \u2013 particularly inner-city apartments \u2013 what impact do you think it\u2019s going to have when the banks renege on some of their loans for people who have committed to an off-the-plan purchase. What is that going to do to that market and to some of the developers in particular?<br \/>\n<b>John:\u00a0 <\/b>Well, the biggest single factor, it\u2019s not people putting up that 10% and regulators changed the rules going back 18 months ago. I think that fear is settled down. I\u2019m confident that banks and other lenders, if someone has got a good job, they put up their 10%, they\u2019re bona fide, I\u2019m confident they will get set. The risk is the end value when the building is completed.<br \/>\nNow, if the market is strong, you haven\u2019t got a problem. If you\u2019re in an area where there\u2019s another 500 apartments trying to be sold nearby, well, that\u2019s going to impact the values. This is why buying off-the-plan is a bit of a gamble, because you\u2019re taking a risk on the end value, which might be two or three years away.<br \/>\nInvestors need them to be rented. Not only is there the potential for the value to soften and be lower than what your contract was agreed on, you\u2019re relying on renting it out. If you have hundreds of apartments being bought by investors wanting to rent them out, well, then you\u2019re going to maybe have a problem finding a tenant.<br \/>\nThis is why I say to people you can make money on buying off the plan, but in a lot of ways it\u2019s like going off to the casino. Because you can\u2019t control what\u2019s going to happen in two or three years\u2019 time. Even if Australia performs well, we are very dependent on the global economy. If there\u2019s a negative event offshore, we\u2019re going to feel the effects.<br \/>\nSo it has a lot more risk to it, but that\u2019s not saying people have made a lot of money buying off the plan, as well. But I\u2019m saying for normal, everyday moms and dads or small investors, buying off the plan has a lot more risk. You need a lot more professional advice, and make sure you know what you\u2019re getting into because it\u2019s risky.<br \/>\n<b>Kevin:<\/b> \u00a0Very good advice. John, I want to thank you for giving us your time, too. Always great talking to you, John Symond. Thank you so much.<br \/>\n<b>John:\u00a0 <\/b>Thank you, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Aussie Home Loans chairman John Symond has claimed the housing market has the potential for 10-15% growth over the next three years. We talk to John about that and find out what he bases that on. &nbsp; Transcript: Kevin: \u00a0Aussie Home Loans chairman John&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":9530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34,10,11,13,36,17,25,27],"tags":[101],"class_list":["post-9528","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-property-investment","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Property to jump in value - John Symond - 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\/property-to-jump-in-value-john-symond\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Property to jump in value - John Symond - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Aussie Home Loans chairman John Symond has claimed the housing market has the potential for 10-15% growth over the next three years. 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