Real estate heavyweight and patriarch of the powerful Ray White group is our feature guest in the show.
Brian White talks about growing up in a family where all the discussion is about real estate and he reflects on his early memories of his grandfather Ray and his dad Allan. He has some good advice about investing in real estate as well.
Kevin: I’m delighted that our featured guest this week is Brian White. Brian is the joint chairman of the Ray White Group – third generation leader of the Ray White Group, in fact.
We’ll talk a little bit about the company history, but firstly, Brian, welcome to the show and thanks for your time.
Brian: Lovely, Kevin. It’s lovely to be back with you.
Kevin: Thank you. Founded in 1902, a great history the company has, Brian. I know there are a lot of tremendous stories of how the family has developed over the years, as well.
Brian: Yes, it is. It’s a source of great pride for us, and the sense of family history permeates so much of what we do. We actually describe ourselves as a family company comprised of family businesses. When you look at the structure of our network, a huge percentage are family businesses, as well. Many of them now are into succeeding generations, and that’s very satisfying.
Kevin: How has that come about, Brian? Has that been by design, or is it just the way it’s developed?
Brian: I think there’s an inclination for most people, when you’ve created a business, to see whether it’s going to suit the new generation. One of the lessons I learned some time ago to the question of why are there so few family businesses succeeding to the third or fourth generation? Why is the percentage of businesses in the fourth generation – which we are now, of course – less than 1%? Why? Because such wonderful things happen if you can make it work.
Most of the comments come back as it’s such a shame that families don’t try a bit harder to resolve particular issues. There are always issues that come up, of course – different ambitions, different skill sets – and the comment being that it’s such a shame that families, in the words of one memorable advisor, don’t try harder.
When the [2:26 inaudible] does happen, the sense that you’re building on something that started a long time ago and that your forebears would be proud to be shown is a fantastic feeling.
Kevin: It must be a great feeling. I know that Paul, your brother, is joint chairman of the group, as well. It must be great pride for you personally to see Sam and Dan, two of your three boys, coming through and also very active in the company.
Brian: Yes, and my third son, Ben, is very much involved in the real estate space. He’s very interested in the whole property management sphere. It’s very good.
Kevin: Let’s go back to your earliest memories when you were growing up with your dad, Alan, and some of your early memories of your grandfather, Ray. What were the conversations like around your kitchen table when you were growing up? Was it all about property?
Brian: Property was a huge part of it. Everyone would talk about their day, what happened, and I can remember my grandfather talking at a very distinct… His speech was quite a drawl. He was describing the sense of joy that he constantly got when he felt that he provided value to someone, when someone had actually been helped or achieved an answer, particularly for someone he was selling on behalf of.
That started this really strong message that we seek to be proud of every transaction. That all came from Ray himself. It’s something that has been talked a lot about, and it’s has continued to this very day.
Kevin: It’s funny; I was talking to someone from your group just the other day, in fact, and I quite often have quipped over the years about Ray being in the business. He was telling me that someone actually came in the other day and asked to speak to Ray. The name is still very much alive, isn’t it?
Brian: Yes, it is. I had someone the other day who said, “By the way, I’m a good friend of Ray.” I think he’s [4:55 inaudible] a bit there.
Kevin: That’s the [5:00 inaudible] use of the name, isn’t it? Brian, I know that you move around the group a lot. How many offices is it now? Is it a thousand?
Brian: Over a thousand, yes.
Kevin: I know you move around the group a lot and you’re always seeking those great stories and getting in touch with people who have had dealings with Ray White. That must bring you a lot of delight. Does it?
Brian: It does. It really does. The whole process of selling property… Obviously, we sell a lot of residential property but our market in the non-residential space probably would surprise a lot of people. It’s such a big issue and to go about it in a way that people would then say, “I feel so much relief,” yes, I think is good or better than I ever dreamed possible. It’s a constant joy, Kevin.
Kevin: You used the word “pride,” and I know there’s a huge amount of pride there, too. I sometimes wonder, as a real estate agent, when I go to a party and people know that you’re in real estate, the first thing they say is “How’s the market?” You must get that, too. The leader of a big group like yours, what questions do they ask you?
Brian: “How’s the market?” is obviously the first one. It’s such a big part of everyone’s wealth structure. You might remember we did play a significant role in the last federal election and the concept of negative gearing. We were really concerned with the impact of that on people’s assets.
The wealth of Australian families is fundamentally built around the family home. In essence, that’s the case. The wonderful history of that wealth being generated to the benefit of people who have then downsize or go through a different process and how critical that has been in giving them a genuine satisfaction right through their lives, it’s so important.
I suppose a better way, Kevin, to say it is the happiness of society is really largely dependent upon the real estate market.
Kevin: Absolutely. Like you, I’ve heard of a lot of people who have done extremely well out of real estate, just buying a property for the family to live in. Over the years, we’ve become very used to that.
For a moment, if we could, let’s talk about investment in real estate, Brian. What typical questions are you asked about “I want to invest in real estate; where should I be buying, or what should I be doing?” What are some of your tips for property investors?
Brian: Are we talking residential or commercial?
Kevin: Yes, purely residential.
Brian: The big thing is… I remember a story very clearly. A friend of mine asked me – and I was really just entering the industry – “There’s an auction coming up, and I want to know what it’s worth. Would you find out what it’s worth so that I know and I’m not going to bid more than I should?”
I did all of the research and so forth, and I was happy with the recommendation I gave to my friend. We went to the auctioneers and he missed out; someone paid more. It was a house that he wanted; it was perfect for his family and he never, ever found another home that fitted him the way this home did, and it caused a lot of unhappiness.
I’ve changed my recommendation as time has gone on. If there’s a house that you want, then make sure you get it. You might pay too much, but the proof of time passing and what that does in terms of value and just the enjoyment. Homes create families.
There’s a certain type of home in particular locations that are close to either friendship structures or a particular school. There’s a whole range of bearings that come into mind. I’ve increasingly said to some of you, “If that house is for you, make sure you get it.”
Kevin: Sorry to interrupt you. This is one of the dilemmas in real estate. A valuer can put a value on a property done analytically, and they’re probably quite right, but a property really is worth what someone is prepared to pay for it. Someone who really wants it for their family and they’re prepared to pay a little bit more for it, really means that’s what it’s worth, isn’t it?
Brian: That’s the beautiful thing about our industry. People often try to say “We can decide what property is worth. You don’t need a real estate agent, that that’s now all technically done.” That’s just so far off the mark. Finding the person who really wants that particular home – for all sorts of different reasons – is the art form that our industry excels in.
Kevin: Move forward one generation now, and you’re sitting around the table with the kids. They’re young; they’re going through school. What’s your conversation about property? What do you say to them? What are their experiences?
Brian: My children, as they were going through their teenage years, they were obviously fully aware of what I did. They used to come to auctions when I would do an auction on Sunday morning. Nothing like taking my kids along and having them at that, sometimes trying to quiet them down, or there might even be a squabble and then “My God, how do I to stop an auction and look after some children?” Those are a couple of old memories.
I think young people are growing up, aren’t they? The thought of having a home and leaving home is all pretty early on. I think, certainly in my case, the assumption that you would one day buy a home and live in your own home, that was just taken as a given.
Kevin: That’s right. It was taken as a given; you’re right. I remember a story that you told me once. I think you had Sam on your shoulders when you were calling an auction. I don’t know if you remember that.
I remember you telling me about the dilemma of explaining to him because he didn’t see anyone bid and maybe you took a bid off a tree or something. I don’t know. Those were the days when we were able to do that sort of thing. Not speaking too much out of turn here, but explaining that concept to your son must have been an interesting experience.
Brian: It wasn’t just myself. The children were close to their grandfather, and he was the best auctioneer I had ever come across.
Kevin: This was Alan?
Brian: Yes. I guess all of these experiences seep in, don’t they? I know that in those times, at any road, children thought that you don’t need to buy a house. When I was growing up, there was this thing of saying, “You’re better not buying a house because you’re better putting money in the stock market and renting. Renting is much better, really, than buying a house.” That’s found to be terrible advice.
How many homes do you live in? All of us have moved through from the opening home to further homes. I think it’s often not appreciated just how many homes most people do own – or the average person does own – during their lifetime. It’s four or five.
Kevin: It’s actually more than that. I do know the stats, and in our case, Caroline and I, we’ve been through something like 24 homes. I remember talking to I think it was Bernard Salt or Mark McCrindle, one of those. We were talking about how many homes go through on average and it’s something like 15 or 16 in their lifetime.
Brian: That’s including the parents, where they lived as children? I see. If you count that home, as well.
Kevin: I think Caroline and I have actually purchased about 24 on our own. We don’t own them anymore, of course. I wish we did.
Kevin: Brian, success: what does that mean to you? Define that for me.
Brian: Success is living to your hopes and expectations. I think you quite quickly realize that success in strictly monetary terms doesn’t bring a lot of satisfaction. I’m at an age now where a lot of my friends are now retired and there’s not one of them I would want to swap places with in the sense of just being continually active, feeling you have a role, feeling you can make a contribution. That’s success to me.
Kevin: Great talking to you, Brian. I appreciate you giving us so much of your valuable time. Thank you. It’s a delight to talk to you.
Brian: Thanks, Kevin. Beautiful.