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The Property Couch Blog post by The Property Couch

Coronavirus & Property Outlook – Ep. 276 of The Property Couch Podcast

This podcast was recorded at 10am on Thursday, 19th March 2020.
You can listen to it on iTunes, Spotify or Google Podcast.

Welcome to The Property Couch where each week you get to listen to two of us strangely is leading experts, Bryce Holdaway, co-host of Location, Location, Location Australia on Foxtel’s lifestyle channel, co-host of Escape from the City on the ABC and partner of Empower Wealth Advisory. Ben Kingsley, Chair of Property Investors Council of Australia and the founder of Empower Wealth Advisory named the 2018 and 2019 Property Advisory Firm of the Year. Stay tuned as they bring you the Insider’s Guide to Property, Finance and Money Management.

Bryce:   Alright folks! Welcome to The Property Couch. Ben, welcome to you. Interesting times.

Ben:       Hello Bryce. How are you?

Bryce:   Yes, I am well. Are you auditioning for the late night radio?

Ben:       No, I’m just expressing calm, calm, calm. In this moment of uncertainty and high anxiety. I’m just going to be calm because I’m also ready to act. I’m organized, I’m planned and I’m ready to act.

Bryce:   Okay. I like it. Well, we’re going to unpack that a little bit further as we go through…

Ben:       And one other thing while I’m calm. The footy’s back.

Bryce:   It is. Tonight Ben.

Ben:       Tonight, we have normality. We go on with our lives. Go the Pies.

Bryce:   Wouldn’t that be interesting? Take away Freemantle’s advantage, why don’t you? We rely on a home ground advantage with our supporters. Giving it up to you. Black and white army.

Ben:       So yes, I’m calm because I’m informed Bryce. And guess what today’s about informing.

Bryce:   I’m not sure your voice is scaring me because…

Ben:       It’s not meant to be, but I just wanted to get the message across. Okay. I’ll fire up later. You can’t keep it. You can’t get my energy down.

Bryce:   Clearly there’s a, there’s a social element of people feeling anxiety and panic. We get that. But today we want to talk about the bigger picture. We did that a couple of weeks ago back in Episode 274. We did the Coronavirus Special, Keep Calm and Carry On. Today we want to do an updated response to that cause a fair bit has happened and with this pandemic, it really does happen hour by hour. But we will go into that folks and we’re looking forward to chatting to you, but mindset minute today is a revisit of one that I’ve done previously but I think it’s really important. The message is really important to understand what happens when this contagion.

So, it was the man who sold very good hotdogs.

There was once a man who lived by the side of the road and sold hot dogs. He was hard of hearing so he had no radio – he had trouble with his eyes, so he read no newspapers and of course he didn’t look at television. But he sold very good hot dogs. He put up signs on the highway telling everyone how good they were, he stood on the side of the road and cried out to all that past ‘buy a hot dog, they are the best in town’. And people bought his hot dogs and he increased his meat and bun orders. He bought a bigger stove to take care of all the extra business. He finally got his son to come and help him out with his business. But then something happened, his son who had been well educated said . . . ‘ Father, haven’t you been listening to the radio or reading the newspapers or watching television? There’s a big recession happening right now. The current business situation is terrible in this country – we have problems with unemployment, high living costs, strikes, pollution, the influence of minorities and majorities, the rich, the poor, drugs, alcohol, capitalism and communism ‘. Where upon his father thought, ‘ well my son’s been well educated, he reads the papers, listens to the radio and watches television, so he ought to know ‘. So his father cut down on his meat and bun orders, took down all his advertising signs and no longer bothered to stand by the side of the road to promote and sell his hot dogs, . . . . and his hot dog sales fell almost overnight. ‘You’re right, son’ the father said ‘we certainly are in the middle of a recession’. One of our listeners send that in. Thank you for that Frank, for sending that through. I guess I thought that was important to understand that that there is a contagion. There is very real affects to a portion of our economy. Casual workers, people in entertainment, tourism, there are people who are deeply affected. So I am by no means belittling what is happening.

Ben:       We need to acknowledge those people who are finding it tough. And, and they can’t necessarily see light at the moment.

Bryce:   And that does cause a little bit of anxiety. So make no mistake, we get that right. But what I also want to talk about is a social contagion, Ben, because we are experiencing, a pandemic in the world of social media. Of all the strengths of social media, perhaps some of the negativity is the social contagion that comes.

Cause if I’m feeling anxiety, Ben, it’s very easy for me to pass that anxiety on to you. Not only in face to face contact at one and a half meters distance, but also via social media, right? And that creates a loop.

So if I’m fearful, I can pass the fearful on to you. So what that does is it creates that social contagion. And then what happens if you add social contagion plus anxiety? It leads to panic.

So i.e.., the toilet paper. I remember when Princess Diana passed away. And I also remember when you told me that your wife rang and said, “Ben, there’s no toilet paper in Coles or Woolies in Kensington.” And I just remember looking at you going, “What?” And so I just thought it was specific to Kensington. And then all of a sudden we had this social contagion.

Why toilet paper? Can anyone explain… Tissues? Maybe. Understood, but why toilet paper? Largely because we have a social contagion. Is it just reduced to Australia? No. It’s happening all the world!

Ben:       There’s story last night in America. People are clearing shelves in US supermarkets.

Bryce:   So not only is the traditional news feed, but our newsfeed in our social media is well and truly fuelling the anxiety. I get that right. What I want to say to folks is I thought this is important that we find a way to navigate through the uncertainty that is the coronavirus because I think a lot of people are feeling this joint energy that comes around feeling uncertain, right? So I went and researched. I listened to a guy by the name of Dr Judson Brewer. He said, the only way out is through and we’ll talk about this later, but we’re seeing that China is actually coming through this. So that’s good to know that there is actually a model that we actually will get out of it. But he said there is three steps that you need to take.

Number one is you need to map out the habit loop and create an awareness around what that habit loop is.

So I just notice, “Oh, I’m worrying.” Okay. So that’s step number one. I’m worrying. He was talking about the cubing, the fear, the behaviour equals the worry.

And unfortunately, the worry gives us something to do. If in the absence of real clarity and certainty on how to get through this, the worrying just gives us something to do.

And then what that response is that anxiety. So we need to actually just map that out and just go, alright, I’m worried. Create some awareness around it cause if I have some awareness. I can do something about it.

Number two is we want to then determine the rewards hierarchy.

So what am I actually getting out of being worried? How does it actually serve? But he used the example of someone who is a smoker. The addiction is very real. It’s very difficult for smokers to stop the addiction. But once they actually become aware, when they take the drug that it actually doesn’t taste very nice. And then when they think that through, they have more success on actually breaking the addiction because clearly there was something that triggered it. But once we identify what that is, they can break it.

So, number one, map out that habit loop.

Two, determine what the reward hierarchy is to see, “Am I actually getting anything out of this?”

Then three is to get a better offer.

So his suggestion and I thought was brilliant is find anything else that feels better. So in these times, calm and connection. Being calm and connected. We want to spread the calm and connection as the alternative contagion, right?

So don’t spread the panic and anxiety, spread the calm and connection on.

We’ll talk a little bit about connection a bit later on, Ben. But hopefully, that gives people a little framework. Sure, we understand why you’d be feeling anxious, but that can give you a sense of are we going to get through this? And this is how we get through it.

Ben:       And Bryce if I can share it with the listeners about what we refer to, and this is a summarized version of it, but this is what we call the media cycle. Okay? So this is how newspapers and media make their money. Now make no mistake. Media have a job to do. To tell a story and to keep us informed. But that job has changed significantly as they compete for what we call the eyeball economy, which is where the dollars and the revenues are at to keep them afloat. So what they do is they use the first part of the cycle is scare them. Then the next part of the cycle in terms of their messaging is blame someone or something. Make it someone else’s responsibility i.e… government whatever it is, just basically blame other. Then now what we’re in is the talk-fest. And the talk-fest is really about the social proofing and the validation of, “You’re right!” and the commentators are, “They are to blame!” And then, you know, everyone’s sort of get into it, and then it brings a bit of social unrest and that anxiety that you just talked about.

So, we’re not at the final stage yet, but the final stage is the turnaround. I call it the turnaround. And this is where you tell the positive news stories. But right now they’re milking it for absolutely everything that they can get and images of people fighting in supermarkets is completely…

Bryce:   Social contagion at its worst.

Ben:  Yes, and on two levels. Two levels. It is so isolated that it does not represent the broader community. And this is why I’m very calm at the moment because when I turned to the data, when I turned to the facts. I just wash out all that noise and it just does affect me anymore. It’s hard.

Every now and then I have a little moment just like everyone else. “Well that was a lot to take in. Now I’m rethinking my point.” But I get grounded back in to the facts and so I am saying to the media elites who display those images because you know I can sit there and I can be the CEO of Woolworths and say, “We are supplying. There is absolutely no supply chain issues with food. Everything’s going to be all right.” Or you know, and good news story about a customer who gave someone who really needed it because they do. They are verbalized but not shown as is. But then a three second image of people pulling each other’s hair and that changes all of us.

And so I think there is a responsibility for those in the media and also people who are sharing post on social media, because that is not a representative of the broader Australians. It’s a classic case of the minimum sample size affecting the broader market size.

And I’ve talked about that before in terms of educating the lowest common denominator. It doesn’t work.

You’ve got to educate up and you’ve got to drag up those lowest common denominators. You can’t regulate to that level because it doesn’t serve anyone over the longer term.

And so, this media cycle is important because if you understand that, and connecting to what you just said… If you replay what Bryce just said, it is fundamentally empowering in terms of getting to a calm state and then moving with people who have that same positive outset story. State and strategy. Jaemin talks about story, state and strategy. If you can get that story right for yourself, you will not only be empowered in your financial journey but you’ll be empowered in your life. You just won’t attract to negativity.

You’ll attract positivity because one thing is absolutely true in this world, nothing is ever bad as it seems and nothing is ever as good at it seems.

Bryce:   Hence the term, this too shall pass.

Ben:       And I don’t want it to detract from those people who are doing it tough and the people who may be challenged in their financial situation. We’re going to talk to them in today’s podcast. I love how you’ve set up because it’s really important that we just get that message out there of calm and then potentially how we act and what we do. We plan, we inform ourselves. And then once we’ve got that information, we then act on that information.

Bryce:   I agree. The prime minister went to lengths yesterday in his press release was decided that be very clear on who you get your advice from and go to the government health websites and the state health websites. That’s where you can get it because there was a text message that was flying around that seem really credible about how we going into imminent lockdown. And he just said that was rubbish. But if you read that text message and then you send that through, that’s where the social contagion starts to get an exponential curve.

Ben:       These rumour mills, these fake news stories, these blame games they use, conspiracy theories in terms of where it started and who started it. Absolute rubbish and completely irrelevant to you in your own personal circumstances.

You just absolutely need to be aware of… “What am I in control of and what am I not in control of.”

So if you have a plan around how you’re going to… I might get infected, you might get infected Bryce. What are we doing with our family? That’s the case. What’s our financial situation, you get all those things lined up, all of a sudden you’ve made the invisible visible. And you get a sense of calm about your story.

Bryce:       Very good. So folks, what we want to do today is we obviously want to address what’s happening in our economy. How it looks like for property. What it looks like for folks who are impacted by an economic event such as this. We’re going to go through that methodically. But what we want to do is we want to remind… I want to tell a story, Ben.

Back in the early 2000s, I read a book called the Big Shift. The Big Shift was written by Bernard Salt. I thought it was a life changing opportunity for me to understand what he called, an “Empty Island Syndrome“. I’ve talked about this before, Ben, and the fact that our lifestyles are great, we’re politically stable, we’re financially stable and we’ve since gone through a number of events that have proved that.

And he said that the Big Shift is coming. He was talking about the baby boomers being like a basketball moving through a garden hose. And he also talked about the 19th century in Australia being a Bush culture, the 20th century being a city culture and the 21st century being a lifestyle culture and all those things have come to pass.

And I went to a presentation that he did about three years ago, Ben. And that left me with enormous, overwhelming confidence in this country and real estate, given the fact that lots of people want to sign up and they want to opt in to our lifestyle. And they want to come here in droves to do that. We had the pleasure of seeing him speaking last week. And I must admit, not only was I re-energized from the previous message three years prior, but I just became overwhelmingly exponentially confident in the bigger picture of this country. He talked about the fact that we in Australia have this superpower compared to a lot of other nations around the world. And he said it was the fact that we have so many people, wanting to migrate to this country, at a rate that is well in excess of the amount of housing stock that we currently have to house them. So, to quote him, he said,

“…the 20s will likely prove to be the golden decade of home ownership and unprecedented from anywhere before because we’re getting 220,000 migrants per year.”

Bernard Salt

That doesn’t include the natural population growth rate, but just the migration. Now to give you a benchmark of that, at the same period of time, France, which is about 60 million people, is getting 60,000. So almost a quarter of what we’ve got. So the fact that Australia has this secret weapon with the extraordinary rider population growth each year on the pins us and gives you should give everyone an enormous confidence that that asset class has a wonderful, wonderful outlook, right?

And then if you overlay that with the fact that we are the 14th largest economy in the world, and here’s the little footnote with only 25 million people, but because all of the 13 above us, China over a billion, US over a billion, the UK had 60 million France at 60 million. They’ve got significantly more than us. So, we punch above our weight division. So, I think it’s important to bring everyone back up to 30,000 feet and say the future looks amazing in this country for real estate. Now clearly we’ve got to talk about a small moment in time that we’re dealing with. But I thought that that was a good way to really sort of frame up what we’re going to talk about for the next 30 minutes or so.

Ben:       So, while we’re in the medium to longer term. Let’s delve into that. What we’re talking about there is our population growth is estimated to be around 370,000 people, through that immigration and natural rate that Bryce was just mentioning. Now to put that into context from a supply side, we’re coming off the back of what was a very big property boom through 2015 to 2017. We’re producing over 200,000 new dwellings. Well, construction has seen slowed, so we’re going to have a supply shortage of construction. Cause at the moment it’s at its lowest level in the last 10 years. Now we need around 180,000 new dwellings each year to make current demand.

At the moment, we’re only forecasting to deliver around 145,000 of those. And this is not new. We’re gathering up the shortfall again where we’re going to have a shortfall of 35,000 properties. Think about that in real terms. All of the people and the construction industry. Even if we’re building 145,000 properties, you have a look at the greenfield areas and you’re saying 60 houses have been built at any one time. We’ll just multiply that across the country to 145,000 properties.

That’s a lot of jobs. That’s a lots of opportunity but still not enough to meet that supply side.

So I think it’s really important that this underpinning of supply. And I think the other thing that was really interesting in terms of what Bernard Salt said, these people have chosen to leave their countries for a better life here. This is a key point. This is a really key point in the sense, and they’re not coming here to show that they’re tied up in some shoebox and struggling. They want to show to their family and loved ones that, “I made the right decision. I’ve made the right decision. I’ve come to Australia and I’m going to have the Australian experience that I have in my mind,” which is the white picket fence, the lovely home, the nice car. I’m going to work hard. I do know what hard work looks like.

Bryce:   Yes, their work ethics will not be questioned.

Ben:       Exactly the same as our $10 Poms and also our Europeans that came in the fifties and sixties. They were hard workers. They came from nothing and they’ve built up the prosperity of this country to the level that it is today to be ranked 14th even though our population is significantly lower. So I think if you understand that desire that underpins demand yet, we also know that we’ve got this supply challenge that will continue on and that’s what’s going to be the case.

Bryce:   You think about the students as well. There’s a lot of students coming in. I understand in the current environment that’s been affected, but the bigger picture of the 20s where we’re currently chatting, is the students will come here and a lot of them will actually stay and then will get a job here in the knowledge economy and then they will want to buy a house and that will add further demand.

And the fact that they didn’t spend the first 18 years of their life here means that they are going to be net positive contributors cause they’re going to be paying more tax than the services they had in the part of their life.

Ben:       So, the economic shock, which is exactly what is it, has been caused through what we refer to as a mobility challenge. We just simply can’t go about our general day to day. We can’t do our business, we can’t travel, we can’t holiday, we can’t do all of those things. So it is a material shock for a portion of Australians. And their job challenges are real and their income challenges are real. And so what we do need to do, and I’ve said this many times before, is that… It’ll be as worse a correction as we make it or it’ll be as good as a correction as we make it.

We as a group of collective groups of people are ultimately in control.

You saw when we were talking a couple of weeks ago, I said if you’re going to go out and buy that mattress, go and buy that mattress. But if you stopped buying that mattress then ultimately you are adding to that. So if we talk ourselves down and continue with these anxiety and negativity, then we will make out this vision.

That talk-fest, our reality for ourselves, we don’t need to do that. We don’t need to do that because it is a supply side story. When I talk about the media cycle, once mobility comes back in and that’s going to come through. Probably not a vaccine. Everyone’s looking over the hill for this vaccine, which is too far away, but there is some really, really positive new stories and we’re seeing some metadata coming up tomorrow around treatments.

So there has never ever in this world been a more coordinated global response of medical and science. And the rush and the 24-7 program they’re working on to potentially get us to a situation where we have a treatment program because the current treatment program as we know is basically ventilation. It’s care and upkeep, but just ventilation. What we’re talking about here is they’ve identified55 potential drugs that they believe will have on some positive effect and these are drugs that are already potentially been proven on humans.

Now they are not going to rush this through, but some of the signs on some of these things. So it’s a bit like HIV and the AIDS virus and those types of things. They still don’t have a cure for AIDS but they have treatment programs where people don’t die anymore. They live long fulfilling lives. So I think about it in two phases. Treatment will come. And when treatment comes and, if they get the mortality rate down to a flu level, the world will opens back up again and we just catch up on ourselves. And that’s why it’s very much a short term impact. Not anything further than that.

Bryce:   Yeah, there are some people who are the marginalized few who aren’t part of the sort of 95% that’ll get through. So we’re obviously concerned for them. And clearly some stuff for the economy as well, which we will go into a bit. I just wanted to sort of talk about a couple of things.

Why I’m confident in the property market in the 20s, we’ve talked about the population growth stories. You talked about the lack of housing supply. We’ve got low interest rates, likely to head lower and not likely to increase for some time.

So you’ve got a scenario where the yield is actually matching or better than the price that you’re paying for finance, which is…

Ben:       I think you need to really delay with this point Bryce. So just to get this right, the holding costs of interest rates, we will most likely see a rate cut today. We are recording this in the morning. It’ll be out in the afternoon, but our cash rate will get down to 0.25%. So I’ll just give you context. Buy-in rates for Principal & Interest (P&I) will be around three to 3.5%. Interest only rates will be around 3.5 to 4%. What’s the current yield you can get on mass properties across Australia at the moment?

Bryce:   Probably about that. Little less in the big cities and a little more in some of the minors. Yep.

Ben:       We have never, and I repeat, never ever seen a situation where our interest rate is aligned to the yield that we’re getting on a property. It’s uncharted territory. And what does that correlate to? Well, it just means holding costs are a lot lower. So it means that potentially it is a demand trigger potentially for the property market.

Bryce:   Yeah. Clearly we’ve got that scenario with the rates. Owner-Occupied demand remains strong. We talked about the aspirational nature of the migrants coming here. The Australian still have a very strong culture around, I want to live in my own castle. And what that looks like is changing is being from a quarter acre block to some people being happy in high density, but they still want to have that, that sense of high ownership.

There’s also a trend towards less people per dwelling. So you think about some of our team, even within our own group here, some of them live on their own. Some of them live as a two, you and I live as a four, but the trend is certainly towards less people per dwelling, which increase increases the demand. And the last one for me at a headline level is the rentvestor movement i.e. the rentvesting degeneration. So you’ve got people who still have that aspiration to live in their own house but you’ve also got a certain portion who wants lifestyle. Who are happy to rent at some point, maybe get an investment property or there’s just an increasing demand from tenants as well.

So to me, they provide a very, very strong underpinning for residential real estate in Australia across the country in the 20s.

Ben:       Brilliant stuff. But Bryce, I’m hearing you, but I’m still not dealing with the here and now. I get all of that but I’m so worried about the here and now and this is the time where we need to remind calm. So yes, let’s acknowledge a couple of things. It is likely there will be job losses. There’s likely that some businesses who were, you know, bobbing along the bottom in turn may not be able to get through this period. And that’s true. However, it is very clear that the governments and the banks will ensure that this short term disruption, that they will do everything within their power and I repeat, everything within their power to ensure that people retain their properties. You’re already hearing the CEOs of the bank saying, “We do not want to do mortgage foreclosures.”

Bryce:   In fact, the ANZ CEO came on the radio and said, “We understand that this is a temporary challenge. Not like it’s a recession or a GFC. It’s a temporary challenge. So, we will work where best we can with customers who have good credit and have demonstrated over long periods that their business is sustainable. We’re going to work with them to help them trade through it.”

Ben:       The UK last night, released their stimulus package, second stage of it. And the governor said, “Whatever it takes. I made it very clear, whatever it takes to keep businesses employing people and also to make sure that people keep their homes.” Because they do know, everyone understands that from an economic standpoint that property underpins the economy.

Bryce:   Particularly at the ballot box Ben.

Ben:       Correct. So they know as custodians, the government and all the economic custodians in residential really understand that it’s too important that the overall economic health of any country, not just Australia, and they won’t let it fail. So they will not let the residential market fail.

So, people are sort of saying, “Oh, but there’ll be a mass number of people and there’ll be all of these mortgagee sales.” No, they won’t. Because the government will make sure that there’ll be interest rate holiday and they will do everything in the short period of time to get people through it. Because they just know that it’s not a demand led correction. When you get a demand led correction, you just let it play out. And then you try and stimulate things.

This is just a supply shock because mobility has stopped.

So I think from that point of view, if we just know that they’re not going to let it fail, and they could also. And also for tenants. Depending on how bad it gets, there might be a tenancy package that they can also release where they give them a one off amount, which basically means that they can pay their rent for that short period that they might be out of work. All the economic shock they’re experiencing. As we get through those, we then start coming into the buyer and seller activity for today because we’re trying to address these people’s worries now. Not into the long-term.

So, we all know it’s a good move long-term. But why should I stay committed now?

Bryce:   Yeah. Well the volatility in the share market is making property even more of a safe haven. But people, we’ve said this so many times and that it’s an essential need right? So people will eat honky nuts and tomato sauce before they’ll give up the house. They will fight tooth and nail for it. That essential need is really what takes away the volatility and it takes away the fact that it’s not just a financial instrument. It serves its purpose as an investment instrument, but it serves its majority purpose as a roof over our heads.

Ben:       I think we need to articulate that. Well I’m going to have a go at in anyway. In the stock market, I own a very slitter of a company, a big multinational with billions and billions. Now the ledger is obviously on the seller and the buyer side. If there’s no buyers around at all, none. What do you think I do as a seller? I panic and I go, “There is no one willing to buy that.” All of a sudden I only need one other person or one other seller to go. I’ll set the scenario up. $15 share price. Right? But the bars are at $13. There is no one in between. There is no market on The buyer side, and on the seller side he’s sitting at $15 and he’s saying, “If anyone wants me and he wants him?” And then someone says no and someone accepts that $13. Boom! And then all of a sudden, it’ll be like $13, $11, $8 and that is what happens in terms of irrational behaviour in a market that’s heavily volatile.

We don’t see that in property Bryce. And there’s a couple of obviously good reasons why.

It’s an illiquid asset. It does take a long time to transact. And there’s also a couple of important things when it comes to economic behaviour.

In terms of the study of behavioural economics, there has been lots of research done in two particular areas. One around loss aversion. So most of us don’t want to give up on something that has been lost. And those people in the share market who haven’t sold, they haven’t lost a thing yet. If they stay for the longer term, you know the market should materialize itself and rational thought processes and business valuations will improve and those types of things will happen. But loss aversion is a big trigger where I might potentially, as you say before, take my property off the market.

That compounding thing to that is what we call the endowment effect. Now the endowment effect is basically where, if I think my thing’s worth more than you’re willing to pay. So this is basically willing to pay versus willing to accept. If I don’t think I’m going to get a price for it and I know in the short history that my property was worth a little bit more, I just won’t accept it. And because I’m 100% in control of that transaction, it’s not like the stock market, whereas I am one of many or playing in a live market, I just don’t sell. So that’s where we also get that underpinning in terms of behaviour. We do believe that the activity will slow down. There is absolutely no doubt that there will be people who will withdraw their properties. And we’ll hear from our buyers agents side.

Bryce:   Well that’s a good point. You decided that we should share this and it might be worth coming to them shortly. Cause the impact of this pandemic is not showing up in the data and it’s actually not showing up at the coalface. So we thought it was a good idea too. Cause I speak to my buying team all the time, right? And you said, “Well why don’t we bring the community in to some of the discussions that we’re having.” So what we did is we recorded a little earlier, a round table chatter that we had with all the crew. So that you guys can get a bit of a sense of what’s happening in the front line because people don’t get access to this every day Ben. We might cut to that now so that you can get a bit of a sense of what it’s like buying across the country right now.


Bryce:   So, Ben, what we thought might be a good chance for our listeners is to get a bit of a sense of what’s actually happening on the ground. And I know you’ve got some feedback from a couple of the chats that you’ve been having.

Ben:       Yeah Bryce. I think it’s important, right? Cause the soundbite we’re getting in the media and now the newspapers talking about property prices are going to drop by 20% or more because the share market’s done it. There’s just this automatic reaction. Well it’s different when you actually get the context in the field. I was talking to a very strong business and they buy a lot of properties. And I was talking to one of the agents who was actually over in Perth at the moment, sussing out that particular market at the moment. His observations on the ground over there is that they see this as an Eastern suburbs virus. Eastern seaboard, I should say, not Eastern suburbs. Eastern seaboards virus. And so they’re not as concerned about that, but they’re now starting to catch up in terms of what’s happening now. His feedback was on, he’s just finding it a little bit challenging with stock. And then also last night I spoke to another very, very prominent buyers agency group. Just to get a sense, they actually rang me and it was telling me that he got gazumped on a deal just last night.

So there’s no doubt that the buyer activity is still alive and well at the moment.

Bryce:   Yeah, it’s a good point you raised Ben. What we thought we’d do for the benefit of our community is actually talk to our crew exactly what it’s like at the coalface and to help our community get a bit of a sense of marrying some headlines up to the reality. So Bryan, give us a bit of sense of some of the conversations that you’ve been having over the last couple of days in particular the types of properties that you try to buy and what sort of competition levels you’re having.

Bryan:   Yeah, the demand is still there with all the properties that we’re buying. Last night, I was still competing with other people in the marketplace. People still need a place to live and that demand hasn’t really come off that much. I don’t think at all since all this has happened. In one of them, I was competing with three people and another one was four others. What I’m hearing from agents is they are saying that a few vendors don’t want to put their properties on the market because they don’t think they can get the best price. So, I would maybe be doing a few more off markets purchases this month than I normally would, but yeah, the demand is still high and we’re competing on the properties that are investment grade.

Bryce:   What about some of the conversations that you’re having with real estate agents? Are they recording similar things in terms of the demand?

Bryan:   Yeah, that’s right. For them, I think the demand is still there but they’re just organizing. I think in Brisbane, they’re not doing open homes. They’re doing virtual open homes, so they’re still technically working very hard to get the deals done. And they’re still getting sales through. It’s just a matter of stocks coming on as well. So, you know, less stock, obviously means it’ll push the prices up if the demand stays the way it is.

Bryce:   And I guess the point there too is that our real estate agents are being creative Ben. In terms of distancing, they’re doing the one and a half meter. Some people in some people out. So they are adapting. But at the end of the day, their role is to still transact on real estate.

Ben:       And it wouldn’t surprise me if they take that to the next level where they have a thermometer and basically doing what they do at the airport which is just basically getting a sense of temperature. It’s going to feel weird. But I do see that as being a means by which they’re showing care. There might be tenants in the property. Care for the owners of the property as well. They will also be instructing them around not to touch anything, to just basically come through look, but not touch. And those types of things where we’re practicing good hygiene. We’re practicing good ways in which we can do that. So I think it is uncharted territory.

Bryce:   Last thing for you, Bryan, is what about the conversations you’re having with clients because, you know, are they seeing the opportunity and staying big picture?

Bryan:   Yeah, definitely. The ones that are income affected due to this are obviously on hold, but a lot of my other ones are pretty excited. A bit of opportunity in the market. Some have given me a bit more money to play with to get in a better suburb or a better house. So I think most of my clients are pretty positive on the whole thing.

Bryce:   Yeah, very good. Thank you for that. I know you’re just on your way to a to an inspection, so appreciate the input there. We’ll let you go. Over to Christa. What about you? What’s your sense with your clients and what you’re experiencing the market?

Christa: Okay. Well, experience in the market I haven’t seen a slowdown and as you know, I’m across most states. As an example, the Adelaide auction I attended just as a spectator last week. I’m on a little property South of Adelaide and there was probably in excess of 80 people there. There were six or seven bidders. The guide quote was $590,000, and it then ended up selling for $726,000. That was almost like a Melbourne style price event. And again the demand in Melbourne, it’s very strong. Again at auctions on Saturday, large crowds, number of bidders. So the market hasn’t been tamed by the events of what I can see at the moment.

Bryce:   Hey Christa, can you tell us a story about your client that you’ve been dealing with who’s got a China experience? I think the anecdote that you shared would be beneficial for our community.

Christa: Yeah, it’s really interesting because this particular client is Australian, but he has been living overseas for a number of years and he is in the thick of where it’s all been happening in China. But after communicating with him over the weekend, he’s basically saying to me that Australia is where China was probably six or seven weeks ago. And he said that the anxiety has definitely subsided in China. They are obviously still taking precautions with some travel bans and masks, but all in all, things in his mind in China are back to normal.

Bryce:   Which is interesting because it’s kind of gives you a sense of what the other end looks like. Cause here in Australia we don’t really have that sense of what the other end looks like. What about some of the conversations you’re having with clients, Christa, in terms of you know, the headlines that they’re experiencing and marrying that against the opportunity that’s in the market.

Christa: I think my clients are pretty well educated and they’re quite aspirational and inspirational so they understand that the opportunity may be there and they’re not wavering because obviously they’ve had a background of creating a property portfolio plan and having buffers in place. Therefore it’s full steam ahead for all of my clients that are currently looking for property.

Bryce:   I think you raise a really good point, Christa, because the people who can take advantage of an opportunity now are really the people who’ve done the work up the ground where they’ve thought about what this looks like. They’ve planned, you know. We’ve talked about it on many podcasts, but we factor in four weeks vacancy every year, put 1.5% of the value for maintenance in our Property Portfolio Plans.

Ben:       And 6.5% interest rates with no depreciation.

Bryce:   So we’ve actually front footed in all of our Plans for an event like what we’re in now anyway. By default the people that we’ve had through our planning process are very well prepared for this.

Ben:       It just highlights the importance of that planning, the mindset and making the invisible visible.

The fear is about the unknown unknowns for most in the community.

And by demonstrating that there’s a process and a program that you go through and you then share and make those unknowns known, you can fulfill your objectives and take an opportunity to act in those uncertain times. Thank you, Christa. All right, so what we might do is go to another one of our buyers agents, Jake, who’s also across the entire country. Jake, you’ve been listening to the conversations we’ve been having, and you’ve got similar experiences. Can you share what it’s like, first of all, the mindset of the discussions that you’re having with your clients, in terms of against the headlines versus the reality of buying. And also some of the experiences that you’re seeing as you’re out there looking at property.

Jake:      Yeah, so I can agree with the sentiment of the other buyers agents in the team in that I haven’t noticed any substantial change that has materialized yet. When it comes to the amount of buyer demand out there, the weekend’s auctions were well attended. The clearance rates are high. What I am sensing through conversation with agents and purchasers is that there is a sense of unease.

But I think as long as these people are being pragmatic in their preparations, there’s ways to overcome any obstacles.

And the feedback I’ve had that has been weighing on people’s minds are mainly been around if I’m buying an investment property, what’s going to happen to prices? And also what about rental and can we afford, if there’s any kind of rental gap. For example, we just had a purchaser who was talking with me about potentially cooling off because they were a little bit worried, but we unpacked everything, we worked through it and all we did was renegotiated the settlement date with the seller and push it out by another month. And then we had an agreement in place with that seller that if we do find a tenant during the settlement period, we can bring that settlement date back forward because then it gets rid of that uncertainty about having an income producing asset.

And I think as long as sellers and buyers alike are being pragmatic in their approach and thinking things through, there’s no reason to be over concerned. There’s still great properties out there with strong fundamentals for the long term. And that should be more beneficial than being worried in the short term.

Bryce:   Very good. Thank you Jake. Hey Nic, how’s it going at the Sydney market? We obviously had a couple of Melbourne perspectives there, but we’d be certainly interested in what you’re seeing on the ground on the same basis. You know, what are the discussions you’re having with clients in terms of sentiment and what are your experiences as you’re on the ground looking at property every day?

Nicole: Yeah, so there are three data points to share in that regard to Sydney and one in Melbourne from the weekend. So literally, last night, for a homeowner brief, I was at an auction in Southwest Sydney, a suburb that’s doing very well on the demand supply ratio. That was a well-attended auction, 50+ people and six registered bidders. You need to register in Sydney, in New South Wales to bid. Three actually bid on that property. We unfortunately missed it on a guide price of $1,020,000 and it’s sold for $1,170,000. So some $150,000 over the quoted price. That was a miss for us. But just shows that there is still a strong sentiment in the market by just scanning the room that was predominantly homeowners looking at that property.

We did have success with a purchase on the fringe of Sydney city, a terrace, two days ago. And what we’re finding in that market, the city fringe properties aren’t actually making it to auction. The demand is quite strong. There’s a lot of pent up demand in those markets and just the queue at the property. You really need to offer prior. So that was a property we first saw at the tail end of last week. We shut down that process and bought that. Circa $1.45 million pre auction that was headed to go to auction on 4th of April.

And just in Melbourne last weekend in Brunswick, we were also successful. Brunswick is notoriously difficult to buy in. There’s a lot of demand to buy in that area. Both homeowners and investors. A hundred people over in the street there and we were the recipient in that auction. One of our key competitors did pull out as a prospective buyer the night before the auction. So that was good news for us. And we were one of three bidders at that auction guide price and we bought it at $1,000,577 so again, strong demand and the underbidder was $1,000 behind us there.

Bryce:   Nick, you’ve got an interesting story too about a contrast between someone, one of your clients, obviously without that being specific on names, but who’s involved in the equities market? He’s seeing the volatility there, but really saying, well, “I really want to park my money into real estate.” Can you share that story?

Nicole: Yeah. That was the Brunswick example actually on the weekend. That client is bullish and opportunistic about the market as it stands at the moment. And because he’s playing the long game, he’s not Uber sensitive on trying to time the market to perfection because he knows from his experience in the share market that’s not what it’s about. And he’s not speculating so his intention is to balance his portfolio and he’s got greater exposure to the share market. So he’s actually looking to potentially bring forward another property purchase that he was intending to make in 2020 so that he can balance up his property in an asset class, which he sees has been quite stable over the long term, being property.

Ben:       That’s brilliant intel Nic. Thanks very much for that. I mean, obviously for our listeners, it’s really important to hear that, but it sounds like everything’s really, really positive. But I want to turn to you Matt in regards to the client you’re dealing. And just to give context, our buyers agents usually have around 15 to 20 clients on their book. Some in different stages. Some getting a finance deferred, some good to go, some are the latest engage clients that they’re working with. So there is a real spread and diversity of assets that we’re buying right down from entry level properties to city fringe to $2+ million purchases. And I think it’s important to understand that the brief is not always just about the capital growth story. It is also potentially a yield story.

Bryce:   But as a clarifying point in that 15 to 20 you touch on, is the fact that we’re getting them prepared. They’re not always in a good to go phase. They’re not rushed. They are in an incubation.

Ben:       They’re in a program of work that will prepare them…

Bryce:   Well, it just means that the buyers agents have a handful of good-to-go clients knowing that they’re nurtured. Some folks are getting their equity rolling, pre-approval and that sort of stuffy.

Ben:       We are also not immune to the phone call where people get a little shaky. So Matt, I’m wondering whether you had an example where you’ve had a phone call with someone that has got a little bit nervous and what have you been talking about to them in terms of why it might still be a good reason to proceed?

Matt:     Yeah, thanks Ben. I had had a call actually last week or the back end of last week where we bought a really good property on 700 square meters of Bayside dirt in Melbourne. North facing really good house on a renovated and already has a tenant as well which is fantastic. It’s on a long lease and a lovely older lady, the tenant. My client is Australian but based currently in the States. So they’re a little bit more advanced in terms of everything that’s happening. He was just getting, I suppose smashed with the headlines and so, did call me up and inquired about calling off. He was a bit nervous and a bit jittery because he’d been a bit of a procrastinator in his own right. He’s been taking a long time to make a decision and he felt like… Obviously there was some moving goalposts, but basically after having a really good chat, just talking about the fundamentals of Melbourne, which is, you know, we’re getting in excess of 120,000 people per annum. Significant population growth and demand for real estate, which is essential need and shelter. He’s just decided to go ahead with the purchase. So you know, really happy that… For him though, again, it’s like anything, there’s a lot of noise. You got to go to the facts.

Ben:       We’re all human, we’re just human.

Bryce:   That’s it. I think that’s a key point too Matt. Whenever there’s noise, you do have to get into the facts. And I think that I guess, again, labouring the point that if someone has planned and prepared for some time, then they’ve got all the fundamentals in place. And sometimes, it’s just a little bit of a reminder that… And we’ve talked in this podcast, actually, I don’t know where it’s going to be, so I won’t to do that. But, you know, it’s just a reminder that the fundamentals of real estate in this country are very good.

Ben:       And our messaging has been consistent from day one in terms of when you take advantage of opportunities when you don’t. And we’ve talked about that as well. So Matt, what’s the feedback you’ve been getting from the agents? I mean, one of the things that we always like to understand is that will there potentially be a slowing of activity. Where do you see that showing up in conversations with agents? Just about, you know, being able to show homes and that type of thing.

Matt:     Really good question Ben. So I’m actually looking for obviously for my clients and also personally looking at a home as well. I’ve sort of got two different ends of the spectrum. But you know, across the board, agencies still are trying to address every day and even yesterday, a line agents, you know, a couple of agents sold two properties and each in the last couple of days.

So they’re still, as I say, getting the deals together. In terms of how they’re doing it might be slightly different. There are a few more off markets. I’ve noticed even just as yesterday, a few more calls from agents wanting to get us as buyer’s agents through cause there are still people really keen to transact real estate.

What I’m seeing in the marketplace is significant owner-occupied demand, which is why I’ll have to stand down on a few properties for clients because the demand was so strong.

The prices were too high. And so I think in terms of getting stock, it’ll be just like some of the precautions and not having mass open homes. Small groups through such as off-market showings or private viewing. So there’s a lot of different ways. They can do it virtually. So I can’t see any slow down at all cause there’s been significant demand. And agents are still transacting and still got really good owner occupier demand because there’s that need for people to have a home and with that pent up demand and cheap money, people really want to get a foot in the property ladder.

Jake:      Well, one thing that I’ve noticed just in the coming week or the last week gone is that the relationships with the selling agents, they’re leaning into me as a buyer’s agent a lot more. And I think topping on what Matt said just then, it’s mainly because they know that if things do slow down a little bit more, there’s still going to be buyers out there and they’re going to be working to get the deals done for the sellers in the best and quickest kind of manner. So maybe some sellers out there don’t want to go to auction anymore.

They might want to sell off market or private sale and an agency calling us as the first point of call.

Ben:       I think you do find in these uncertain times that there is a trend to go to the experts. You know, we’re being guided by our health experts in terms of the medical challenges and the health challenges that are presenting at us now. But it happens in everything. If you’re unsure, you should always turn to the experienced experts who have been here before and have experienced that type of thing. So I think it’s not a bad point that you make Jake.

Bryce:   Alright folks, thanks for taking a little pause in your day. I know that you’re out there in the trenches talking to agents, talking to clients. I’m looking at real estate deals being put together. So, appreciate you guys sharing your experience and what you’ve seen in the coalface with the community.

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Bryce:   Alright Ben, so clearly, you’ve heard from… I’m obviously going to talk up my team cause I’m really proud of them but they are the front line Ben. They’re in the field. They are dealing with real estate agents who are dealing with this. They’re dealing with clients who may have some anxieties and they’re dealing with a property market that is … The evidence is suggesting that there is no lack of demand. The practical is that there’s not a lack of demand and going forward based on what we talked about, it’s the bigger picture.

Ben:       Bryce, it adds to my calmness. I mean these types of things cause we are privy to the data. We’re privy to all this information. So it adds to my calmness. I’m not going to listen to the stories of 20% property price drop. It’s just noise. I keep coming back to all the things that I know. That I’ve been here before and those type things.

And so I think it’s really important because some of the speculators are going to say, “Oh, but you know, the whole thing is going to implode on itself.” Let me just give everyone a reminder that the global LVR across all properties in Australia is 25%. So that basically means it’s very safe. If we talk about debt to asset ratio, very safe.

Now we get that some people have a very high LVR and some people have almost a zero LVR. But the point is globally, it’s not a vulnerable asset. We’ve had another rate cut. So today we get this new rate cut that comes through. So that’s all good.

Bryce:   Stimulus packages, incentives to help small and medium businesses. The point is that people don’t have to suffer this alone. Now I think it’s important to say that quite often, the criticism that you can get from someone like you and I in this position is,

“It sounds like it’s always a good time to buy property,” right? But to the answer of when should I buy? I think that that should be tweaked in this country based on the fundamentals that we’ve talked about.

It shouldn’t be what should I buy? It should be where should I buy? Because there is always an opportunity in a country like ours that has so many various markets.

If you think about down in Perth, no, but if you’ve been thinking about the last little while, even over the last decade on the Eastern seaboard right? There is always an opportunity to buy. So that puts that to bed.

The question is now, do we think it’s a good time to buy?

The answer is yes because there is an opportunity where you have this uncertainty. Because on the other side of this, the demand for real estate is going to spike. It is going to spike. So for someone to say, well why would you say now during the uncertainty versus why not wait, well we’re going to qualify this. There are some people who should wait and we going to talk about that shortly? Those people who are not in a position where they need to wait… The question often is, well, why don’t I just ride it out for six to eight weeks and wait? The answer is because if you do that, you will put yourself in a position where you are in a feeding frenzy where just trying to buy….

Now there’s one thing to say, “I want to buy real estate.” And there’s another thing to say, “Well, I’ve actually got to secure real estate.” Those are two very separate things when you have a very sharp increase in supply and demand. And it might be a good segue for you to kick us off, Ben, in terms of who should buy and who shouldn’t buy. But if you are one of those people who should buy, that is why. If the demand for property was 8 and has now dropped down to 4 or it’s even, you had one that had demand of 5 people, it’s now drop down to just 2, with the outlook, that’s where the opportunity exists.

Ben:       I mean we know that all of the fundamentals. Let’s throw the others in there so we round it out.

Personal tax cuts, vacancy rates are falling. And we had actually really strong ball of momentum up until this point.

We saw our numbers up until February, 10.9% growth in 12 months in Sydney and 10.7% growth in Melbourne. That’s capital growth and add the rental yield on top of that and you’re talking about 13% – 14% overall returns. So we know all that. So I embed what you’re saying here.

I can’t guarantee nor could anyone who’s sensible, will say that you’re going to buy at the bottom and is there going to be a dip. Or if there’s not going to be a dip. They will be some force sellers, but I’m not sure that that’s going to be concentrated enough into a particular location that I could see any real opportunity that I could say, “Right, that suburb there is going to have huge amounts of mortgagee sales and we can go and cherry picked that.” I just don’t think that. I think it is spread across people who’ve got themselves living beyond their means anyway.

So, I come back to the fundamentals which is, and we had not said this any other time and any different from when we first started the podcast from day one, Bryce.

When should I buy a property? When I have security of my job and I have a good surplus.

And I know for the short to long term that my cashflow will support that and you should buy property when you’ve got those ducks lined up.

Bryce:   I hear you Ben. Because we talk about Four Pillars of Mastery, Ben, and let’s be honest, three of them get most of the headlines and one’s the poor cousin, which is defence. But what I would say is, if you have mastered the pillar of defence, with the caveat of the job security, those are the people who are poised to actually do something now. Because if you think about the Property Portfolio Plans that we put in place, Ben. We always make sure that that there’s four weeks of vacancy factored in a lot of the properties we have. Once the change has happened, it doesn’t have that vacancy right? We don’t put any depreciation in. We’re very conservative on the interest rates. We also factor in 1.5% of the value for maintenance because we’re buying an imperfect asset. It’s not like a share. A house at some point may have a hot water system that needs to be replaced. We’re buying established property. By nature, we’re buying stuff that will need to be turned over and maintained. So, we’ve been preparing in our modelling for this anyway in terms of that defence.

Ben:       I mentioned it before, 6.5% interest rates. And I just told you before that they are going to be as low as 3% or even a two in front of some of them for P&I. So that’s three times the conservative buffers that you will need to be able to get through this time period. Google interest rates around the globe in terms of what the housing interest rates are, and you’ll be mildly surprised at how expensive our interest rates are.

We’ve got one of our particular staff members who lives in France. His interest rate for the remainder of his loan term is 2.99% loss in Bordeaux in France. So that’s life of the loan, right? We have expensive interest rates, but comes back to our story. We’re an aspirational country and we have very, very high wealth. And with that comes margin and, and there’s a reason why our interest rates have been higher and why our inflation lives in that particular category. So we’re going to get onto the people who are going to be affected by this, but let’s just round out those people who should be looking to take opportunities now. And we’re generalizing here, so it’s really important to understand that. But if you are someone who is in science, medical, technology, potentially certain parts of transport and infrastructure around logistics, construction, infrastructure, engineers, government, professional services, the likelihood is that you are the 60% of people who may not be affected by this.

And I want to particularly highlight our emergency services people, our teachers and all of those types of people. You guys do an amazing job and you don’t get paid what you should be paid. And our nurses and all of those great people that do all this great work and you know, are government paid. If you’ve got good household budget, your money’s in order, you’ve got good surplus and you’ve got equity in your property, this isn’t a bad time to potentially see an opportunity where you can help your family go on that journey of financial transformation. So they’re the people that we’ve been talking to now that should see this as a potential opportunity.

Bryce:   And think about the discussion we have with our Buyers Agents just now. One of the directives we gave them is you talk to your clients and you make sure that their security is rock solid, which is what they’ve done that, right? Which is why they are then able to proceed.

Ben:       And some of them we’ve had to stand down. We’ve got some pilots who obviously, we know Qantas just announced that they are grounding all international travel for the immediate term.

So the reality is, for those people who are affected, it’s absolutely alright to stand down. So please don’t push yourself into unchartered territory.

If you know that there’s a little bit of uncertainty and especially in hospitality, we’re getting into those industries now. The people who are in hospitality, travel, tourism, discretionary spending, retail, events, weddings, all those types of areas are going to be significantly disrupted.

Bryce:   Small businesses and sole traders.

Ben:       Yeah. The people who don’t have the buffers and are exposed in that supply chain. In terms of what those businesses look like? Your time is not now, and we’re sorry that that is the case because what we do know about your next decade is there are aging populations all around the world who are cashed up. So, travel, tourism and hospitality, those types of industries are going to have an amazing time once we get past this health crisis. So I think your time will come, but it’s just not right now. And what we want to be talking to you about is exactly the same as what we want to be talking to the people who may see these uncertainties and opportunity. And that is get on to the MyWealth portal, the Money SMARTS platform, so

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Basically, get on there and do your finances. If things are slowing down and you do have to have a bit of time at home, then it’s always good to grab the latest Netflix or whatever it is you’re going to do. But please, please take a moment on both sides of the fence to basically do your numbers. If this is the jolt that you need to basically look at your financial circumstances, we employ you to have a look at those and get some confidence around it.

If you’re anxious about your cash flows and how much money you’ve got in buffer, get on there. It’ll show your surpluses.

The other great thing about the platform is it’s free and it separates at discretionary from essential spending. So you can then also see exactly what your minimum cost per week, per month is going to be for yourself. And you can start to then say whether it’s plausible for you or whether it’s, “I need to get Money FIT.” And I need to organize my money and start the Money SMARTS System. And what else do we have to support that Bryce?

Bryce:   Well said Ben. So clearly we’ve got a group of people who aren’t in a good position right now.

So step number one is…

Cause we’re going to give out those resources for free, right? And we’ve been saying that for a while. So step number one is to go to and get the free book. That’s important so that you’ve got the instruction manual.

Step number two is…

Go to And so that will give you the platform to do exactly what you just said, Ben. You can go through your numbers and it gives you a lot of graphics so you can get on top of it. Cause right now if you’re in that position where you’re vulnerable, you need to know where your house is at, you need to know your numbers. And then the next step, once you’ve done that is to do some planning because this takes time. The people who are in a position who can act now is as a result of two things. One, they’re in a job secure industry and two, they’ve done the planning. So give the aspiration of where you want to be when we come out of this. Number one is to get the book, number two is to get on the platform.

Number three is…

To start thinking about what their planning looks like so that when you are in a better position to make sure that you’ve got emergency money, you’ve got buffers in place and you’ve actually planned for events like what we’re experiencing now.

Certainty through the clarity because everyone is craving certainty right now, Ben. And the way that you can get certainty is through making sure that you, I don’t know if we’ve ever said this before, but plan to become what you plan to become.

I don’t want to make light of it, right? But planning at this point has been more crucial than ever.

Ben:       Totally and look, we are not done on this topic. It is obviously something that is one of the biggest events that we’ve ever seen and experienced globally. It is a true test of our resilience as human beings. We get that. And you know, we are fortunate that we are a little bit more isolated than Europe. They’ve had to you know, make more significant changes.

We expect that our numbers of cases will grow. We expect that there will be further mobility adjustments that are going to be done. We will talk you through that. We will keep you updated on a weekly basis in terms of what we’re seeing in the field. We will do that for you. Obviously today the Reserve Governor and the board are meeting, I will do an update for everyone soon in terms of what that looks like.

Our job is to keep you informed and to give you a level of calmness and confidence that we currently hold ourselves.

Right now, we are sitting very comfortably. And we want to help as many people as we can in terms of organising their finances and get an understanding of what that looks like. And we obviously did our Seven Grades of Financial Wellbeing last week. If you haven’t listened to that, circle back to that. If your situation is in a place where you do need financial assistance, the first point of call in regards to any mortgages or overpayment commitments that you need to make is to ring your provider. Ring the bank. They are willing and able and ready to assist. They are getting instructions from management that they also know. No one’s trying to profit from this environment. Everyone just wants to get through it.

So effectively they will put repayment holidays in place for you and they will continue to keep monitoring the situation with you to help you get through this period. If your situation is even more dire than that, then we obviously refer to the financial counselling links. So they are all in the show notes from last week’s episode as well.

We will continue to keep you informed. We will continue to keep reinforcing the messages, will continue to keep working on your mindset to help you understand the opportunity it presents for some but also the opportunity for others. But it just might be in the wealth creation, property investment space for today.

Bryce:   Just to round that discussion bit. A couple of things. Just remember to be kind to others. The people in the health services and in the supermarket. If people are feeling anxious, just be the person that’s calm to others. I mean just respect each other.

The Australian spirit means that we get through things together. We saw that with the bushfires. We are not starving, we are a food bowl.

We are not going to run out of food unless people continue to hoard buying. Don’t do it is what the prime minister said.

Ben:       And if I can just be a little bit critical of that. All of these canned food that everyone’s buying still has an expiry date. So you could be wasting money if you don’t use it. Now, your toilet paper, different story. But anything that’s basically perishable. Even in the medium to longer term, if you’ve gone and bought 30 jars of pasta sauce, then the reality is you’re probably going to throw a few of those out because once you realize that every day, they stock the shelves. They keep getting restocked and we’ve got no supply chain issues so you might look a little bit embarrassed to be honest with you. I am, you know, eyeballing you on that embarrassment.

Just take the advice from the people who are delivering the goods, who are saying, just pick up what you need. You know, those supply chains will be open. And if we do have a potential slow down or further mobility change, we’ve seen it in Italy and we’ve seen it in France, the supermarkets and the pharmacies remained open. If your neighbour can pick up some of your stuff for you, we’re seeing good gestures being done. So I think they’re really nice messages on respecting each other.

Bryce:   And this one Ben. Protect our most vulnerable. The supermarkets are trying to find an emergency line for those who are vulnerable.

But some of our most vulnerable aren’t just the elderly, they are hiding in plain sight. They’re the people who do not have enough money to stockpile.

And therefore they could go without the basics if they just can’t walk in and get it. So folks that is our message to you in terms of getting through this particular point in time.

So, my life hack today Ben, I don’t think you’re going to be surprised with this. Is connect with people. Ring them up, ask them how they’re going, don’t do it on social media. Do old school, pick up the phone and ring them up. Spread that contagion of connection and when you’re chatting to them, share what you’re grateful for. The little tip is, just have a look around within 50 meters. Cause sometimes it’s, you know, I’m grateful for the fact that I live in Australia and those things are really real Ben. But sometimes it’s just good to say I’m grateful for the fact that within 50 meters of where I am standing, I’m grateful that I get to hang out with two amazing human beings.

I’m grateful that I get to share a message of hope to our community. It’s not hard to find something to be grateful for. So spread that contagion and you know, shout out to my good mate of mine, Nathan, who rang me the other day and his goal was just, ringing everyone just to make sure they’re ok, just connecting, reminded me of the bigger picture we’re doing. And then he goes and I’m just trying to find out who in the community needs help cause I want to run around and help someone. What a legend.

So my lifehack today is, connect with people, ask them how they’re going and spread the contagion of connection.

Ben, did you know?

Ben:       Did you know Bryce? Well I just thought I’d round out today’s conversation just around some of the auction clearance rate because again, we get some soundbites around what the numbers look like and they’re definitely softer than the week before but it’s a difficult read the week before because you’ve got the public holiday, Labour’s Day. But I also want to highlight just some of the different regions. I’ll just do Melbourne and Sydney because they are our auction capitals.

Let’s start with Sydney’s Auction Clearance Rate. Baulkham Hills and Hawkesbury, they did 62.5%. Black Town, 83.3% clearance rate last week. City and inner South, 76%. Eastern suburbs, 70%. Inner Southwest 78%. Inner West 75$. North Sydney and Hornsby 76%. Northern beaches, 84%. Parramatta 80%. Ryde 81%, Southwest 63% and Sutherland 72%. So you can see when that’s reported, that comes into a clearance rate of 74.6% across Sydney. But you can see there’s markets within markets, which is what you reminded us of again Bryce.

In terms of the sub regions of Melbourne, here are VIC’s Auction Clearance Rate. The inner area 71.4%, Inner East 65%, Inner South 80%, North East 65%, North West 70%, Outer East 76%, South East 60%, West 72.6% and Mornington peninsula 73.3%.

So with an overall clearance rate across Melbourne of 70.1%. Again, markets within markets and come back to the fundamentals. You will always buy in areas where the demand exceeds supply and then over time that property price will deliver hopefully a healthy return for you, whether you’re owner occupier or whether you’re an investor. We have a very, very positive future ahead of ourselves.

Bryce:   Well, I like the calm voice that you rounded that off.

Before I kick it over to you, folks don’t solve a short-term problem with a long-term disaster.

That applies equally to the property as it does to share. Alright Ben, that’s been a big episode. Hopefully that’s given some people an opportunity just to take a deep breath and see the bigger picture. But until next week mate?

Ben:       Bryce, I’m calm but I’m ready to act. So knowledge is empowering and I’m going to act on it.


Hey there folks, Bryce Holdaway here again. Before you go, if you’re new to our community and only listen to maybe a handful of episodes, I thoroughly recommend that you go all the way back to episode number one where we unpack all of the foundations when it comes to property investing. And for those of you that might be a little bit time poor, I’ve got good news for you. We have a binge guide that you can download straight away, which summarizes the first 20 episodes where Ben and I unpack the foundational pillars of the ABCD and so much more. And you can get that straight away if you go to You can download it and consume it whenever you want. It’s completely free and available now. And for those of you, just a quick reminder that nothing we’ve spoken about today constitutes financial advice, we recommend that you reach out to your licensed professional advisor so that you can look at your unique circumstances before acting on any information. And don’t forget, go to and get your binge guide today.

Note: We released an episode on The Property Couch every Thursday at 3pm. If you’re interested, you can subscribe to it on iTunes, Spotify or Google Podcast.

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