The Michael Yardney Podcast: Recent Episodes

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We’re halfway through 2021 now so it’s a good time to reflect back on the year so far and then look forwards to what’s ahead. Property values across our capital cities have experienced double-digit growth already this year, in all capitals other than one. And despite the Covid concerns we’re experiencing, there’s plenty more growth to come. The surge in property value has caused the property bears to go back in their caves and hibernate and our major banks have done an about-face and are now forecasting 20% to 30% rises in property values around Australia this cycle with strong growth continuing for some time. And the economic Armageddon predicted by some didn’t eventuate and we didn’t fall off the assorted cliffs that were meant to litter our path along the way. So, in today’s podcast, I’m going to have a chat with Australia’s leading economist, Dr. Andrew Wilson, as we look back on what’s happened to price growth so far and give you some thoughts on what’s ahead. This year’s property growth and what’s ahead No one would have predicted the unprecedented record-breaking levels of high house price growth in the first half of 2021. The outstanding performer so far this year has been the Sydney property market where house values have increased 17.8% this year alone. In fact, Sydney home values have increased 24.2% in the last 12 months. Sydney apartment values also increased, but not as much - increasing 7.3% in the last six months and 9% in the full year. Over the six months of 2021 so far: Melbourne property values have increased 11.8% Brisbane values were up 10.7% Adelaide values rose by 10.4% Perth values increased by 8.1% Now it’s important to remember the capital city of values set their previous records in September 2017 and today values are only around 10% higher than previous records. In other words, the market did but it always does, operate cyclically with periods of flat or no growth and even periods with property values drop. How FOMO Affects the Markets The other critical factor, of course, is fear of missing out (FOMO), a self-fulfilling cycle where those yet to buy in are motivated to do so by the prospect of having to pay more to do so at a future date. None of these factors look likely to change over the rest of 2021, and it’s likely that house prices could rise by another 10% before the end of next year. Of course, this is just average price growth, and the upper end of our property markets are outperforming cheaper properties, and for the last month, capital cities are outperforming regional Australia which performed strongly during the Covid lockdowns last year. In due course, the property markets will slow down as affordability becomes an issue for some homebuyers and investors. Regulation appears to be imminent. Historically, surging house prices have tended to lead to a deterioration in lending standards and risks to financial stability, giving regulators impetus to tap on the brakes. The RBA has given fairly strong indications that they won’t use monetary policy to this end, at least not yet, so expectations are instead that they and APRA will look to macroprudential controls such as increased interest rate buffers, and limits on high loan-to-valuation and high debt-to-income ratio lending. Government stimulus measures will continue to be wound back. HomeBuilder, a major driving force for the market through the pandemic, has now ended, and smaller state housing incentives may also be retired over the coming months. More broadly, the indirect influence of fiscal latitude will gradually be reduced as governments seek to move their budgets back towards balance. Low immigration will continue to be a drag. Restrictions on migration have cut underlying demand for housing by around 100,000 dwellings (nearly 50%) this year, and this is one outage caused by the pandemic that won’t be switched back on overnight. Even with a vaccinated population, borders will probably be opened gradually with quarantine requirements remaining in place for some or most arrivals. Immigration will recover slowly. But currently, with the lack of new apartment construction it’s likely we will have a looming undersupply of apartments once our borders are open. In my chat with Dr. Andrew Wilson as we discuss how despite the doomsayers’ dire predictions our housing markets remained resilient last year, but growth was stifled by lack of consumer sentiment The markets turned in October 2020 and have gone gangbusters over the first half of 2021 Those who heeded the negative nellies lost out, while home buyers and property investors who took a long term view have already enjoyed significant capital growth. Listen as we discuss how each state government introduced their own set of temporary measures to stabilise the rental markets, prevent evictions and support tenants in hardship. Rental vacancies in our big capital city CBD’s spiked due to the lack of overseas students, no overseas tourists using Airbnb and decreased local tourism While rentals initially fell, vacancy rates, especially for houses are now falling and the rental markets are tightening. Resources: Watch the Property Insiders Video of this session here Michael Yardney Metropole’s Strategic Property Plan – to help both beginning and experienced investors Guest: Dr. Andrew Wilson, chief economist of My Housing Market Subscribe to my weekly Property Insider video with Dr. Andrew Wilson here- www.PropertyInsiders.info Collect your bundle of eBooks and reports- www.PodcastBonus.com.au Shownotes plus more here: Amazing double-digit growth in property so far this year, with Dr. Andrew Wilson Some of our favourite quotes from the show: “When people feel about their jobs, when they feel secure about their financial future and employment, they make big investment decisions like buying homes.” – Michael Yardney “Our economy over the last year experienced that V-shaped recovery that we all hoped for, but not many of us expected.” – Michael Yardney “Most successful people fostered accomplishments in their lives by diligently doing things every day, but they also did it by diligently avoiding certain things.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

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The Australian housing market is going gangbusters and all the signs are the boom is here to stay for some time. But how do you profit from this current growth cycle? In today’s podcast, I discuss 6 property trends that you’re going to see – and hopefully take advantage of – in 2021. Then, in the second half of the podcast, I chat with property researcher John Lindeman, who will teach us how to profit from this stage of the growth cycle, because if history repeats itself, lots of investors will unfortunately lose money instead of profiting. My aim is to ensure that at the end of this episode you’ll have more direction and certainty to take advantage of our property markets over the coming year. 6 Property Trends to Look for in 2021 Demand from Homebuyers Will Remain Strong: People have saved money, borrowing costs are lower than they’ve ever been, and interest rates won’t rise for a while. Plus, COVID is under control. These factors will inspire more people to buy and FOMO will continue to drive homebuyers into the market. Investors Will Eventually Squeeze Out Homebuyers: Increased competition and rising property values will edge out first-time homebuyers as more investors get into the market. Property Prices Will Continue to Increase: Consumer confidence, low interest rates, economic growth, and a favorable supply and demand ratio will all help drive property values. However, some segments of the market will continue to struggle. Buyers Will Pay a Premium for the Right Neighborhood: People want 20-minute neighborhoods, with the ability to live, work, and play all within a short distance of each other. And buyers will be willing to pay more to get that. Expensive Properties will Outperform: Higher-end properties are leading the way in growth. Upgrading Will Be Common in 2021: After lockdown, small apartments will seem to confine, and people who a deposit by not traveling or spending much on entertainment during the quarantine will be eager to upgrade to a bigger and better place, especially given the ease of borrowing money. How to profit from this growth cycle Profiting from this growth cycle isn’t as easy as it seems. Property researcher John Lindeman reminds us of Warren Buffet’s famous two rules that all investors must follow if they want to ensure their success. The first rule is never to lose money and the second rule is never to forget the first rule. But if history repeats itself, some investors will lose money even though overall our property markets are booming, Today, John Lindeman and I discuss the things you need to know in order to profit instead of losing money. Subjects John Lindeman and I discussed today: Investors need to make sure they’re buying in markets where the growth is yet to come. You can’t measure growth by the length of time that price growth has been occurring or the amount of growth that has taken place. Growth is revealed by the types of buyers creating the demand. First home buyers, upgraders, downsizers, and investors have different motives and limits when it comes to buying property If we know which group is doing most of the buying, we can estimate when the growth is likely to end Investors are motivated by profit. Owner-occupiers are motivated by affordability In the current market, most buyer demand is being generated by owner-occupiers, not investors Investors can take advantage by buying property in areas that have not yet experienced growth but have the potential to. As first-time homebuyers reach affordability ceilings are reached and their growth slows down, growth will ripple to more affluent areas as upgraders take advantage of the market. So far, not much of this has happened yet. However, this means that suburbs in desirable locations are likely to be next to rise In general, it’s better to be in an area that’s going to be stable. You also want an area that’s in continuous demand. Capital growth has been stronger in the CBD and flattened out the further away you get from the CBD. It was predicted that a lot of people would move to the country post-lockdown, but that hasn’t panned out. Once the pandemic and the lockdowns passed, people realized they didn’t really want to relocate to the country and away from their work, family, and friends. Many banks, economists, and other analysts get their forecasts wrong last year. They looked at historical events like the Great Depression and the Global Financial Crisis, saw those caused property markets to slump, and assumed the pandemic would have a similar effect. That assumption was incorrect. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us John Lindeman – Lindeman Reports Get our special bundle of eBooks and reports at www.PodcastBonus.com.au Shownotes plus more here: How to Profit from 6 Growth Trends in 2021, with John Lindeman Some of our favorite quotes from the show: “If Coronavirus has taught us anything, it was the importance of living in the right property in the right neighborhood.” – Michael Yardney “Upgraders are now seeing the value of their home increase, and a lot of people after COVID, “I deserve a change. I’m looking for something different.”” – Michael Yardney “You’ve really got to see property as a long-term investment.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

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With more of us trading backyards for balconies and courtyards; apartment and townhouse living has become the norm for more Australians. At the same time, budget constraints mean that many investors buy apartments rather than houses. And since there is no doubt that apartment living is going to become more prevalent moving forward, you really need to understand your rights and responsibilities when owning an apartment. Where does your apartment end and where does the common property start? Who is responsible when things go wrong in the common areas? And what six things do you need to know before buying into a strata building? That’s what I’m going to discuss in today’s show with strata law specialist Amanda Farmer. The inspiration for this chat came from an article I recently read about a Melbourne schoolteacher who thought she done all her homework when buying her first property. She looked around her chosen area in Melbourne is northwest, found an apartment building she liked, and commissioned to building inspection report before she bought the property. But now two and a half years on, she’s facing financial ruin. Her block’s owners are taking its builders to court over allegations of severe defects in its construction, and she’s having to pay for both repairs and her share of spiralling legal fees. Sure, she had a pre-purchase report done by an expert – but he only examined her apartment, and nothing of the building in which it sits, or its communal areas, which all owners are responsible for. She didn’t realize, either, that she should also have ordered a strata report that would have revealed, through the minutes of the Owners Corporation, the ongoing battle with the builders. This is a tragic story – a 32-year-old financially ruined through owning the wrong apartment.  But it’s a story I’ve heard before, so I hope you’re going to get a new insight into what you need to do before buying into a strata property in my chat with Amanda Farmer today. What you need to know when buying a strata property If you’re considering buying or already own an apartment, townhouse, or villa unit, whether as a Let’s begin with the obvious – what is a Strata unit? Effectively it means: you own your unit or apartment as well as sharing ownership and responsibility for common property if you own your unit, you are automatically a member of the owner’s corporation which has responsibility for common property and makes key decisions affecting the strata scheme you contribute to the cost of running the building through paying quarterly levies you also have to pay money into a capital works fund, for future long-term expenses such as painting the building or replacing guttering there will be lifestyle restrictions in a strata scheme. 6 THINGS YOU ABSOLUTELY MUST KNOW ABOUT WHEN OWNING A STRATA PROPERTY:  1) By-laws  Includes pets, air conditioning units, noise, renovation works, hard flooring, washing, landscaping, use of swimming pool/gym, short-term letting, rules around moving in or out  2) Levies  Quarterly levies can range anywhere from $200 per quarter for a small, self-managed building (ie: with no strata manager’s fees) to in excess of $5,000 per quarter for a city penthouse in a luxury harbourfront building with concierge service and numerous facilities.  3) Lot property vs. Common property  When you purchase a unit in a strata building, you are essentially purchasing air space. That air space is known as your “lot”. Anything outside of your lot is either someone else’s lot or “common property”.  4) Meetings  Important decisions are decided in meetings: eg - whether to add to, alter or erect a new structure on the common property for the purpose of improving or enhancing the common property.  5) Strata manager  The duties of the strata manager include receiving and distributing correspondence, issuing levy notices, arranging tradespeople, keeping the owners’ corporation’s books and records in good order, including financial records.  6) Committee A decision of the committee is taken to be a decision of the Owners Corporation, though a committee cannot decide on anything that can only be decided by the owners in general meeting.  Links and Resources: Michael Yardney Amanda Farmer- Director Your Strata Property Get access to my exclusive Special reports library – a bonus for listening to my podcast As our markets move forward why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors. Join us at Wealth Retreat 2021 – click here to find out more Shownotes plus more here: 6 tips for investors when buying a strata property with Amanda Farmer Some of our favourite quotes from the show: “I’m actually proud that Australia was the country that was the beginning of strata law.” – Michael Yardney “I know that if I buy a house, I’ve got to do a building and pest inspection because it’s my responsibility – if there’s termites or if there’s rising damp, I’ve got to pay for it. What if I buy an apartment?” – Michael Yardney “Jim Rohn taught me that neglect is like an infection.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

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As we move through 2021, we’re still getting regular reminders that even though life is more normal, the effects of Coronavirus will be with us for a long time. While some people are still looking back in the rear vision mirror to see what lessons we can learn to give us some guidance for the year ahead, today I’ll be looking forward into the future as I chat with leading demographer Simon Kuesetenmacher about what he calls the Big Shift – some major demographic changes that you should be aware of if you’re interested in the property or if you’re in business But first, let me give you a couple of quick lessons from 2020 to help you take better advantage of our property markets. Timing the market is hard. Anyone who tried to time the top or the bottom of our property market over the decades I’ve been investing has usually missed out, so I would suggest spending your efforts finding the best asset you can rather than trying to time the market. Don’t try and fight the RBA or our government.If you think about it, it’s a government job to look after its constituents and protect them – not just by providing police and hospitals and the judicial system; but also protecting their jobs and the value of their biggest asset - their home. Economic depressions can be avoided. Our regulators have learned a lot over the last couple of decades and 2020 proved it - a rapid, large and well-targeted economic policy response can protect an economy from a significant shock and enable it to rebound quickly when the threat abates. Be careful who you listen to and turn down the noise. Last year investors were bombarded with information and opinions around what the coronavirus would mean to our economy and our property markets but much of this was just noise. Now that I have shared some of my lessons with you we are going to hear what Simon Kuestenmacher has to say, and even though we have discussed some of these concepts in previous podcasts, I’m sure you’ll get a lot out of my chat with him as he introduces some new concepts we haven’t discussed before that I think will help give you some clarity on what’s ahead. And as always, I will share my mindset message with you at the end of our show. There’s a big shift ahead for our property markets If you’re like many Australians you’re probably wondering what’s going to happen to life beyond coronavirus. What's going to change in the way we live, work, and organize our cities? The simple answer is... quite a lot! And if you're a property investor, or a business owner you must understand how Australian cities are reshaping to stay ahead of the game. That’s what I going to chat about today with Simon Kuestenmacher, one of Australia’s leading demographers as I ask him for some insights into what his research suggests is ahead. Simon is Director of Research at The Demographics Group, a columnist with The Australian, and a regular guest on this who is globally recognized as a rising star in the field of data management and insight and a regular guest here on my podcast. Just to put some context to our chat… It’s easy to forget that one year ago we have a government dedicated to balancing the budget and bringing in a surplus. Our property markets were rebounding, and business owners would looking forward to a great year ahead. Then look what happened in 2020 - we experienced a pandemic, a lockdown and a recession, and then a rebound. Fortunately, we controlled the health issues better than almost every other country in the world, and it seems that our government has minimized the impact of the coronavirus cocoon induced recession. But the dynamics of our society have changed considerably. So, what next?  Global context What’s happening in the world economy? Australia’s economy has recovered remarkably quickly International capital and international talent will still want to come to Australia Based on sheer economic data, investors might want to invest in Australia, New Zealand, S. Korea, and maybe Taiwan Local Context Lower population growth Some sectors of the economy are booming and others floundering Despite COVID & temporary low migration, the pie keeps growing in the 2020s. Demographics drive particularly high demand for family-sized homes. Low demand for small apartments before migration amps up again. COVID and working from home will reshape our cities. CBDs perform poorly for a few years; outer suburbs & regional towns benefit from millennial families seeking sizeable homes. Millennial values will transform suburbia. Expect more demand for active transport, hipster cafes, and family-friendly spaces. We will want future homes to be pandemic-proof The rise of the 20-minute Neighbourhood Pre-Corona Fried Egg – Post-Corona Scramble Egg Location is critical to the long term performance of your investment. It seems that in our new “Covid Normal” world, people love the thought that most of the things needed for a good life are within a 20-minute public transport trip, bike ride or walk from home. The ability to work, live, and play all within 20 minutes’ reach is the new gold standard desirable lifestyle. Imagine being able to carry out your daily activities within a 20-minute walk from home.  All the things you need in a day would be just a short walk away. Things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs. In urban planning circles, it’s a concept known as the 20-minute neighborhood. What type of property will be more in demand post-COVID-19? WFH will mean different desires – zoom room, gym, extra room for home office Some will see high rise apartment towers as “vertical cruise ships” - high-rise buildings were designed to organize as many people as possible in one place. With busy lifts, shared hallways, and communal facilities like laundries and garbage disposals, high-rise living is the ideal breeding ground for the virus, as we’ve seen both in Australia and overseas. So, it stands to reason that the buyers of 2021 and beyond might not be so keen to live in an apartment and be breathing the same air and touching the same lift buttons as hundreds of other people. Instead, they may prefer to purchase standalone dwellings that they can barricade and sanitize to their heart’s content in the event of another wave of the virus. Similarly, we’ll want to be able to separate work and living spaces. We all need a Zoom Room nowadays. I can only imagine what a nightmare the stay-at-home orders must have been for parents with small children living in apartments without a garden, or for gym junkies forced to substitute cans of baked beans for their usual weights in their at-home workouts. As such, room for a home gym setup, space for the kids to do their karate or dance classes online, and a reasonable outdoor area for the family to get some fresh air and vitamin D are likely going to shift from the “nice to have” category into the “non-negotiables” list for owner-occupiers. The hollowing out of the Australian workforce Education determines your income and spending capacity The increasingly polarized workforce drives property prices and geographical segregation. Low- and high-income workers demand similar things from their homes but are driven to different locations. That puts social cohesion at risk. Links and Resources: Michael Yardney Simon Kuestenmacher - Director of Research at The Demographics Group As our markets move forward why not get the team at Metropole to build you a personalized Strategic Property Plan – this will help both beginning and experienced investors. Shownotes plus more here: Successful property investors must understand this Big Shift, with Simon Kuestenmacher Some of our favourite quotes from the show: “How often have you heard me say over the last couple of years that you shouldn’t make 30-year investment decisions based on the last 30 minutes of news?” – Michael Yardney “Sections of our economy are doing pretty nicely, and it’s the demographics that are going to drive demand.” – Michael Yardney “Not one person said you should choose your work based on your desire for future earnings.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

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Success is no accident. The most successful people in life – whether in business, family life, music, or on the sports field – may not always seem like they have much in common. How are The Beatles similar to Steve Jobs? Or Warren Buffett and Shane Warne? But when their traits, habits and work ethics are distilled down, these unlikely characters share many similarities. You see, aside from the random element of luck, much of what makes some people successful involves the cultivating of certain habits. Learning what these habits are and how to employ them in your own life is worthwhile. So in this month’s Build a Business Not a Job podcast, I’m going to discuss 15 of the common success habits with Mark Creedon founder of Business Accelerator Mastermind. And if you’re not in business or planning to go in one, if you’re planning to be successful in your life, in your career, or as a property investor you’ll definitely be listeners And then I’m going to have a chat with Mark about his new book – Have a Business not a Job and I’ll get Mark to share 3 special tips or takeaways from his book you could start implementing straight away. Habits of Highly Successful People Capitalize on the time you’ve got. Time is your most valuable and scarcest resource. Successful people understand this and think in terms of minutes instead of days and weeks. They understand the true value of their time and manage their priorities accordingly. Understand what the most important task is that you have to do in your day. Lock that in and schedule time to work on that task first. Control your inbox. Schedule meetings as a last resort and make sure that you have a clear time frame. There’s no sense in having a meeting just to have a meeting. Say “no” to more things. Business owners appreciate input from workers who know how to prioritize immediate goals. 80 percent of your results will come from 20% of your activities, so slow down and take stock of your activities and what actually is getting results. Consider batching your work. If you can do something quickly, get it out of the way. Do it, delegate it, or delete it. Know the rules of delegation. Set aside time to journal. It allows clarity of thought and the opportunity to take stock for a moment. Look after yourself, your body, your energy, and your focus. It’s not a constant marathon, try taking the time in sprints instead. Takeaways from Mark’s Book The book was designed for people who were just getting started in their business journey and to help them overcome some of the hurdles. Or for people who own a business that they have to work all the time (so it’s still a job.) Some of the major things readers will take away from the book include: Understanding that time is the most precious commodity that they have, so they’ll understand how to make better use of it. Understanding that the people around you are your most important asset. Tapping into what the true product is that you’re selling. Links and Resources: Why not join Metropole’s Business Accelerator Mastermind Learn more about Mark Creedon – Business Coach to some of Australia’s leading entrepreneurs  Get a copy of Mark’s new book here – Have a business not a job Shownotes plus more here: The 12 habits of highly successful people you should also practice with Mark Creedon | Build a Business, Not a Job Podcast Some of our favourite quotes from the show: “Most people work on other people’s most important task first.” – Michael Yardney “Every time you put something on your list, you’re actually saying “no” to something else.” – Michael Yardney “Clients really seem to want a straight answer, take away my problems, help me by protecting me.” –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

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Property values can’t keep rising! It’s all a Ponzi scheme and is going to come crashing down around us! The only reason our property markets have survived COVID-19 is because of bank and government support. That’s some of the commentary you’ll find in the media and over the Internet at present and on the other hand you’ll find many experienced property commentators saying we’re at the beginning of a new property cycle, one where property values will rise considerably. Who is right? Can property values keep rising, and can they rise as much as they have over the last three or four decades? That’s the question Stuart Wemyss and I discuss today as we explain the various factors that created the significant property price growth over the last couple of decades. However, looking forward many of those growth drivers won’t be the same. So what’s ahead for property values? That’s what we going to discuss so welcome to today’s show. Will property values continue to rise? As we enter the beginning of a new property cycle some people are asking can property prices continue to rise at the same rate at which they have over the last three or four decades? In fact, some people asking can property values keep going up at all considering how expensive they are today? I know that’s a question that has been asked of Stuart Wemyss, an independent financial adviser and author because he’s written recently written a blog outlining his thoughts, so I look forward to hearing how he would answer these questions. Some of the topics Stuart and I discuss In Stuart’s blog he had a graphic showing what happened to house prices over the last five decades from 1970 to 2020. Now I know I bought my first investment property in the early 1970s, paying $18,000 and I got $12 a week rent and I was excited. $18,000 was a lot of money in those days when the family car was a Holden Kingswood and cost $2000; so I guess one of the first things we have to do when looking at house prices is see how they performed after inflation. Property has always been expensive. It seemed like a lot of money in the 70s because it was a lot of money in the 70s. You need to take a longer-term view to understand how property prices have occurred. But no, property prices can’t keep growing at the same level. Over the last 40 years, there has been population growth along with the rise of 2-income households. Some properties won’t increase in value, but others will and some will perform better than others. It’s important to look at real price growth, ignoring inflation. The bigger impact population growth has with investment-grade property is overall economic activity. Established money areas are liable to do better over the next 2 years or so. Borrowing capacity not likely to increase, interest rates not likely to decrease because they’re already low. You want a property that will appeal to someone whose income is rising faster than the general population People from the work from home movement will want to live where things are, not out in areas where there’s nothing around. Links and Resources: Stuart Wemyss’ blog mentioned in this show – Property prices cannot keep rising at the same rate Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan – click here and have a chat with us Stuart Wemyss – Prosolution Private Clients Stuart’s Book – Rules of the Lending Game Shownotes plus more here: Property prices can’t keep rising at the same rate they used to; with Stuart Wemyss Some of our favorite quotes from the show: “It’s real, after inflation, growth that’s important.” – Michael Yardney “There are more of us (Australians’s), but we’re also wealthier. We’re earning more.” – Michael Yardney “As always, demographics is going to be very important moving forward.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

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Have you ever wondered how certain people become so rich and successful? Well, if you’ve been listening to my podcast or reading my blogs and my books, you’d know that rich people don’t become rich by luck or by accident. Becoming rich requires hard work, dedication, and a certain set of habits. We are what we repeatedly do. That means excellence isn’t an act, it’s a habit. My friend Tom Corley spent five years studying millionaires and gathering insights that become the basis of his blogs and books, including the book we co-authored: Rich Habits, Poor Habits. He found that people who became wealthy practiced certain habits, and that’s what we’re going to discuss today. Since there are so many habits, we’re going to break this into a two-part series, and today we’re going to start with the first group of habits that the rich do that differentiate them from the average person. Rich Habits Of course, not all rich people are successful, and not all successful people are rich; but remember I was much younger and more naïve then and wanted it all. So I tried to understand why some people were rich while others kept struggling financially. Over the years I attended many seminars, paid mentors, and read as many books as I could on the topic of success. I modelled successful people and eventually grew successful myself. It wasn’t easy, I’ve had my challenges in life (mostly self-inflicted) and I’ve hit rock-bottom, but I got up again, learned from my mistakes, and moved forward. And over the years I’ve mentored more than 3,000 successful (and some not so successful) investors, business people, and entrepreneurs. In fact, a by-product of this is our top-selling book – Rich habits Poor Habits In it, Tom Corley and I explain… Being rich has little to do with the money itself Instead, it has a lot to do with how you think about money. So if you want to become rich, one of the first steps is to know how the wealthy think about money differently than you do and to start thinking like them. The next step is to take action and to let the action become natural by thinking the way wealthy people think. We’ve found rich people share similar habits. While we explain this in some detail in our book, today I’d like to briefly share… The first of the 21 Success Habits of The Rich …. The average person thinks about spending their money, while the rich think about how to invest their money. The average person worries about running out of money while the rich think about how to use their money to make more money. Most people believe hard work makes you rich, while the rich know that leverage creates wealth. Successful people don’t procrastinate. They don’t spend their life waiting for the ‘right time’ or waiting until they know it all or have figured everything out. The average person believes having a job gives them security. The rich know there’s no such thing as “job security.” Most people want to be rich. The rich are committed to being rich. (They are very different things.) When things go wrong, the rich find a lesson, while others only see a problem. The average Australian sets their financial expectation low, so they’re never disappointed. On the other hand, the rich set their financial expectations high so they’re always excited. Successful people take calculated risks – financial, emotional, professional, psychological. But once they’ve built their wealth, they take fewer risks.  The rich consciously and methodically create their own success, while others hope success will find them. The rich look for and find opportunities where others see obstacles. The average person believes life happens to them. They are a passenger, while the Rich believe that they create their own destiny. They are the pilot of their lives.   Successful people align themselves with like-minded people. They understand the importance of being part of a team. They create win-win relationships. Links and Resources: Tom Corley - Rich Habits Michael Yardney - Metropole Get your own copy of our international bestseller Rich Habits Poor Habits Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: Learn These Rich Habits of Successful People | Rich Habits, Poor Habits Podcast, Part 1 with Tom Corley Some of our favourite quotes from the show: “As you’ll learn, it’s not your fault if you’re born poor. But it is your fault if you die poor.” – Michael Yardney “It depends what your focus is as to what you see.” – Michael Yardney “2020 taught us the importance of that. How many people who had multiple income streams – such as you, such as me – still had a really good year, while those who were dependent on one income stream, unfortunately, found that dried up.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

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How do you evaluate the investment potential of a particular property? Well, that’s what I’m going to share with you today as we I share 5 metrics that we use at Metropole when discussing the investment potential of properties that we’re considering showing to our clients. But I’m also going to share 1 metric that you probably think is important, but we think is very misleading. In assessing a property’s investment potential, we have a checklist of more than 100 metrics. I’m only going to share 5 with you today. But they’re going to give you a good balance of the science and art of property investing. If you don’t understand what that means, you’ll understand a lot better after today’s show. Then, as always, I’m going to share today’s mindset message with you. Here are 5 numbers you can use to assess a property's investment potential and one you shouldn’t When it comes to the numbers (scientific) component, I see many investors get swamped by the seemingly endless numbers that can potentially paralyse them into inaction. In reality, you don’t need to know one million things; you just need to understand a few critical metrics. While this list is not exhaustive, here are a number of metrics the team at Metropole uses to assess the investment potential of a property. Past sales history We look at past capital growth to give us an indication of future growth potential. You probably know that one of the rules in Metropole’s Six Stranded Strategic Approach is buying in an area that has a long history of strong capital growth and one that will continue to outperform the averages because of the demographics in the area. Once we’ve confirmed the quality of the location, we need to drill deeper into the property itself. And the best way to gauge its growth potential is to back-track its past performance by getting the history of at least two previous sales (if possible.) This is where a seasoned buyer’s agent with intimate local market knowledge can be worth their weight in gold. Days on market Days on Market (DOM) is a measure of how long it takes to sell a typical property in a particular suburb, and more important than the actual number is the trend which provides context. Clearly, when demand is high and there are more buyers than properties available, the days on market will decrease. On the other hand, when the market is soft because of economic conditions, perhaps, or because of a flood of new properties becoming available, then time on market will increase, which will drive down prices. This statistic helps investors to identify those locations that are strengthening so they can buy before the masses and therefore make the most of the price uplift as the time on market decreases. Depth of Market What we’re looking for here is an assessment of the supply vs demand balance within a particular market. This is a measure of how long it would take for the current inventory (number of properties on the market) to be absorbed completely (purchased) based on the current rate of monthly sales, assuming there is no more new inventory being added to the market. A market is considered to be balanced if it has between 5 to 7 months’ worth of inventory (properties for sale.) If hypothetically all the stock on market (inventory of properties) in less than 5 months that implies there is great market depth – lots of buyers waiting in line, with an inventory turnover of more than 8 months implies an oversupplied market with little depth of buyers. Ratio of owner-occupiers to renters While many beginning investors have their prospective tenant top of mind, an important strand of Metropole’s Six Stranded Strategic Approach is to only buy properties with owner-occupier appeal. Since owner-occupiers own 70% of Australian properties they “make the market” and add stability to property values in those suburbs where there is a predominance of established owner-occupiers who bought their homes many years ago and have significant equity in their properties. This is very different from the instability and volatility we see in house prices in areas dominated by investors - think the inner-city apartment market or the other suburbs where there is little scarcity and many first home buyers have over-committed themselves and have a little equity in their homes. Above average wages growth Since property investment is a game of finance with some houses thrown in the middle, it’s important to find locations where the local residents have higher disposable income than average and suburbs where wages are growing faster than the state averages; as in these locations people will be able to afford to, and usually be prepared to, pay more to buy new homes or upgrade their homes. You’ll often find these suburbs are going through gentrification - a change in the fortunes of the suburb as it is discovered by a higher income demographic, which slowly pushes out the lower-income residents. Be careful relying too heavily on the data There is no doubt that it’s important to understand the property fundamentals and research property data, and the longer back the data research goes the more accurate the data is likely to be in forecasting future trends. But let's be frank -- you can make data say almost anything you want. I've seen too many property investors find a property that they like, one they become emotionally attached to, and then find the data to confirm their decision. That's called "confirmation bias” - they're using data backward rather than in the right way. What I'm getting at is that while you need the data in the research phase of your investment journey, to be a successful property investor you need much more – you need on-the-ground experience and perspective. Don’t get me wrong, doing your research is a critical step in getting ready to invest, but it is only one of the many important steps. There is no substitute for practical, on the ground experience. One commonly quoted metric that a lot of people investors look at, which we tend to ignore Median price data, which is the most common data reported in the media (other than auction clearance rates) and researched by property pundits, is actually very unreliable and can lead to costly investment mistakes. So here are 5 things you need to understand before you draw any conclusions from the regularly reported changes in median prices: How is the median price calculated? The median house price is essentially the sale price of the middle home in a list of sales where the sales are arranged in order from lowest to highest price. So in a list of 11 sales, it would be the sale price of house number 6, which has 5 lower-priced sales below it and 5 higher-priced sales above it. This is different from the average, which would be the total value of all the house sales, divided by the number of homes sold. A change in the median price does not necessarily mean a change in your property’s value While median prices are a useful tool for understanding the price changes of properties that have transacted in a market, a 10% increase does not necessarily mean that your property is worth 10% more.  In fact, your property could have dropped in value during this time. What it does reflect, however, is activity in the market. Median prices are a more valuable indicator in some areas than in others Changes in median price statistics are more meaningful in determining property price growth in some areas than others.  For instance, suburbs where the properties are largely homogenous and therefore of similar pricing are likely to see the median price as a more accurate reflection of true value changes. Different data providers measure different statistics Ever wondered why different data providers’ median prices are different? That’s because there are three key differences between all the providers. The data they collect, The time frames they report on – daily, monthly or quarterly The accuracy/complexity of the index methodology they rely on. Statistics are more reliable if looked at over the long term Investors should pay less attention to short term trends and understand that median prices (as with all statistics) are more useful when viewed as a change in trend over a longer time frame and not at over a month-to-month period. This helps you get a better understanding of an area's performance. Median prices are really best used as an indication of the composition of sales rather than a good indicator of changing property values. The bottom line In summary, understanding these 5 metrics will give you a head start in analyzing the investment potential of any given property. However, just like any other parameter in the property market, the numbers may not mean much on their own and there is a risk of drawing a wrong conclusion from them if you do not have intimate hyperlocal market knowledge. That’s because, as I said, successful property investing is part science (understanding the data) and part art (having on the ground perspective to interpret the data correctly.) Perspective comes at a cost - the cost of time, experience, and learning from your mistakes. You can't buy perspective, but you can "hire it” by working with an independent property investment adviser, like the team at Metropole to ensure your property selections are the best they can be every single time. Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: 5 metrics you can use to assess a property’s investment potential and one you shouldn’t Some of our favourite quotes from the show: “While past performance is obviously not a guarantee of future performance, the basic fundamentals of a location or a property don’t change.” – Michael Yardney “I’ve found owner-occupiers buy with their hearts and not their calculators and they tend to happily pay an emotional premium if there is something unique about the p

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No one expects 2021 to be the same type of rollercoaster ride as 2020. And while there’s plenty of good news for our economy and our property markets, it’s important to remember that considerable uncertainty remains and the extreme dislocation to many businesses over the past year will take time to resolve. Now the general optimism is well-founded. We seem to have this virus “thingy” under control, around 90% of the jobs lost during the pandemic have now been restored – and that’s a tremendous achievement and our property markets are rebounding. Australia and the world also stand on the cusp of the biggest vaccination rollout in human history, which will only increase the rising levels of consumer and business confidence we’re experiencing. Sure, the COVID rollercoaster may be slowing, but we still face a bumpy road to economic recovery and that’s what I’m going to discuss in today’s show with Pete Wargent as well as giving you five of my predictions for our property markets in 2021. Then I’ll share my mindset message with you. 2021 Property Trends It seems that everybody has been making predictions for our housing markets for 2021 and they’re all extremely positive. While on the one hand I love to hear this, on the other hand I’m always concerned when everybody thinks the market is going to perform in a particular way as we have seen how wrong consensus opinion has been over the last few years. So in today’s show I share 5 property trends that I think will occur in 2021 and I’m looking forward to Pete Wargent’s view on these, plus we’ll discuss some economic trends that will influence our property markets. Property demand from home buyers is going to continue to be strong. One of the leading indicators I watch carefully is finance housing approvals, and these are at record levels suggesting that we will have strong demand from owner occupiers and investors in the first half of this year. Despite the “recession we made ourselves have”, rising unemployment, and many small businesses facing challenges, interest in buying residential property has skyrocketed. This has come particularly from owner occupiers who have amassed household savings at levels not seen since the mid 1970s, and this is in part because they have not been able to spend their money on vacations or even local entertainment as they normally would. Now, with borrowing costs lower than they ever have been, the reassurance that interest rates won’t rise for at least 3 years and increasing confidence that we’ve got this virus thing under control, it is likely that buyer demand will remain strong throughout the year. Investors will squeeze out first home buyers While currently there are many first-time buyers (FHB’s) in the market, buoyed by the many incentives being offered to them, I can see demand from first homebuyers fading as property values rise from increasing competition as investors re-enter the market. You see…typically investors compete for similar properties to FHB’s. Property Prices will continue to rise As always, there are multiple real estate markets around Australia, but in general property values should increase strongly throughout 2021. However certain segments of the market will still continue to suffer, in particular in the city apartment towers and accommodation around universities. It is unlikely the segments of the market will pick up for some time and the value of these apartments is likely to continue to fall as there just won’t be buyers for secondary properties. At the same time some rental market will remain challenged. In particular the inner-city apartment markets which are reliant on students, tourists (AirBNB) and overseas arrivals. People will pay a premium to be in the right neighbourhood. If Coronavirus taught us anything, it was the importance of living in the right type of property in the right neighbourhood. In our new “Covid Normal” world, people will pay a premium for the ability to work, live and play within a 20-minute drive, bike ride or walk from home. Residents of these neighbourhoods have now come to appreciate the ability to be out and about on the street socialising, supporting local businesses, being involved with local schools, enjoying local parks. We will not fall off the fiscal cliff in March Some commentators are concerned that we will fall off the fiscal cliff when JobKeeper and the mortgage deferral system end in March. I can’t see the government allowing this to happen after having put so much time effort and money into “building a bridge to get us across the other side” as Prime Minister Scott Morrison promised. In fact APRA (the Australian Prudential Regulatory Authority) released data showing Households and small businesses are now paying back more than 80 per cent of the almost $250billion in loans deferred at the height of the coronavirus pandemic. This is just another sign that the national economic recovery is on track and we won't fall off a fiscal cliff in March as some of those Doomsayers were predicting. The reduction in our banks’ exposure to loans that may default puts them in a stronger position to continue lending and support of the economic recovery by lending to homeowners, investors and businesses. Now, let’s talk about the number of the influences that will help influence our economy and our property markets in 2021 The IMF now expects global GDP to grow5% in 2021, Huge fiscal spending worldwide plus unbelievably low interest rates plus vaccinations will stimulate economies Australia’s projected growth ranges from 4.5% to 5%, which is huge compared to our usual growth rates. In the past we were excited if Australia had 2-3% growth! Unemployment fell and jobs are being created Interest rates are low and likely to remain so for three years, even though some people are suggesting this may not occur if our property markets keep rising InflationThis year has started with a bit of an inflation scare and US and Australian headline CPI inflation measures look like rising to around 3.5-4% over the year to the June quarter as last year’s June quarter price slump drops out of annual calculations and higher commodity prices feed through. Core and underlying inflation measures will remain the main focus of central banks and right now they are well below target in the US, Europe, Japan and China as is the RBA’s preferred measure of underlying inflation in Australia at 1.2% year on year.  Consumer and business confidence is rising Some concerns: China will be a problem, but the fact that we’re not travelling overseas means we are spending $69 billion locally instead Whether rising house prices cause because Apra or the RBA to interfere Links and Resources: Michael Yardney Metropole’s Strategic Property Plan – to help both beginning and experienced investors Pete Wargent – Next Level Wealth Pete Wargent’s new book Low Rates High Returns Shownotes plus more here: Here's why I'm excited about 2021 - What the next 12 months has in store with Pete Wargent Some of our favourite quotes from the show: “I’m optimistic about our future, but this year we’re going to require optimism balanced with realism because that’s what gives us resilience. – Michael Yardney “We’re not going to have a cliff. We may not even have much of a step in March.” – Michael Yardney “One of the things that happens after every downturn is a flight to quality.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

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Would you like to know where the property hotspots are going to be as Australia enters some semblance of normality in 2021? Or maybe you’d like to know exactly where property values are going to end up at the end of this year. Now I know that’s what a lot of the other podcasts are currently offering you, so I’m sorry if I’m going to disappoint you, but I’m not going to make any short-term predictions. You only have to look back 12 months to see how all those short-term forecasts worked out, or even further back to the beginning of 2019 and again see how incorrect those predictions were. On the other hand, it’s much easier to tell you what the value of well-located investment-grade properties will be in 10 years’ time.  But that’s not as sexy, is it? The problem is many investors take a short-term approach to real estate which is really a long-term investment. They try and make a quick profit such as buying cheaply, or looking for the next hotspot, which is a short-term approach, and then wonder what to do next; rather than taking the long-term approach of owning the best asset they can which will give them long-term compounding growth and in time produce substantial wealth. In today’s show we are going to continue on the discussion I started last week with Stuart Wemyss and work through his 8 fundamental rules for property investment. These will serve you much better than learning where the next hotspot is going to be because as you know, this year’s hotspot will become next year is a not-spot. When you understand these fundamentals and use them to formulate your investment decisions, you’ll be ahead of the game and be in that small group of investors who builds a multi-million-dollar property portfolio, rather than in that large group of 1.9 million Australian investors who never gets past their first or second property. If you haven’t heard last week’s show, please listen to that after you’ve heard this episode – the order in which you listen won’t matter - just go to The Michael Yardney Podcast on whichever player you use to listen to the podcast because the two shows are complimentary – there was just too much information to pack into one show. And while you are there, if you don’t already subscribe, please subscribe to this show so you keep up to date as we enter an interesting year ahead. Once you’ve listened to these two episodes, I believe you’ll be in a much better position to take advantage of the changing property market in 2021 as you understand Stuart Wemyss’s eight rules of property investment. The Golden Rules That We Discuss This Week: Golden Rule 5: Set your asset allocation to reduce risk and maximize return Understand that you can’t predict what’s going to happen in the short term. Invest in a combination of assets that diversify outcomes. Be realistic about what long-term returns are going to be. Golden Rule 6: Invest in the share market using low-cost passive investments Two types of approaches: active fund management and passive management. Golden Rule 7: Only invest in ‘investment-grade’ property Three characteristics of an investment-grade property: Strong land/value component Have scarcity in terms of location and in terms of architectural style or building type Proven performance Golden Rule 8: Protect your investments from expected and unexpected risks Plan for the worst and hope for the best. Make sure that you have the right insurance, including income protection insurance. You need to put a will together. You need access to several year’s worth of living expenses. A finance strategist can help you put the appropriate buffers in place. Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Stuart Wemyss – Prosolution Private Clients Stuart’s Book – Investopoly Shownotes plus more here: 8 Golden Rules for building wealth in this new property cycle – Part 2, With Stuart Wemyss Some of our favourite quotes from the show: “Property’s lumpy, so it’s not easy to buy a property every six months or every six years.” – Michael Yardney “Investing is meant to be boring, to give you the wherewithal to make the rest of your life fun.” – Michael Yardney “The first rule summarizes it all, also. Invest for the long-term. Understand the long-term rules. Don’t invest for the latest hotspot.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how