Property Investment, Success & Money | The Michael Yardney Podcast

If you invest in residential property, how can you be sure that it’s going to work out for you? That’s what we discussed in today’s show, because if you’re going to borrow money to invest and take on the risk of investment you need to ensure that you’re going to get wealth-producing rates of return, not just during this boom, but over the long term. Today I’m chat with Brett Warren and we give you some insights to ensure you make the most of this property cycle. To increase the probability of being a successful investor, or put it differently, to reduce the risk of being unsuccessful and ending up with only one or two properties like 92% of those you get into property investment do, you need to focus your energy on only investing in quality assets. Drivers of this boom: Low-interest rates leading to people upgrading, which creates demand Tenants upgrading to be owner occupies – first homebuyers established homeowners upgrading to better accommodation other homeowners upgrading their lifestyle to 20-minute neighborhoods or regional locations baby boomers upgrading their lifestyle moving to family-friendly apartments or townhouses rising consumer confidence pent-up demand supply versus demand demographic changes Millennials moving to family formation stage how and where we want to live – Home versus an apartment, the right neighborhoods. infrastructure improvements What’s going to happen in 3 or 5 years? Property values will have risen significantly – in many cases 25 to 30% over this cycle. The economy will rebound Wages and inflation will rise The RBA will push up interest rates just a little. Property will become unaffordable for many Australians The gap between the rich and the poor average Australian will keep increasing. You have to ensure you own the right property, yet FOMO means many investors are making poor investment decisions currently and will lose out in the future. Locations where you could invest. The “established money” suburbs, where many established owner-occupiers have limited debt The aspirational suburbs that are gentrifying – where there are high-income earning Millenials The outer, cheaper, less affluent suburbs which are unlikely to gentrify in the medium term as that’s not where the wealthier people want to move into and live.  (Avoid these.) The problem is during this current property boom, almost all properties are increasing in value, so people who have bought the wrong properties will still think they’re doing well. They won’t realise their mistakes until they wake up in 5- or 10-years’ time and realise the huge opportunity cost – what they have lost out on -  because of owning the wrong property is in the wrong locations What Happens Next? Property prices will not continue to rise at such a rapid rate. As a part of any normal property cycle, there will also be a downturn in our property markets. But in a rising market and in the heat of the moment, this can often be forgotten. In Summary The current market tide will certainly lift our property market causing prices to rise. Some investors buying on a whim and with emotion buy into this and think that any property will likely do well in the short term. They do very little research and give into confirmation bias These investors do not understand that they are likely making a medium to long-term decision based on only the short-term outlook, instead of making the decision that will move them closer to their longer-term goal. Understanding their reason for investing and then understanding longer-term fundamental data should be a priority. Following a process is critical otherwise, you may be caught swimming naked once the tide goes out. Resources: Michael Yardney Brett Warren – National Director Metropole Property Strategists Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a bundle of free eBooks and reports at www.PodcastBonus.com.au Shownotes plus more here: This is no ordinary property boom, where will you be when it ends With Brett Warren Some of our favorite quotes from the show: “In my mind, the intensity of this boom is a once in a generational opportunity, and it’s not too late to get into the cycle.” – Michael Yardney “Buying the right property now is not only going to help build your asset base but should set you up correctly to establish intergenerational wealth.” – Michael Yardney “Successful people have a long term perspective. They have the ability to work hard to accomplish something which isn’t achieved for a long time.” – 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  

Are we heading for the biggest crash since the Great Depression? Is it just around the corner? Well according to Harry Dent, we are and it is. He is telling anyone who is prepared to listen that we are heading for a stock market crash, and the value of your house will drop by up to 40%. Today I to chat with economist Harry Dent about his views, and then Pete Wargent and I give you our thoughts on what’s ahead. Now a word of warning before we get into the interview,  especially for the faint hearted. There are some scary predictions made by Harry, so please listen to his whole interview and don’t sell up your assets before you have my views and those of Pete Wargent. Subjects I Discussed with Harry Dent Harry is a Harvard MBA graduate, a Fortune 100 consultant, and his demographics-based approach to economic forecasting has helped him correctly predict many major economic events, including Japan’s 1989 economic collapse, the 2000 dot-com bust, and the populist wave enabling Brexit and Donald Trump’s election. Harry believes that an economic winter is coming that will be worse than the Great Depression. He believes that the governments are using stimulus to keep economies alive, and that this is bound to not end well. Harry’s biggest surprise about COVID was how much the governments stepped up and created stimulus. He believes that the biggest sign of problems in the US is that the home sales are going down while housing prices go up. He believes that rates are artificially low because governments are printing money out of nowhere and using it to do things like buy bonds. His line in the sand is 2022, which is when he believes the lowest point will occur. Harry says that hitting the limits wall cause the bubble to explode. He says that China has the biggest bubble, and because they’re Australia’s biggest export, their bubble bursting will hurt Australia. Harry believes that Australians who think he doesn’t understand Australia’s markets just don’t understand the world. He would advise people to reassess their assets and sell what they don’t need. Harry explains that the upside of a burst bubble is that it will get rid of bad companies being artificially propped up and make way for new ones. Harry also discusses how he would explain his views to someone who visited his seminars and did what he suggested years ago but didn’t see it work out for them. Bursting the Bubble with Pete Wargent According to Pete Wargent, we’re not in a bubble, and there isn’t necessarily a big explosion coming Australia is seeing record-low mortgage rates A typical response to low mortgage rates is more people getting into the housing game. More people getting into the housing game is basically what is happening right now. The current housing market is underpinned more by owner-occupiers than investors This makes a bubble less likely. Australia’s government has been prudent, and there are not high levels of government debt. What’s more, the interest rates are low. Australia’s banking system is sound. The majority of the debt is in the hands of people who have the means to service it. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Harry Dent’s newsletter: www.HarryDent.com Pete Wargent  Next Level Wealth  Pete Wargent’s new book Low Rates High Returns Shownotes plus more here: Harry Dent says Australia’s property bubble will burst, but Pete Wargent bursts his bubble Some of our favourite quotes from the show: “As an investor, I believe it’s important to listen to others views.” – Michael Yardney “In my mind, a bubble is an economic cycle characterized by a rapid escalation in asset values, then it’s followed by contraction.” – Michael Yardney “From what I can see, the debt that’s out there is in the hands of people who can manage it.” – 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  

I hope you’re taking advantage of the current property boom. I haven’t seen conditions like this since the early 1970s when I first started investing. Now you won’t find charts of that particular boom in the various research house statistics, because they weren’t keeping those types of records in those days. Back then, the boom in property values was in part related to the very strong inflation we were experiencing, and at the time the booming markets of the early 70s and that of the late 80s and the boom of the early 2000’s twenty years ago created a lot of Real Estate empires. I know the boom of the 70’s got me off to a great start and the subsequent booms grew the value of my portfolio allowing me to continue growing it, but I also know there were others who invested through the various property booms who haven’t had the success they hoped for. Even though initially it seems they were heading in the right direction. So, my chat with you today will be to help you understand the type of property that you should be buying at this stage of the cycle to take advantage of the current conditions that see you through for the rest of your investing life. Today’s podcast will be in two parts, I’ll initially give you my thoughts and then I’ll have a chat with independent financial strategist financial adviser Stuart Wemyss who will share his thoughts on a big mistake he’s seeing investors make – in the hope that you don’t make the same mistake. Here’s how to invest in our booming property markets I’m continually being asked questions like: What’s the right property for this stage of the property cycle? Is this the right or wrong time to invest in property? Is it too late to invest this time round – prices have grown so much? Where’s the best place to invest in 2021? First, let's take a look at what is happening. What’s driving Australia’s property boom? Low interest rates – Low interest rates are facilitating change from all types of prospective property buyers, many of who are starting to experience FOMO (fear of missing out) and are pushing prices higher and higher. Rising consumer confidence -- The combination of improving economic conditions, increased jobs security plus the sense that we’re getting Covid under control is lifting consumer confidence, which in turn has created continued strong demand for housing. Supply versus demand – Buyers are snapping up properties faster than vendors can list them for sale at present which puts further pressure on prices. Pent-up demand – Buyer demand is particularly strong at the moment because it has been pent up for a number of years. Demographic changes – Changes in demographics, the structure of family life, and what we want out of our home also shifted during the height of pandemic lockdowns. The desire to live in a 20-minute neighborhood shone through. Fast forward 3 years - what can we expect next? If we fast forward another 3 years or so, I expect we’ll find that property values have risen significantly - as much as 25-30% higher than at the beginning of this current property cycle. By then our economy will have rebounded even further, wages will have increased, and inflation will be starting to rise. This means the RBA will most likely have stepped in and raised interest rates, but only a little. Make way for a 2-tier property market When this property cycle ends, I believe we’ll be left with a 2-tier property market. This is because on one hand there will be the more affluent people who will be able to afford to live in the more expensive discretionary, established money suburbs or the up-and-coming gentrifying aspirational suburbs. On the other hand, we’ll have the majority of Australians who will find property unaffordable as they’ve only experienced slow or stagnant wage increases. This means moving forward we’re likely to find see a larger percentage of Australians unable to enter the property markets as owner-occupiers and those who can get a foot on the property ladder will be flung out further and further from the center of our capital cities.  The key takeaway is that if you want to ensure you end up owning the right type of property when this cycle comes to an end, you’ll have to make the right investment decisions today. So where should you invest? It will be important to invest in the type of locations where not only more affluent owner-occupiers live, but where more affluent tenants will want to live because they’ll be able to pay increasing rent over time. So I suggest investing in: The “established money” suburbs  This is where many owner-occupiers have been living for 20, 30, or even 40 years and have “old debt”, and in fact, minimal debt against their homes. The aspirational suburbs This is where higher-income earning millennials are moving to, with new money and in turn are upgrading, improving, and gentrifying these locations.  Don’t invest in outer suburbs Stuart recently wrote about why investing in outer suburbs is likely to lead to underperformance. Some buyers’ agents promote investing in more affordable locations (i.e. outer suburbs). I can understand why some investors might be attracted to follow their advice. But it’s not until you delve into the theory and evidence that it becomes blatantly obvious that such investments have a high probability of under-performing. Attractions of investing in the outer suburbs: The price point is a big attraction for some investors. That is, houses are substantially cheaper. That means that people can spread their eggs across multiple baskets i.e. invest in multiple properties. It also means that people that cannot afford a house in a capital city, can still “invest” in property. Secondly, because properties in outer locations tend to have a lower land value component (land is cheaper than the building), rental yields are higher. This makes property more affordable to hold, particularly while interest rates are so low. Investment weaknesses of outer-suburban locations: The first thing to recognize is that the supply and demand fundamentals are significantly different compared to blue-chip locations. The supply of vacant land in the surrounding locality is typically infinite. Whereas the demand for property reduces the further you move away from blue-chip suburbs. The second consideration is the tenant profile. Tenants in these locations are more likely to be lower-income earners. That can include young families, often with pets that create a lot of wear and tear on your property. Lastly, it is incredibly important to recognize the impact that increasing borrowing capacities have had on house prices over the past 3-4 decades, even in outer suburbs. The average Australian’s borrowing capacity has increased by 2 to 3 times since the early 1980s. Borrowing capacities have peaked. They will only rise in line with incomes. That means the buying power of low to middle-income earners will not increase by the same rate as it has over the past 30+ years. Putting aside affordability considerations, most people desire to live near the CBD (not in it but surrounding it). These locations tend to offer a greater array of employment opportunities and better amenities such as entertainment, schooling, medical and pastime activities. The richest 20% of Australian’s own 64% of all household wealth. And between 2003 and 2017 this top 20% grew their wealth by 68% (compared to 6% for the least wealthy 20%). It is this cohort of Australians that can afford to (and will) drive blue-chip property prices perpetually higher. Investment principles must never be compromised: It is probably tempting for some buyers’ agents to buy property at any price point. Because, of course, not everyone can afford to spend over $500k on an investment property. However, the only way you can do that is if you compromise sound investment principles. And that is a slippery slope and is a sure-fire way to make costly mistakes. 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 – Rules of the Lending Game Shownotes plus more here: The right and wrong things to do to secure your financial future through property, with Stuart Wemyss Some of our favourite quotes from the show: “While a rising tide may lift all ships, investing in the current market may not be as straightforward as you think.” – Michael Yardney “Buying the wrong property now not only affects your investment purchase today, but it will affect your capacity to create wealth over the next 5, 10, or 15 years.” – Michael Yardney “While you need cash flow to stay in the game, it’s really only capital growth that’s going to get you out of the rat race.” – 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  

What does the Uber Eats app have to do with the skills shortage? What does walking down the cereal aisle in the supermarket have to do with our economy and our property markets? In today’s show I chat with leading demographer Simon Kuestenmacher, who uses a number of food metaphors to help explain what’s happening in our economy, so if you’re a lover of food as I am, and more importantly if you’re interested in the property or business, I’m sure you’re going to get some great insights from my chat with Simon. I’ll also share a mindset moment about failure with you. Topics that Simon and I discuss: Australia is facing a skills shortage This is happening because of low immigration. Without overseas migration, the country doesn’t have enough workers to meet its needs Businesses “raided the pantry” by hiring from the pool of unemployed workers, but the pantry is nearly empty now Because skilled migrants aren’t available, full employment is near Even some long-term unemployed workers have returned to the workforce But some sectors, like tourism and hospitality, are still struggling to find enough workers Competition for workers may drive some wages up However, not all businesses will be able to afford to raise wages. And in some cases, wages might not be the reason they’re having trouble finding workers Australia needs to get to work on creating its own skilled workers to fill positions, since skilled migrants from overseas are unavailable This involves removing barriers to upskilling Companies will need to choose where they fall in the “cereal aisle” – expensive cereal on one side, cheaper brands on the other, and a basic brand square in the middle 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 personalised   Strategic Property Plan – this will help both beginning and experienced investors. Get a bundle of eBooks and reports www.PodcastBonus.com.au Shownotes plus more here: There’s no UberJobs app to solve the problem. It’s time to try something else with Simon Kuestenmacher Some of our favorite quotes from the show: “One of the ways one can have a better GDP and improve your economy is becoming more productive.” – Michael Yardney “We choose to target areas where there’s more skill level 1 and 2 workers, where there’s more established money suburbs because that’s the premium end of the Weet-Mix market.” – Michael Yardney “I think failing is overrated.” – 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

What’s a better investment in today’s market -  apartments or houses? That’s the topic of today’s show. Now I could give you a simple answer, but I thought it was better to help you understand the thought process behind my decision than give you an immediate answer. Of course, I’ll also be sharing my mindset message for today before the end of the show. So is it better to invest in a house or an apartment? The change to a new working and home life prompted by the COVID-19 pandemic, combined with a loss of confidence thanks to some shoddy high-rise apartment buildings during the last building boom has seen investors increasingly shy away from investing in apartments. It seems that more investors are now asking if apartments are still a good investment in the current market. Well… my response is… it depends. I remember times when apartments outperformed houses, but for the last decade or so house values have risen at more than twice the rate of units. And the current property boom widened what was already a sizeable difference in prices. Of course, historically apartments have been cheaper than houses but the gap in prices has grown particularly wide in the past year. Some apartments, especially family-friendly low-rise apartments in lifestyle neighborhoods have still performed well and are likely to remain in continuous strong demand. The Numbers of Apartment Living The 2016 Census of Population and Housing found that 10% (2,348,434) of all people in Australia spent Census night in an apartment. This meant that there was around one occupied apartment for every five occupied houses in Australia - compared with one to every seven, back in 1991. While the number of vacant rental listings has fallen significantly in Brisbane, Darwin, Perth, Adelaide, and Hobart over the past year, Sydney and Melbourne continue to bear the brunt of closed international borders that has left many inner-city apartments without tenants. Data from Domain showed Melbourne’s vacancy rate sat at 4.7 percent as of February 2021 — a massive spike from the same time last year when the vacancy rate was 1.6 percent. Choosing the right neighborhood Sure, last year offices were shut and lockdowns were in place but moving forward more of us are likely to continue working flexible rosters and working at home more than ever. This means gone are the days where our ‘home’ was simply the place we rest our heads and enjoy some downtime between work and our social lives – the coronavirus crisis has put an end to life as we once knew it. If you can leave your home and be in short 20-minute proximity – whether that is on public transport, bike ride or walk - to a great shopping strip, your favorite coffee shop, amenities, the beach, a great park, that’s the new gold standard of where people want to live. What matters in a home? And it’s not just the importance of neighborhood that has shifted Australians’ views. The legacy of the lockdowns and the work-from-home-movement have made many Australians reevaluate what exactly they want in the home itself. All of a sudden people were trying to find space to be able to work, study, and also relax all under one roof - and in many cases, this hasn’t gone well. Prior to COVID-19 more Australians were trading space for place and were embracing apartment living, trading their backyards for balconies and courtyards in inner-city locations. Now we want more space – a zoom room, a bigger yard, and a garage that can be converted to a gym. High rise apartments: The slums of the future It’s worth pointing out that while large well-located suburban medium-density apartments will make great investments increased substantially in value over the long term, many of the high-rise towers built in the last fifteen years will continue to underperform with poor, if any, capital growth in the foreseeable future. Of course, these cookie-cutter-style apartment blocks never made good investments. The sad reality is that today, in light of the many media reports of structural problems in some of these high-rise towers, there is a crisis of confidence. This sector of the property market has lost the trust of the buying public and confidence will take quite some time to restore as various stakeholders including state and local governments as well as the construction industry including building surveyors and certifiers scramble to shore up the building sector. Investors are shying away Historically, a significant volume of apartments were bought by local and overseas investors. But as I explained, now many of these investors are shying away from apartments, due to increasing concerns about vacancy rates, capital growth, and also because of COVID-19 related concerns. Highly-publicized failures and defects in high-rise apartments, such as the Opal Tower in Sydney, are also playing their part and dampening demand. But it’s important for investors to remember that not all apartments can be lumped into the same category. While many new homes are being constructed, the pipeline for new apartment complexes is very thin meaning when our borders eventually reopen and demand for apartments increases from the many new migrants and students returning to Australia, apartment prices will start increasing again as the cost of constructing new projects will be considerably higher than previous building costs. This will of course push up the price of new apartments and with it drag up the price of established apartments. Remember, property markets are cyclical In the short run, returns can be inconsistent, but it’s well documented that investment returns eventually revert to their long-term averages. That is, periods of below-average growth tend to be followed by periods of above-average growth and vice versa While houses outperformed apartments with regard to capital growth over the last decade, for the 10 years prior to that many well-located apartments grew in value as much as houses did. The fact the houses have displayed strong capital growth rates over the past 10 years due to appreciating land values, interestingly implies that apartments are currently intrinsically undervalued. But comparing apartments to houses is unfair Of course, if your budget allows you to buy a house or townhouse in an A-grade location, that’s first prize when considering an investment purchase, but our booming property markets mean that more and more investors will be unable to afford a house in an investment-grade location. Fact is, the rich are getting richer and they don’t want to travel further out and I believe the gap between values in our established inner suburban locations and the outer suburbs will only widen. Australia’s apartment market: The outlook In the short term…. Over the next year or two, it is likely that there will be less demand for apartments while first home buyers continue to prioritize houses and investors remain wary. In the long term…. Over the next 10 years, I think we’re going to see a shift in Australia’s apartment market and a much more substantial increase in capital growth. Why? While currently around 10% of our population living apartments, this is significantly lower than the percentage of people living in apartments in similar size western cities to Sydney and Melbourne, where it’s not unusual to find 20 to 30% of the population living in apartments. Then, in light of structural and building problems in recent years, the next round of apartments will cost significantly more to build as builders and surveyors will be forced to avoid cutting corners and risking further scrutiny. This will, in turn, push up new apartment prices and therefore values of good established apartments. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a range of my ebooks here: www.PodcastBonus.com.au  Shownotes plus more here: What makes a better investment in today’s market – a house or an apartment? Some of our favorite quotes from the show: “There’s not one property market, so we can’t even say there’s one apartment market.” – Michael Yardney “These days, the place people want to be is not near the CBD, but in lifestyle neighborhoods where all the amenities are close by.” – Michael Yardney “Watching a movie that excites you, inspires you, makes you laugh, takes you away to another place, that’s a good way of turning off your stress.” – 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

We’re well into the second half of 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. And despite the Covid concerns we’re experiencing, there’s plenty more growth to come. Clearly, buyers are still out in force – owner-occupiers, investors, and first home buyers – at a time when available supply is struggling to keep up, keeping pushes prices higher. While much of the commentary is about the micro factors – what’s happening on the ground in our property markets – I like to regularly get together with property commentator Pete Wargent in these Big Picture podcasts to look at the macroeconomic factors affecting our economy and the property markets to help give you some more clarity about what the future holds so you can make better investment and business decisions. Since we spoke last month Australia’s economic recovery has continued to unfold, more jobs have been created and our property markets keep surging. Australia’s Property markets All our capital cities have already experienced double-digit growth this year other than Perth. Homebuyers and property investors who took a long-term view have already enjoyed significant capital growth. The higher-end, more expensive end of the market is outperforming the cheaper end. Investors are back in the market. The pace of growth will slow but property values are likely to increase another 10% this calendar year. Rental growth is slowly starting to pick up as vacancy rates fall. Australia's households just keep getting richer. Australian household wealth grew more in the last year than it did during the preceding three years combined. Much of our wealth is due to ownership of property A new report from Credit Suisse estimates as many as 1.8 million Australians are millionaires today based on net household wealth (defined as the value of financial and real assets minus debts). And over 3 million Australian adults could soon be millionaires, according to the report. A lot has to do with property and super The RBA and interest rates Governor Philip Lowe’s announcement telling us that the economy is doing much better than previously forecast resulted in speculation that an interest rate increase may come sooner than expected Latest housing finance figures The value of new home lending has almost doubled since May last year. New home lending increased by 4.9% from the month prior and a whopping 95.4% or $15.90 billion from May 2020. While the value of owner-occupier lending only saw moderate month-on-month gains, investor lending has gone way up Investor lending has now hit the highest level since June 2015 with $9.13 billion of new loans in May, more than double the value in May last year when COVID was in its early stages. However, the investor surge comes at the cost of first home buyers, with the number of owner-occupier first home buyer loans dropping. While first home buyer numbers are down, the value of first home buyer lending is up, reflecting Australia’s rising property prices. Jobs The jobless rate has fallen to its pre-pandemic level of 5.1 percent after the creation of 115,000 jobs in May. The underutilization rate is the lowest since February 2013. With international borders shutting out foreign labor and fuelling skills shortages in some industries, job ads at a 12-year high, and jobs vacancies soaring, the local labor market could reach full employment sooner than expected. Population Australia's population increased by 136,300 people in 2020. This was the slowest population growth since ABS records began in 1982. There were 294,400 babies born in Australia last year, the fewest births in 13 years. And there were 161,400 deaths in the past year down by 3.4% over the previous year. Over the next 40 years, Australia’s population is expected to age and become smaller than expected. Resources: Michael Yardney Metropole’s Strategic Property Plan – to help both beginning and experienced investors Get your bundle of eBooks and reports here: www.PodcastBonus.com.au Join Michael’s Property Update private Facebook group by clicking here Pete Wargent  Next Level Wealth  Pete Wargent’s new book Low Rates High Returns Shownotes plus more here: The Big Picture | Economic & property trends you must understand – July. With Pete Wargent Some of our favourite quotes from the show: “The markets turned in October last year, and they’ve gone gangbusters ever since.” – Michael Yardney “We’ve never had as many first homebuyers, so housing is affordable. Maybe not right in the centre of Sydney or Melbourne, but there are still opportunities.” – Michael Yardney “I can see an employment rate with possibly even a 4 in front of it, 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

My special guest for today’s show is Robert Kiyosaki of Rich Dad Poor Dad fame. I spoke with Robert on my podcast last year at the beginning of Covid when he warned Australians about the challenges for our economy ahead and the opportunities that he felt would come at the other side of the downturn. Now I didn’t agree with everything he said, but I respect that he has taught not only me, but millions and millions of people about the basics of financial literacy, so I was keen to hear his opinions. Fortunately, Robert’s dire predictions didn’t come to pass, so I was pleased when he reached out to me again recently to be on my podcast so I could ask him what the biggest surprise was for him over the last 12 months. You’ll hear how Robert’s teachings challenge conventional thinking about money and he suggests that you should be doing what the 99% are not doing. You’ll hear Robert speak positively about Australia’s opportunities, but you may be shocked by some of his predictions of what will happen before these opportunities arise. As I said, I don’t agree with all of Robert’s thoughts, his ideas about real estate, and his forecasts for what’s ahead for the economy, but rather than debating him, I gave him the airtime he deserved, and then after our chat, I’ll share my views. So don’t panic if you hear some of Robert’s extreme thoughts, but please listen to the whole show including my thoughts, and then you’ll have both sides of the discussion argument to make your decisions on. My Chat with Robert Kiyosaki For many years Robert Kiyosaki has been one of the most respected voices in the world on growing wealth.  He is best known as the author of Rich Dad Poor Dad which is the #1 personal finance book of all time and Robert has challenged the way tens of millions of people around the world think about money. Some of the topics Robert and I discuss: Robert’s background and credentials What surprised Robert over the past 12 months He believes the United States is desperate and dumping money straight into the economy, rather than through the banking system Why real estate is Robert’s preferred investment vehicle He likes being able to use debt to buy real estate and lower tax obligations He believes that his concepts are applicable to Australia as well as the US because he’s made money in Australia using his concepts Robert’s investment philosophy hinges on self-education rather than trusting the government Robert’s explanation of his Cash Flow Quadrant The Quadrant uses the letters are “E”, “S”, “B” and “I”. “E” stands for Employee. “S” stands for Self- employed or Small business. “B” stands for Big Business and “I” stands for Investors. Why Robert believes that the world’s biggest financial crash is on the horizon He believes that we’re in a bubble because the US has been printing money instead of fixing mistakes He does not believe the bubble is likely to deflate slowly Robert believes that it’s difficult to know what will cause the bubble to burst, but that it will probably be something small added on to a pile-up of things He believes that Australians should not be complacent about their susceptibility to a bubble Robert also believes that a home is not an asset This is because he believes that assets bring in cash, while liabilities cost money, and a home costs money Robert will be doing a live event with Harry Dent while he will explain more about what he believes will happen and what opportunities will arise from it. My response to Robert’s thoughts In the show I give you an alternative view on 2 of Roberts assertions: What’s in store for our economy and His concept of what makes a good property investment. Property. Robert clearly knows a lot about United States Real Estate – where the rules are very different, the tax regime is very different, the markets are very different and the way to invest is very different to Australia. In fact, if I think about it the way I would invest in real estate in New Zealand is very different from how I would invest in Australia even though our countries and economies are more similar than Australia and the USA. Our property markets are underpinned by the fact the 10.6 million properties around Australia are in general owned by homeowners – in fact, 70% are owned by homeowners and half of these homeowners don’t have a mortgage against that property. And for the other half that do you have a mortgage, many of them are ahead in their payments while others are using the mortgage to support the purchases of investment properties. There is not a real property debt problem in Australia. How I see it is that the way you get income from your investment properties is in 4 ways. Capital Growth Rental returns tax benefits Accelerated/ manufactured growth. Unfortunately, too many people look for cash flow from their residential real estate investments in Australia and that’s just not how it works. Our economy When I spoke with Robert last year, he was concerned that Australia would fall into recession as with most countries around the world. And that prediction came true, but the recessions weren’t as deep voice disastrous as he expected because our governments have learned they can buy their way out of a recession by spending money. Australians perform better than most advanced economies and of course, we are still susceptible to coronavirus-induced problems and I won’t even discuss the potential geopolitical problems with China, but I see a number of reasons to be optimistic about the future. Global economic growth is recovering rapidly Australian consumers are going to keep spending. Fiscal stimulus will continue Monetary policy remains ultra-easy New migrants will flood into Australia when the borders open Your home as a stepping-stone In this new age of property investment, when interest rates are accommodatingly low and mortgages so cheap, present-day homeowners are actually sitting on a potential goldmine. Far from being a drain on the household coffers, many of us are taking the opportunity to reduce our mortgages faster, contributing extra to our continually shrinking monthly repayments. In turn, some property owners are building up equity at a considerable rate, with the help of the long-term appreciation of well-located property. Take select pockets of the Melbourne, Sydney, and Brisbane property markets for instance, where homeowners have enjoyed significant growth on their principal place of residence over the last few years without lifting a finger. Some of them are leveraging the hundreds of thousands of dollars worth of equity they’re literally sitting on (or in) to invest in further high growth assets, while others are cashing in on a rapidly moving rental market and erecting granny flats in the backyard to create quick (and lucrative) accommodation. Now more than ever, your home can and should be an integral part of your investment game plan. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Robert Kiyosaki’s Australian Virtual Event – www.robertandharry.com Shownotes plus more here: An eye-opening interview with Robert Kiyosaki – the economic shock ahead in 2021 Some of our favourite quotes from the show: “I think it’s important to not go forward with blinkers on, to listen to people with various opinions, especially from people who’ve got a track record.” –  Michael Yardney “Our property markets are underpinned by the fact the 10.6 million properties around Australia are in general owned by homeowners.” – Michael Yardney “First of all, it’s not just Australia – global economic growth is recovering rapidly.” – 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

One of the most difficult aspects of being a property investor comes from the fact that we have competing emotions depending on where you are in the property cycle. There’s fear and greed, overconfidence and loss aversion, panic and euphoria. We’re told there’s nothing more important than being disciplined when getting involved in property and investment, but it’s not easy when the emotions hang in there. One of them is fear of missing out, like a lot of people are currently experiencing as they feel the market is moving faster than they can get in. And there there’s fear of getting in, which a lot of people were experiencing last year when people were talking about property Armageddon. So today I have two segments: the first one a chat with property researcher John Lindeman and we have a little bit of a general chat about FOMO and what you should watch out for. Then I’ll share the ten FOMO mistakes I’m seeing many property investors make, to ensure that you don’t make them as well. So, today’s podcast will be useful for you whether you’re looking to get into property or you’re already in property anyway, because as we go through these things, there are a couple of great fundamentals and lessons I’d like you to know. Some of the Topics John Lindeman and I Chat About: FOMO is an emotionally based desire. We don’t want to miss out on something someone else has. It’s similar to greed. You have to respect the market. When things settle down, some people will find they bought the wrong property or overpaid. FOMO can move a boom to a bubble when too many investors become involved. That’s why it’s better to buy in areas that are mostly owner-occupiers. There will always be another opportunity, so buy with your head, not your heart. Big FOMO mistakes John Lindeman currently sees: Emotion that takes over decision-making. Finding it difficult to wait. Have rules that can help you rationally you decide which property to buy so that emotion doesn’t take over. 10 FOMO Mistakes Not really understanding the nature of the property cycle You need to remember that the property market always moves in cycles. So after a boom, you will see a downturn. Acting with heart and not head Allowing your emotions to cloud your judgment means you are more likely to over-capitalize on your purchase, rather than negotiating the best possible price and outcome for your investment goals. Diving in or Dithering FOMO causes some investors to act too impulsively, while others freeze up out of too much caution and never act at all. Not adhering to their property strategy Successful wealth creation through real estate requires you to set goals, determining where you want to end up, and then devising a cohesive plan to get there. Changing their investment strategy. If your aim is to gain financial freedom through property investment this is a critical time to stick to a proven strategy. Speculation over Patience Property investment is not a get-rich-quick scheme. Doing it successfully requires patience. Not having a finance strategy. Strategic property investors have a finance plan to allow them, not just to buy one property but the next and the next. Compromising on Location A property’s location will do 80% of the heavy lifting when it comes to capital growth, so don’t compromise on it. Taking advice from the wrong people You should take advice, but from proven experts, not just anyone with an opinion. Buying the wrong property Don’t make a snap decision on the wrong property. 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: Warning – Avoid these FOMO errors investors make in a hot property market; with John Lindeman Some of our favourite quotes from the show: “It’s owner-occupiers that basically create the markets, about 70% of purchases, and it’s investors who push it up to its heights - the booms, and even sometimes the bubbles and then also create the slumps” – Michael Yardney “Currently I’m seeing some buyers so worried the market is going to pass them by that they’re compromising their selection criteria just to get in the market.” – Michael Yardney “By approaching property investment with patience and persistence, you will gain far more success and wealth than if you seek out the next big thing.” – 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

You heard me say it before - property investment is a game of finance with some houses thrown in the middle. But the rules of the game are changing in front of our eyes, so today I’d like to explain what’s going on with lending, so you have a better chance of the banks saying “yes” to you and lending you more money, with leading finance strategist Andrew Mirams, director of Intuitive finance. I plan to ask him a number of the common finance questions we’re asked when clients come to see us at Metropole, but I’m also going to ask Andrew some of the questions you probably wouldn’t even think of asking but are important to know the answers to in today’s financial climate, so that at the end of today so you’ll have a better understanding of how to approach the game of property finance. The changing game of property finance with Andrew Mirams What’s actually happening in the world of finance? Are the banks open for business? The banks are always open for business. They’ve actually been pretty good through the pandemic. They’re working on more responsible lending. Are they still talking about loosening the purse strings a bit? Lending restrictions have been over the top a little bit and probably needs more scrutiny. Why is it taking longer to get preapprovals? Applications to banks have gone up a lot mostly due to first-home buyers and now investors are coming back as well. Also, lots of workforces are offshore We discuss some preapproval conditions borrowers need to understand It’s important to understand where banks are willing to lend – they restrict lending for certain postcodes and types of property Bank loan officers don’t necessarily understand business. You can’t go to a bank to get property advice The right time to invest is when it’s right for you Interest rates are important, but the right loan rate is more important. Online lenders aren’t necessarily the right answer. A finance strategy is much more than an interest rate or fees. Banks are looking at your serviceability as much as your equity. Loan insurance can entice banks to increase the loan, but it protects the bank, not you, and loan insurance costs. So, you have to find a sweet spot that gives you the amount you need without paying too much for the loan. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a bundle of free eBooks and reports at www.PodcastBonus.com.au Andrew Mirams Director Intuitive Finance Shownotes plus more here: Understanding the changing game of property finance with Andrew Mirams Some of our favorite quotes from the show: “I believe it’s important to have a preapproval in place before you go out into the market.” – Michael Yardney “I don’t think you should assume the bank is on your side.” – Michael Yardney “If you do the easy things now, you’re going to have a hard life later; if you do the hard things now, you’re going to have an easy life later.” – 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

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