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BREAKING! The Trend Just Flipped in Sydney and Melbourne’s Housing Market Outlook · The Follio Property Podcast

• 0:00
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• 0:56
  Auction clearance rate have plunged to their lowest level. Below 50% across Australia for the past five weeks. The latest consumer confidence data lowest level in 50 years. Including that period of COVID. Lockman's post budget. Sydney and Melbourne market's falling and it's playing out probably worse than what the public anticipated.
• 1:14
  They're trying to cover off saying that there's going to be 10, 15, 20% prices fall in Australia. Latest reports the clearance rates actually fell below 50% nationally. CBA have downgraded from a 5% forecast at 3% property price growth across the country. They're baking in more interest rates.
• 1:30
  rises. One thing that was probably underestimated was the serviceability issue. The fact that some investors' serviceability would reduce by 20-25%. And investors make up over 41% of new housing loans. National sentiment. It's the lowest it's ever been in 50 years and that's where the deck of cards would unfold.
• 1:48
  You're listening to the Folio Property Podcast. I'm Rhys Bettle and I'm here each week with my co-host, Lachlan Delahunty. Lachlan spent a big couple of weeks post-budget. Lots of news headlines, lots of stories, particularly around Sydney and Melbourne markets falling and it's playing out probably worse than what the public anticipated. Doomsday, I think you've been saying. There's a lot of people out there calling it doomsday, especially with Sydney and Melbourne markets.
• 2:12
  There's a lot of people, Rhys, with big opinions that have been calling markets to fall for a decade. And even a broken clock is right twice a day, right? So for them, this is paradise. Because if you call something long enough, eventually it will happen. But I think it's very broadly spoken about in terms it's not market specific. They're trying to cover off on the Australian property market.
• 2:35
  saying that there's going to be 10, 15, 20% prices falls in Australia. And then they're dragging markets that what's happening in Sydney and Melbourne is a very different story to what's happening in Perth, Adelaide and Brisbane. So that two-speed market that we speak about, it's playing out bigger than I think Australia anticipated. And I just don't think the voices in the industry recognise that there is clearly a divide now.
• 3:00
  The big banks are coming out with some forecasts as well. So today, what I want to speak about, CBA and Westpac have come out with some adjusted forecasts from property prices. You've rattled these economists with these banks before in terms of some of their predictions in the past not coming true.
• 3:16
  I want to talk through some consumer confidence. There's some later data out there. Also talk about our folio index confidence factor as well, because our data does differ quite significantly to what the broader, maybe doomsday message that we're getting sent out at the moment. But we want to particularly talk about the Sydney and Melbourne markets because they have seen some negative growth this year. And they're the ones that are particularly getting a lot of pressure in the media in terms of where those markets are going.
• 3:44
  Yeah, I think headline figures that auction clearance rates are the lowest they've been since early 2020 when COVID hit. So that is a concerning figure. Latest reports that last week's auction clearance rates actually fell below 50% nationally. When you look at auction clearance rates, it really only encompasses Melbourne and Sydney because they are the auction markets of Australia. Brisbane, it's typically less than a few hundred auctions and same with Adelaide and Perth.
• 4:10
  isn't an auction market. So it's a really good demand indicator for our two largest markets in Australia. And for them to fall below 50% for the first time since 2020 is concerning on the demand side. There's no doubt about it. Hey guys, quick thing to share.
• 4:25
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• 4:46
  Do these markets control the overall sentiment in Australia? So it's quite obvious that's the two most populated cities, dominates the media, dominates transactions as well, let's be honest. It makes up almost 50% of the total market, right? So yeah, it does. And it can change policy and sentiment really quickly. If you think back to 2017 when APRA stepped in and pretty well banned investment-only loans...
• 5:15
  That was to taper the Sydney market specifically, right? It had huge implications. Places like Adelaide, Brisbane, and Perth were suffering. They were markets that weren't going through the same boom, yet policy was brought out to stop the Sydney market. So absolutely, the biggest markets that may benefit from a change in lending policy off the back of a Sydney market or a Melbourne market falling substantially will be those micro capital cities, Adelaide, Perth, and Brisbane.
• 5:45
  CBA have come out, and we've spoken about Westpac and ANZ predictions on previous podcasts over the last few weeks, but CBA have come out forecasting a 3% property price growth across the country in 2026 and in 2027. Now, just to give you some context, that's downgraded from a 5% forecast. They're baking in more interest rate rises, expected to slow the growth, and obviously we've already seen some of those, like we've just mentioned, those big markets softening.
• 6:12
  What's your opinion on A, the prediction, and B, where interest rates are going to go? So I think they're making these predictions on the basis of interest rates. And every market's going to be different. You can't put the Australian property market into one category. And that's where the headlines we're seeing. If I'm in Perth and I picked up the Western Australia, I read that prices are going to fall by 15%.
• 6:35
  And I'm in South Australia and I read the advertiser. I see that house prices are going to fall by 15%. But you read between the lines, it's referencing predominantly Sydney and subtly mentioning Melbourne. So you've got to, the devil's always in the detail and it's clickbait articles, podcasts are just trying to get your attention. And the doomsdayers are having a field day.
• 6:57
  So let's look at what you just discussed. The predictions are there's going to be another two to three rate rises. Well, I would challenge that theory straight off the bat. You've got the latest data, inflation data, is that inflation has stalled, early indications that it has improved. Yes, you could argue that once they pull the fuel levies, then arguably it could go back up. Do you think the government's probably going to do that? I would suggest not. And then the second point is you've got unemployment now that's rising for the first time in years.
• 7:24
  So if you go back in time and look at those two key factors, a stagnant, if not in falling inflation environment and unemployment potentially on the rise, you'd be a brave RBA decision to go out there and raise rates in that climate. So I'm not saying there's going to be absolutely no rate movement this year, but to say there's going to be another two or three rate rises on the back of the information that we know today, it would be improbable.
• 7:53
  So that's where the lay of the land is. And then they go out and make these pricing predictions, which we know are never correct, on the back of forecasting two or three rate rises. So my theory is I don't think we'll see two or three rate rises. I'd be very surprised if we see one. That's where, for the data that we've got today, and data can change, but our job is to understand the data and make predictions on that. I'll be surprised if we see another rate rise. But if we do, I think one we'll see out this year.
• 8:18
  So on the back of that, do I think the falls in the property prices that the doomsdayers are predicting will be as dramatic? 10%, 15%, 20%? No, I don't. And like you said, Sydney and Melbourne make up almost 50% of the total market in Australia. There's going to be a lot of pressure around some of these decisions made at the budget and need to go through an approval process.
• 8:40
  And, you know, APRA, pressure is going to be on them. So we may see some change in lending policy or policy in general that may make it a little bit more favorable for some of these markets not to collapse. The property market, particularly in Sydney and Melbourne, employees, far too many people. Australian wealth, it's $13 trillion, is tied up in real estate.
• 9:00
  No one in this country wants to see a property collapse and history will tell us government banks will intervene and change policy, lending policy to ensure that we don't see a collapse in the residential property market here in Australia. So the more pressure that comes from falling prices, the more you'll start to see banks and policy step in to avoid a, you know,
• 9:24
  a recession environment where you see a housing collapse and that's where the deck of cards would unfold and I just don't think Australia even the government that we have in play aren't silly enough to let that happen.
• 9:35
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• 10:34
  You mentioned from an economics perspective, talking through inflation and unemployment data, but the Sydney and Melbourne, 50% of the market, and as you said there, surely that's the most powerful lever in terms of from a government or from an RBA perspective, pulling rates. So the further we see, and we'll touch on some of the data that we've got here on Melbourne and Sydney, but...
• 10:57
  The further decreases and the quicker these decreases happen, surely the sentiment will change and maybe your predictions will come true on the rate rises or lack of rate rises, I should say. And we know that sentiment moves markets and that's the reality in these headline media that we're reading at the moment is making sentiment. People read the papers during the week and then they go to the auction on a Saturday. They're going to be more nervous about potentially bidding up on a property if all they're reading and feeling is negative.
• 11:24
  sentiment, right? So we know sentiment itself can drive markets harder and faster than other levers, be that supply, demand indicators. So that sentiment can shift from a number of things. And I think the sentiment's already changed post-budget. Like I said in our previous podcast,
• 11:40
  Certainty creates positive sentiment. Even if post-budget it was a negative outcome, the fact there's certainty around what it looks like, and we woke up the day after post-budget and skies were still blue and the market hadn't collapsed overnight, gives people confidence that, okay, we know the game we're playing today and the rules have changed, but the fundamentals around real estate remain the same. And that certainty gives confidence in the market,
• 12:07
  And I think that will play out through 2026 when rates potentially go from a new story around, we're going to see three, four rate rises, which creates uncertainty, to potentially we're at the peak rate ceiling and the next lever may be a decline. And that's where we were this time last year, right? We're talking about rates going potentially down. There was positive sentiment, how quickly that can change. This year, it's all been about rate rises. We're now seeing the data
• 12:32
  is potentially going into a ceiling where we may have hit the top. RBA won't come out and say that, but on the ground, you'll start to sense that that will create the certainty around what the cost of money is going to be.
• 12:43
  You speak a lot there on consumer confidence and sentiment in the market. And you speak about this. We both speak about this on the podcast the last 12 months about how much that can affect and drive a market. The latest consumer confidence data has come out saying it's the lowest level in 50 years. Now, we've actually probably spoken about this data, similar stats we saw maybe a couple of months ago. So it's obviously trending one way. But a lot of that is down to sort of the media and pushing that negative narrative.
• 13:09
  What I wanted to reference today, though- The lowest it's been in 50 years. 50 years. Including that period of COVID. And that's probably the age we live in, Rhys, where it's at the tip of your fingers all the time, these negative news stories, which obviously has a huge impact on sentiment. Absolutely. And we have the Folio Sentiment Index, which is how we track potential investors, not necessarily the current clients of ours, just to be clear. These are people that have come through the podcast.
• 13:36
  They're more sophisticated, right? You go out to the broader market, they are going to be more dictated by news headlines than our listeners because they're educating themselves. I'm sure they listen to our podcast, other podcasts, and a lot of the listeners have a property or multiple properties. So they're coming from an angle where they may have seen one or two cycles, a level of sophistication and know that, okay, this is a moment in time. Nothing's ever as bad as what it appears to be. Equally, nothing is ever as good as what it's made out to be.
• 14:04
  And I think that's why you will see in our sentiment data that it's more positive. Absolutely. Well, it's a really good segue because we do separate listeners to the podcast between are they a mom and dad investor, first-time investor, experienced investor, two-plus properties. And the latest data comparing the start of the year to May is we've actually seen, no surprise, first-time investor has dropped in confidence. So it was 49% confident in the market. Now it's 47%.
• 14:29
  But actually, and this is, we've been tracking this post-budget each week to see if the data changes. And if anything, it only gets more confident. But one property, so someone who has one investment probably, I'd probably say it's a mom and dad investor, like 80% of the investors in Australia. That's gone from 62% to 64%. So we've seen an increase and I guess a 25% increase from what a first-time investor is seeing confident market.
• 14:52
  But the big one for me is two plus properties has seen a 5% increase off the back of the budget announcements as well. So just to echo your point there, experienced investors or people with serious portfolios, their confidence level has actually come up off the back of the budget and some of the changes there.
• 15:11
  And that's no surprise, I'm sure, our listeners are educating themselves on what the budget meant. And as we've gone through and continue to digest, and obviously we will know more towards the end of this month, I know they're trying to push the budget through the policies that were proposed. They're trying to push that through government by July 1 deadline.
• 15:28
  And reading into that information, there are going to be some ways that strategies to be able to get similar benefits that you could get pre-budget that you can get post-budget. But again, we'll find that out over the next sort of three or four weeks. But I think that certainty is now into the market. We know the game we're playing. We know the rules of that game and sophisticated investors are...
• 15:49
  see this potentially as an opportunity. When markets are, you certainly, we talk about Warren Buffett all the time, reference that point, be greedy when others are fearful. Well, if you're telling me that national sentiment's the lowest it's ever been in 50 years, that's the exact market I would want to be buying in. When sentiment's at the highest it's been in 50 years, that's probably at the point where I want to de-risk and sell some of my questionable assets in my portfolio.
• 16:12
  So we talk about this. We're going to go through periods of time over the next five to 10 years when confidence is going to be up and then it's going to go down. And that's just the nature of property markets and human psychology, right? So we need to capitalize on both ends of the spectrum. But when confidence is low, that's when you're going to be able to pick up deals that you're not going to be able to buy in terms of terms, conditions, price, than when confidence is high.
• 16:35
  So that's why I think sophisticated money will enter the markets over the next six months. Why there's some uncertainty? When do I think certainty will kick back into gear? The moment the RBA will meet in July, and based on the information that we have just recently with inflation and unemployment, there will be a pause.
• 16:51
  At that point in time, there'll be an increase in sentiment, naturally. Rates didn't go up. They were potentially anticipated to go up and they didn't. Positive sentiment. You'll see that play out in the markets pretty well immediately. And then as the year plays out, if there's more pauses in interest rates, sentiment will improve and the buying conditions will get harder.
• 17:08
  I haven't even showed you this data, so this is going to be fresh for you to understand. But I did address this to our team, actually, last week. We were going through a bit of a post-budget analysis on what their sentiment was saying. But we also, not only do we get details in terms of are they a first-time investor, mum and dad, experience,
• 17:24
  Also get location where they're based as well. And the fascinating thing, and for those that are listening, the graph will be coming up with these scores, but the fascinating things in markets such as WA and Queensland, so Perth and Brisbane predominantly, they've seen a serious increase in confidence. So from WA, this is out of 10, 5.8 to 6.7, and actually in Queensland, 5.6 to 6.7. Just to give you context as well, Sydney was neutral and Victoria was slightly up.
• 17:52
  But those two markets particularly, and the reason we don't quite Adelaide, if people are going to ask us, we don't have enough of a pool size in our opinion. So just to give people context, over 2,000 people have filled out this sentiment index, and we probably only have about 55 people from Adelaide, which isn't enough for us to confidently put that data. Any listeners that know anyone from Adelaide, send them the podcast. We need some local data sets. Correct.
• 18:13
  If you want to get on this sentiment index, please, we need you to fill it out. So for those that I know, there was a plug earlier in the episode about our investment report. That's where you fill in the sentiment index. But just to go back to my original point, Lachlan, what is your opinion on why we've seen such a sharp increase? This isn't a small increase in confidence in markets like WA and Queensland.
• 18:31
  Twofold, first being the supply and demand imbalance in those markets. So take away all the sentiment, all the noise around interest rates, and generally the cost of money across the board. Demand in those markets significantly outweigh supply. So we've got more people coming into those states than houses available or houses being built.
• 18:51
  So the fundamentals, both in Brisbane specifically and Perth and Adelaide, the fundamentals on those two key elements, supply versus demand, are still really strong. And so I think people can sense that. They can see that in the data. Recency bias also plays into it, Reece. So these markets have been extremely positive in the last few years. So that's playing into that. Where a market like Melbourne, where I think the sentiment's so low, is because any market that's gone through a period of stagnation or decline
• 19:20
  Now, in its arguably its sixth, seventh year of stagnation, that naturally brings around a lot of negative sentiment. And it's hard to convince anyone locally on the ground otherwise. And the same was no different in Perth in 2018. It was almost a decade in stagnation. The data was as clear as day that it was going to improve in the market. The fundamentals were extremely strong. But that local sentiment had been through a decade of negative market conditions.
• 19:44
  It took two to three years. They'd even seen 20% to 30% growth in the market, and there was still negative sentiment around it just because they'd been scarred by that downturn. I think that's the difference. You've got markets there to perform really well over the last four to five years, and that's why there's still a lot of positive sentiment, but the fundamentals remain extremely strong.
• 20:03
  And I do think the beneficiaries of a potential stagnant interest rate environment will again be Brisbane and Perth. And that was reflective in the May median house price increase, right? So Perth seen a 1.5% increase in house prices. When everyone was calling that May was going to be the destruction of the Australian property market, yet Perth went up by 1.5%. Brisbane went up by 0.8%. I think Adelaide was sort of 0.7%. So consistently positive growth in all the three markets outside of Sydney and Melbourne.
• 20:33
  Look, if you bought a house in either of those locations in the last five years, you're sitting on a good 60%, 70% equity. If you bought in those locations in the last 12 months, you've done extremely well. Okay, let's go through Westpac here. Just to quickly touch on Westpac, it's in the news at the moment. Now, we've been speaking about investor lending. Obviously, there's been the APRA changes in terms of the debt-to-income ratio, the removal of a lot of the trust. And then obviously, we've had the budget that's now going to probably slow down investor activity for years.
• 20:59
  for those entry-level first-time investors that were probably relying on negative gearing. However, Westpac has come out and said, up to date, it's got the highest levels of investor lending since 2004, and investors make up over 41% of new housing loans on their books as well.
• 21:16
  Where do you see that? That's obviously a high percentage. We've been talking about this for months. There's been probably one of the biggest handbrakes the country's seen in the last decade. Do you foresee that to drop significantly in the next six months of the year? Investor lending to drop? Correct.
• 21:31
  Yeah, I do, Rhys. When you've got the two biggest markets in Australia that are going through this period of uncertainty, naturally it's going to be more difficult to see an uplift investor activity. I think the investment lending in the other markets that we speak about will continue to be strong, but certainly in Melbourne and Sydney it will come off.
• 21:48
  What I think we'll see play out, the budget, you know, one thing that was probably underestimated, which we got onto very early, was the serviceability issue that was going to occur post-budget. The fact that some investors' serviceability would reduce by 20%, 25%.
• 22:02
  Now, weeks after the budget, it looks like it's probably going to land about 15% for some investors that they may lose on their serviceability. So what does that mean for the banks? Well, APRA may have to start to loosen up on some policy and we may see that play out if we see, so the Sydney market continue to fall. If we saw that market come off another 10%, again, no one in the country wants that to happen. Decision makers
• 22:26
  typically own property on the East Coast, and they want to protect the house of cards from collapsing. So what levers can they pull if we've got a government that's not going to do it? Well, APRA may have to loosen up their policy, and the most obvious one would be is the 3% buffer. You're from the lending world. Tell the listeners what the buffer is.
• 22:45
  Someone fact-checked me if I'm wrong on this, but I do recall reading an article yesterday where 50,000 first-time buyers took up the first home buyer, no LMI, 95% loan-to-value ratio scheme back in October, with a large majority of those being in Sydney. And I set an example on the podcast we did with Trent Fleskins a couple of weeks ago regarding what that would mean from a repayment perspective since that scheme came out. And I think off the top of my head, if you were in the higher...
• 23:13
  $1.5 million price range, your payments would have increased $700 a month just off the back of the rate rises. Now we're in negative equity territory as well. What's going to happen in the market in Sydney with those guys? It feels like they're already in negative equity and it's only going to get worse.
• 23:28
  We said we weren't going to get political race. And this is a political issue. They've literally given out money, again, to the most vulnerable, brought that forward. That policy for low LMI or no LMI and 5% deposits wasn't meant to be released until January this year. They brought it forward to October.
• 23:47
  And a large portion of that was taken up in Melbourne and Sydney. So you've got all these first-time buyers that are taking on debt well above their means. They've had out of their control interest rates have risen to the point where they arguably may not be able to afford the repayments because they certainly, it was going to be tight because they didn't have the 80%, they didn't have the 20% deposit originally. So they're already going into murky territory.
• 24:07
  Now, rates have risen to the point where they may not be able to make those repayments, but they'll be selling at $100,000 to $150,000 discount to what they paid for that property. So now they're locked up essentially by the government in this mortgage prison. And I don't wish that upon anyone because this is our most vulnerable first home buyers. So this will play out. And when you talk about the headwinds in markets like Sydney, this is where you get distressed assets. They'll be mortgaging in possession because what are their options? They can't make the repayments. They're in negative equity. You know, it's mortgage prison.
• 24:37
  So that is my concern. You'll start to see an increase in distress sales, an increase in mortgagee and possession sales, which again creates negative sentiment and it starts to self-fulfill. And that's the concern that the government now may have to step in to assist the people that they set up for failure from the start.
• 24:55
  Before we move on to Melbourne, just a final round up of Sydney. I think I know the answer to this off the back of what we've been talking about from a data perspective, but from an investment standpoint, is there value in the Sydney market right now? Hold off. I think there's going to be an opportunity in the next maybe 18 months. Could be as, depending on how fast that market falls, maybe in 12 months, but I certainly would not be investing in Sydney today because I know I'm going to buy at a discount in two or three months time.
• 25:23
  Let's go to Melbourne. So we'll kick it off with auction clearance rates, slightly better than Sydney in the low 50s or below 50, I should say. Melbourne had a 53% auction clearance rate. In terms of price growth for the month of May, they saw a 0.7% decline. So once again, not as significant as Sydney, but still kind of coming off. What's your thoughts on that?
• 25:44
  It is, and we're recording this in the Melbourne studio, so it's great. We've got boots on the ground, speaking to agents and experts. And it is definitely a different feel in Melbourne compared to Sydney. Obviously, Melbourne's coming off a much lower base, and we've been calling this... Melbourne is and has been at the bottom of the cycle.
• 26:02
  The falling of the markets typically coming from the top end, we're seeing some of the, I want to say top end, it's sort of north of $2 million properties. You're seeing them trade at a significant discount. You're also seeing the lifestyle markets, your second home markets falling significantly because obviously there's more land tax on those here in Victoria. And now with no capital gains, there's not a market for land banking, your second home. So what a second home is, typically a holiday home.
• 26:27
  So they're the markets that are really falling. What is competitive and interesting is going to the auctions on the weekend is that own occupier stock in suburban areas is actually trading quite well. And there's an example of an asset that we went to, a three-bedroom, two-bathroom family home in Coburg that traded at auction $200,000 above asking price. So there's...
• 26:47
  evidence that it's not playing out as bad on the ground here in Melbourne than it is in Sydney for two reasons. And I think that's typically because it's coming from a lower base, but equally it's the higher end stock in Melbourne that's probably hurting and that lifestyle second home.
• 27:02
  Interesting you say that because I had a meeting with our buyers agents, well, three of them this morning that work in the Melbourne office. And Melbourne units now, we've been talking about Melbourne units on the podcast the last six months. Melbourne units are starting, there's a lot more activity from an investor standpoint post-budget. So the feedback from they're getting from the local agents is that there's a flood of investor activity and a lot outside Melbourne on these unit stocks.
• 27:27
  Yeah, because the story is, and I know there were some interesting comments when we speak about units, that they never go up in value. It's like, well, that's incorrect. It's all about cycles. And if you looked at Perth and Brisbane over the last three years, the best performing assets in Australia have been Perth and Brisbane units. We've seen 60%, 70% growth in three or four years.
• 27:47
  So units can go up in value. Interesting thing with Melbourne is that the housing market stagnated for six or seven years. The unit market's been on stagnation for a decade. So people might say, well, if it's stagnated for that long, it's never going to go up. No, when house prices get to a certain point and replacement cost gets significantly higher than what you can buy these things for.
• 28:06
  there becomes an opportunity. And at the moment, that replacement cost in Melbourne is close to $200,000. So what I mean by that, the cost to buy a hypothetical unit, maybe $500,000 to go and build that unit, it would cost $700,000. And if you look at property over the long term, it typically will fluctuate around its replacement cost.
• 28:24
  We mentioned on our Market Update podcast that rental yields in Melbourne are now some of the best in the country. So looking at the latest data, they're pushing 4.5% for gross yield perspective. And rents are up 2.8% in Melbourne as well. So similar trend to Sydney, already starting to see a rate rise.
• 28:41
  Yeah, I think it's really important to distinguish between apartments and units too, Rhys. I think they're commonly associated together. Apartments is typically medium to high rise. So anything greater than three storeys, I would classify as an apartment. Anything in a complex larger than 20, I would classify as an apartment.
• 28:59
  And that is a very different market where you can be subject to oversupply. Units is typically in complexes less than 10, typically single or double story. So they're very unique in the sense that you're still buying some level of underlying land value. A common example would be buying one unit in a complex of four. If there was a thousand square meter block underpinning that unit, then you're actually getting 250 square meters of land. And that's where, when we talk about it on the podcast, it's important to distinguish between apartments and units.
• 29:27
  Looking at the Melbourne and Sydney data, it does look very similar. You look at auction clearance rates relatively the same, although Sydney a little bit worse. You're looking at falling prices very similar, although Sydney worse. You're looking at rents rising very similar. But the big one is the price. That's what I can't – the biggest difference between the markets is you've got a medium house price in Melbourne of $800,000 and then you've got a medium house price in Sydney of 1.257 mils.
• 29:52
  So my question to you, Lachlan, is you've mentioned there from an investor standpoint, Sydney is an 18-month window potentially. You know, markets could move quicker. You may see an opportunity in the next 18 months. But Melbourne, just looking at that medium house price and the entry point is now a good time to be investing.
• 30:09
  No for Sydney, made that clear. Yes for Melbourne, for the right asset. But you've got to be really selective and that's where I think when speaking to the BAs this morning, there's a lot of activity around units and apartments. You know, we inspect 60, 70 properties a week, Rhys, on the ground here in Melbourne, of which 60 to 70 of them we wouldn't buy because there's so many issues associated with it. So it's not a market to go out there.
• 30:32
  and just buy anything. It's a market where you can be really selective. You can negotiate terms, conditions, and prices at a discount from what you would in a balanced market. And that's where I see the opportunity in Melbourne. It's buying extremely well because we know when markets, when there is confidence in the market, it's an auction environment. It's who's got the deepest pockets. And often you have to...
• 30:52
  you know, arguably overpay for assets. Certainly not the case here. So it is early in cycle. We know early in cycles typically where you can get your best deals, but it's not a market to go out there loosely and just buy a property in the hope that it's going to go up because it likely won't. You know, you're buying for the medium to long term.
• 31:08
  Thanks, Zach Lachlan. We have reached out to a Sydney expert and we will be having them on the podcast to do an in-depth analysis similar to what we had with Josh Coleman on the Brisbane update. We've got a lot of data from a macro and micro perspective, but that on the ground sentiment is something we lack from a day-to-day basis.
• 31:24
  Stay tuned for that. If there's any other markets that the listeners want us to go into more detail, put them in the comments. Like I mentioned earlier in the episode as well, if you want to get access to that investment report and contribute to the Semi Index, if you don't agree with those figures that I said, and you think that's a little BS that the confidence is up.
• 31:42
  Download the report, fill out the sentiment index, let's balance it out. But we've got over 2,000 people that have filled this out. So I think that's a good enough sample size to show you what the sentiment is in particular investors and particular demographics as well. So you've been listening to the Folio Property Podcast. Thank you.
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