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Nowhere to move: The hidden driver of rising house prices · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
0:13
Speaker 1: James Kirkby. Welcome aboard everybody. Hey, how quickly sentiment swings
0:17
Speaker 1: a from one week to another. We have been skeptical
0:21
Speaker 1: on the show, of course, for some time about Ray
0:23
Speaker 1: Kutts and how many more there would be, and really
0:26
Speaker 1: I think it seems to be consensus now that that's
0:29
Speaker 1: it for Ray Cutts. I see my esteemed colleague James
0:33
Speaker 1: Glynn of The Wall Street Journal and The Australian this
0:35
Speaker 1: morning saying as much I agree with this that there
0:39
Speaker 1: won't be any more Ray cuts I think they could
0:41
Speaker 1: be flat for quite a while. But also I don't
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Speaker 1: think in any way that will disturb house price bounce
0:47
Speaker 1: we're getting just now. I'd be maybe more concerned about
0:50
Speaker 1: things like CGT changing. There's a Senate inquiry led by
0:53
Speaker 1: the Greens on that, or may I say overkilled maybe
0:57
Speaker 1: on the grunt and assistance that has been sort of
1:00
Speaker 1: directed towards young first home buyers, Not that I want
1:04
Speaker 1: to be mean to them or anything, but economics would
1:06
Speaker 1: suggest that it just lifts prices in that area, and
1:09
Speaker 1: that's what we've seen already clearly. So to talk about
1:15
Speaker 1: this and other matters. I have as my guest today
1:18
Speaker 1: Cameron Kusher, well known of course because he was in
1:21
Speaker 1: Core Logic, he was in a prop track and he
1:24
Speaker 1: is now an independent consultant at Kusher Consulting.
1:27
Speaker 2: How are you, Cameron, Well, thanks James, thanks for having
1:30
Speaker 2: me here.
1:31
Speaker 1: Great to have you on. So I mean some people
1:34
Speaker 1: of course. Paul Bloxham, HSBC chief Economist, a week ago
1:39
Speaker 1: said it's time to lift rates and it's not the
1:41
Speaker 1: only one. What do you think, with your deep expertise
1:45
Speaker 1: the residential housing market in Australia it's link with rates.
1:49
Speaker 1: What do you think the listeners should be thinking no
1:52
Speaker 1: change for quite some time or even to be on
1:55
Speaker 1: alert for a lift.
1:57
Speaker 2: So my view is on a hope for quite some time.
2:00
Speaker 2: At this point, I probably feel like the next move
2:03
Speaker 2: is still down, but I don't think that it's likely
2:06
Speaker 2: to well into next year. And the reason I think
2:09
Speaker 2: that the next move is likely to be down mainly
2:11
Speaker 2: comes down to the fact that the Reserve Bank are
2:14
Speaker 2: only forecasting the unemployment rate to peak at four point
2:17
Speaker 2: four percent. I think we will be extremely lucky if
2:21
Speaker 2: the unemployment rate only hangs at about four point four percent,
2:24
Speaker 2: and I'm probably of the view that we're already seeing
2:27
Speaker 2: the labor market weaken, and I think probably getting up
2:31
Speaker 2: towards a five percent unemployment rate is somewhat more realistic.
2:35
Speaker 2: And if that does occur, and if the jobs market
2:38
Speaker 2: really starts to stall, then the Reserve Bank may have
2:41
Speaker 2: to cut interest rates to try and stimulate that area
2:44
Speaker 2: of the economy. But I don't think we're getting any
2:46
Speaker 2: rate cuts anytime soon.
2:48
Speaker 1: So we'll meet the assumption that nothing will change flat
2:51
Speaker 1: perhaps for quite quite a good quite certainly we're talking
2:54
Speaker 1: well into next year. Okay, Now, this houseplace rebound which
2:59
Speaker 1: is getting head owns everywhere. Are you convinced that there
3:02
Speaker 1: is a house price rebound and residential property prices in
3:05
Speaker 1: Australia and do you think the conditions are there for
3:09
Speaker 1: it to extend.
3:11
Speaker 2: I've definitely convinced that we're seeing a rebound in housing
3:14
Speaker 2: prices and I do think it's going to carry on.
3:16
Speaker 2: What I would say, though, is I think if you
3:19
Speaker 2: go back to the middle of the year, the expectation
3:21
Speaker 2: was that interest rates would probably be fifty basis points
3:24
Speaker 2: lower than they're going to be by the end of
3:26
Speaker 2: this year, and then we're probably going to get another
3:28
Speaker 2: one or two cuts in twenty twenty six. So I
3:33
Speaker 2: think that the fact that the Reserve Bank has made
3:35
Speaker 2: it quite clear that there's no interest rate relief coming
3:38
Speaker 2: in December, and there's probably not any coming for some time,
3:42
Speaker 2: I think that could cause the rate of price growth
3:44
Speaker 2: to slow. But I still expect we're going to see
3:47
Speaker 2: prices rise, and that's purely a function of the fact
3:50
Speaker 2: that we've got very strong demand for housing. People have
3:53
Speaker 2: seen a significant increase in the equity in their homes,
3:57
Speaker 2: maybe not so much in Melbourne and Hobart, but certainly
3:59
Speaker 2: in other parts of the country, and I think that
4:02
Speaker 2: is going to continue to drive more and more people
4:04
Speaker 2: to want to upgrade, more and more people to want
4:06
Speaker 2: to go and invest in residential property. And you've also
4:09
Speaker 2: got the other factor is that there's just not much
4:11
Speaker 2: property on the market. We're seeing low levels of supply
4:15
Speaker 2: in most parts of the country as well. And when
4:17
Speaker 2: you've got increasing demand and you've got low levels of supply,
4:21
Speaker 2: those are the conditions that create higher house prices.
4:25
Speaker 1: So in terms of predictions banks et cetera, talking five
4:31
Speaker 1: percent increase NICHE of mined twelve months is that.
4:34
Speaker 3: How does that sound to you?
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Speaker 2: I think five percent actually sounds a little bit light on.
4:39
Speaker 2: I think we'll be getting closer to sort of eight
4:41
Speaker 2: nine percent price growth over the next twelve months. I
4:44
Speaker 2: haven't put together my forecasts yet for next next calendar year.
4:47
Speaker 2: I'll be doing that in the next month or so.
4:49
Speaker 2: But yeah, I think, you know, a high single digit
4:52
Speaker 2: figure and maybe in some markets double digits again. The
4:55
Speaker 2: area is most likely to see double digit price growth
4:58
Speaker 2: again is probably Perth, Brisbane, Southeast Queensland as a whole,
5:03
Speaker 2: and Adelaide, which is crazy given how much prices have
5:06
Speaker 2: already increased over the past five years. But you look
5:09
Speaker 2: at those markets and there's just such a tiny amount
5:13
Speaker 2: of supply on the market, and we're still seeing a
5:15
Speaker 2: lot of people wanting to move into those areas and
5:17
Speaker 2: buy properties at this point.
5:19
Speaker 1: So is there a less nationwide? Is there less homes
5:22
Speaker 1: for sale than there was this time last year?
5:24
Speaker 2: We're seeing The total of these things are fairly similar.
5:26
Speaker 2: I think from memory they're about within about one percent
5:30
Speaker 2: of where they were twelve months ago. But if you
5:32
Speaker 2: look in places like Brisbane, Perth, Adelaide, Darwin, they may
5:37
Speaker 2: have increased a little bit. But if you go back
5:39
Speaker 2: to even early on in the pandemic, the number of
5:42
Speaker 2: properties on the markets down about twenty or thirty percent
5:44
Speaker 2: from what we were seeing early on in the pandemic.
5:47
Speaker 2: So you've just got really tight supply, and I think
5:51
Speaker 2: there's a few things that are really driving this. I
5:53
Speaker 2: think firstly, people know that they can sell their property
5:56
Speaker 2: and get a really good price for it. But the
5:59
Speaker 2: rental market are also so tight that people can't even
6:02
Speaker 2: transition through the rental market once they've sold their property
6:05
Speaker 2: to buy their next property. So as a result of that,
6:08
Speaker 2: people are just going, I can't find what I want
6:10
Speaker 2: to buy. I'm not sure that I'll be able to
6:13
Speaker 2: rent a place that I want to are renting or
6:15
Speaker 2: that's appropriate, so I'll just stay where I am.
6:18
Speaker 3: This is fascinating.
6:19
Speaker 1: It's a hidden cost of a rental vacancy rate of
6:22
Speaker 1: one percent, which I've never heard before actually, And it's
6:25
Speaker 1: a really original explanation as to why people aren't selling.
6:28
Speaker 1: Because the irony is that you mentioned when you said
6:30
Speaker 1: people aren't where the stock supply is less, was mapping
6:36
Speaker 1: straight on this areas where the prices were strongest, right
6:40
Speaker 1: wa specifically Brisbane coastal Queensland and you would have said, hey,
6:45
Speaker 1: you know, they've got higher prices, why wouldn't they sell?
6:48
Speaker 1: So is that a key reason then that they're worried
6:51
Speaker 1: about the transition as you say.
6:53
Speaker 2: Yeah, I think so. I mean we were kind of
6:55
Speaker 2: seeing this in Sydney and Melbourne back in twenty twenty
6:58
Speaker 2: twenty two of rectifying itself and if you look at
7:01
Speaker 2: Sydney and Melbourne actually have somewhat higher rental vacancy rates
7:05
Speaker 2: than the other parts of the country. So we think
7:07
Speaker 2: obviously the tight rental market is really tough for people
7:10
Speaker 2: that are renters and don't own homes. But a hidden
7:13
Speaker 2: cost of that very tight rental market is that people
7:16
Speaker 2: transitioning through the rental market after they've sold and are
7:19
Speaker 2: looking to buy aren't able to easily do that. So
7:22
Speaker 2: I think it actually courages people from selling because there's
7:27
Speaker 2: nothing on the market at the moment that they can buy.
7:29
Speaker 2: But there's also nowhere for them to go once they've
7:32
Speaker 2: sold their property.
7:33
Speaker 1: Yeah, so they make at a good price, but they
7:35
Speaker 1: don't know if they can rent or if around the corner.
7:39
Speaker 1: And similarly, they don't know if there will be another
7:43
Speaker 1: property being the type of property they wish to move too,
7:47
Speaker 1: and in numbers on this or is this your Surmari
7:49
Speaker 1: has just been across all the numbers.
7:52
Speaker 2: It's basically from talking to people. But if you look
7:54
Speaker 2: at if you look at Perth, Brisbane, well South East
7:58
Speaker 2: Queenslander as a whole and Adelaid in particular, they're the
8:00
Speaker 2: markets that have seen the strong list price growth, they
8:03
Speaker 2: also have vacancy rates of around one percent, and they've
8:06
Speaker 2: also the areas where we've seen the biggest drop in
8:08
Speaker 2: the total amount of stock on the market. So it
8:11
Speaker 2: plays through that when you think about vacancy rates, you know,
8:13
Speaker 2: typically you're looking in a normal, healthy market at about
8:16
Speaker 2: two and a half to three percent vacancy rate. So
8:19
Speaker 2: vacancy rates are less than half what they are usually
8:22
Speaker 2: at in a healthy market, and listing volumes are extremely
8:25
Speaker 2: low as well, so it makes it very tough for people.
8:29
Speaker 2: I mean it's hard to say tough because people have
8:31
Speaker 2: seen a significant increase in the equity in their home.
8:34
Speaker 2: But I think the other side of this is people
8:36
Speaker 2: don't want to be out of the market. So if
8:38
Speaker 2: they can't buy and sell straight away, Like what if
8:40
Speaker 2: it takes me twelve months to buy? I miss out
8:43
Speaker 2: on double digit price growth in the meantime, and people
8:45
Speaker 2: don't want to run the risk of that happening.
8:47
Speaker 1: That's really interesting and I've never heard that argument before,
8:51
Speaker 1: And then immunity makes sense, very interesting. I wonder also,
8:55
Speaker 1: I suppose it's been a case for a while, hasn't it.
8:57
Speaker 1: And there's nothing to indicate that those kind ofs have
9:00
Speaker 1: got a changer immediately.
9:02
Speaker 2: No, not at all. I mean, we are seeing obviously
9:04
Speaker 2: more investor we'll find out later this week when we
9:07
Speaker 2: do get the new lending data. But why all reports
9:10
Speaker 2: there are investors coming back into the market, But you know,
9:13
Speaker 2: new housing supply is still quite low. Invest that lending
9:17
Speaker 2: is accelerating, but it's certainly not back to the levels
9:19
Speaker 2: we were looking at back in sort of twenty fifteen,
9:21
Speaker 2: twenty sixteen, when there are a lot of investors active
9:25
Speaker 2: in the market. We also know that a lot of
9:26
Speaker 2: investors are now starting to look outside of these markets
9:29
Speaker 2: and targeting places like Melbourne because prices are cheaper, and
9:33
Speaker 2: targeting more affordable housing markets as well. So I just
9:36
Speaker 2: don't see that you're going to get the influx of
9:39
Speaker 2: investors or the influx of new housing anytime soon. To
9:42
Speaker 2: really ease that rental vacancy rate make renting easier in
9:46
Speaker 2: those markets. The issue for the renters is just their
9:48
Speaker 2: capacity to keep paying more and more rent because obviously
9:51
Speaker 2: inflation's being high, the cost of livings gone enough, everything
9:55
Speaker 2: costs more. They can only dedicate a certain amount of
9:57
Speaker 2: their income to renting.
9:59
Speaker 1: I suppose we do see the figures, we don't actually
10:01
Speaker 1: see weather, and this would be very interesting the next phase,
10:06
Speaker 1: if you like, where the investors tradition is zoned in
10:09
Speaker 1: on the inner city, the inner circle, and you mentioned
10:13
Speaker 1: there how they may be looking for opportunities in the
10:16
Speaker 1: mid circle or outer circle where they didn't really hunt before.
10:21
Speaker 1: Is there some evidence of that starting to occur or
10:23
Speaker 1: becoming a trend.
10:25
Speaker 2: We're definitely seeing that rental growth and rental demand has
10:29
Speaker 2: moved out of the inner city areas and is moving
10:32
Speaker 2: to the outer areas of the city. So if you
10:34
Speaker 2: look in in Melbourne, for example, some of the strongest
10:38
Speaker 2: growth in rents, some of the strongest demand for rentals
10:41
Speaker 2: is in places like the southeast. Now that's not necessarily
10:44
Speaker 2: where you would think people really necessarily want to rent,
10:48
Speaker 2: but I think the cost of renting in those inner
10:50
Speaker 2: city areas is driving people to look for more cheaper
10:53
Speaker 2: alternatives and that's moving further out. You know, in Sydney,
10:57
Speaker 2: places like black Town are seeing the strongest demand. Again
11:00
Speaker 2: not sort of intuitively where you would go, that's where
11:02
Speaker 2: people want to rent, but the cost of renting elsewhere
11:05
Speaker 2: has become so elevated that people are having to sacrifice
11:08
Speaker 2: on location in order to fit their budgets. And similarly
11:12
Speaker 2: in Queensland we're seeing places like Ipswich and Logan City
11:16
Speaker 2: where rental demand is strongest and they're obviously a lot
11:18
Speaker 2: more affordable than the inner city areas of Brisbane, but
11:22
Speaker 2: people can't continue to just keep paying more and more
11:24
Speaker 2: for rents, so they're having to move to more affordable locations.
11:28
Speaker 1: That really adds up, absolutely, it does. Okay, we will
11:31
Speaker 1: take a break. That was some very useful data and
11:36
Speaker 1: interpretation of data for you folks from Cameron.
11:39
Speaker 3: Back in a moment.
11:49
Speaker 1: Hello, Welcome back to the Australians Money Puzzle podcast. I'm
11:52
Speaker 1: James Kirby and I'm talking to Cameron Kusher of Kusher Consulting.
11:56
Speaker 1: Cameron just on wider picture and houses and house prices
12:02
Speaker 1: and issues around them for the investor there's a couple
12:05
Speaker 1: of things I want to talk to you about. One
12:08
Speaker 1: is the CGT, the prospect that CGT may be the
12:12
Speaker 1: next target if you like, after super for the government.
12:15
Speaker 1: The fact that there's a Senate inquiry now into CGT
12:18
Speaker 1: from the Greens. The fact that inside industry, if you'd like,
12:23
Speaker 1: there is some support or a review of CGT. For instance,
12:26
Speaker 1: the president of the Tax Institute, who you wouldn't immediately
12:29
Speaker 1: think would be so clear in what he's saying, but
12:32
Speaker 1: he says. Tim Sanders says, you know, he wants to
12:34
Speaker 1: see a review to see if current settings are appropriate.
12:37
Speaker 1: And the whole thing being about our CGT discount is
12:40
Speaker 1: it is arguably generous because it was set once upon
12:44
Speaker 1: a time as an alternative to inflation adjusting. At that
12:48
Speaker 1: time inflation was running at four and a half five percent.
12:51
Speaker 1: Now it runs even with the slatest spike, you know,
12:54
Speaker 1: we're barely near three. So the argument being there's been
12:57
Speaker 1: a discount and a discount and it's pushed up home prices,
13:02
Speaker 1: which of course would be the argument to go at it.
13:04
Speaker 3: What do you think?
13:05
Speaker 2: Firstly, I think labor would probably not be too disappointed
13:09
Speaker 2: that the Greens have got this inquiry. So, and we
13:15
Speaker 2: know that in previous elections the Labor Party has taken
13:19
Speaker 2: policies to change the capital gains tax discount and negative gearing. Yes,
13:23
Speaker 2: I think there's such a focus on productivity in Australia
13:27
Speaker 2: at the moment that I even though they've ruled out changes,
13:30
Speaker 2: I think this will be coming back onto the agenda.
13:33
Speaker 2: I think, you know, I don't see anything that's really
13:35
Speaker 2: going to boost productivity magically as we are now. So
13:39
Speaker 2: I think the government is definitely setting things up to
13:42
Speaker 2: have all things on the table and have a discussion
13:45
Speaker 2: about reviewing capital gains tax, reviewing native gearing, reviewing all
13:50
Speaker 2: sorts of taxes coming into the next election. And obviously,
13:53
Speaker 2: if you look at the opinion polls at the moment,
13:55
Speaker 2: they're in a pretty strong position. So they probably feel
13:59
Speaker 2: like they've got an even bigger mandate than I did
14:01
Speaker 2: at the previous election to try and take changes such
14:05
Speaker 2: as changes to the capital gains tax discount to the
14:07
Speaker 2: next election.
14:08
Speaker 1: Yeah, well, it would seem to be a time politically
14:10
Speaker 1: where they have the opportunity that wouldn't arise very often
14:14
Speaker 1: because as you say, they've been re elected stronger than
14:17
Speaker 1: many expected okay. Now, similarly on the issue of the
14:22
Speaker 1: conditions if you like, or the settings around property from
14:26
Speaker 1: which we must make our investment decisions as investors, I
14:30
Speaker 1: saw what you said recently that they Helped to Buy
14:33
Speaker 1: scheme was released too late, because what happened if everyone
14:38
Speaker 1: is across this the first Home Guarantee scheme which is
14:41
Speaker 1: now a universal scheme that means and eOne can put
14:44
Speaker 1: up their hand and get the access to go and
14:46
Speaker 1: buy their first home with a five percent deposit. That
14:49
Speaker 1: Leapfrog did be like other schemes which included the Help
14:52
Speaker 1: to Buy scheme, which was supposed to be shared equity, right,
14:55
Speaker 1: and that's got sort of sidelined, hasn't it. So you
14:58
Speaker 1: were saying that the help to Buy scheme was released
15:00
Speaker 1: two leads? What did you mean by that?
15:02
Speaker 2: So initially both the Help to Buy and the Home
15:04
Speaker 2: Guarantee Scheme was set to commence at the start of
15:07
Speaker 2: next year and the government decided to bring forward the
15:11
Speaker 2: Home Guarantee scheme and also make it more generous, so
15:14
Speaker 2: that scheme now has unlimited places, it has no income caps,
15:19
Speaker 2: and the price caps on where you can buy have
15:22
Speaker 2: been lifted substantially and it's very early. But all the
15:25
Speaker 2: evidence points to the fact that we've seen there was
15:28
Speaker 2: a cohorter first home buyers that rushed in before the
15:30
Speaker 2: scheme went live, and now there's a cohort of buyers
15:33
Speaker 2: that have been waiting for the scheme and they've rushed
15:35
Speaker 2: into the market. Now, the help to Buy scheme was
15:38
Speaker 2: a much well as it stands at the moment, and
15:40
Speaker 2: maybe they're going to change it, but as it stands
15:42
Speaker 2: proposed at the moment, ten thousand spaces a year, so
15:46
Speaker 2: it is limited. It also has income caps, and the
15:49
Speaker 2: price caps on the Help to Buy scheme are lower.
15:53
Speaker 2: So what you've effectively done by bringing the home guarantee
15:56
Speaker 2: scheme forward is pushed up the price for the people
16:00
Speaker 2: they're actually going to use the help to Buy scheme. Oh,
16:03
Speaker 2: created harder. It's going to be harder for them, and
16:05
Speaker 2: you would argue that help to Buy scheme is actually
16:08
Speaker 2: better targeted. So people that really need help to enter
16:11
Speaker 2: the market are going to access the help to Buy
16:13
Speaker 2: scheme rather than the home Guarantee scheme, and now they're
16:17
Speaker 2: going to be paying They're going to be paying a
16:18
Speaker 2: higher price for their property for the luxury of doing so.
16:22
Speaker 2: So look I don't like either of these schemes. They're
16:24
Speaker 2: basically just more fuel on the fire and encouraging people
16:28
Speaker 2: to buy at higher prices. But if you were going
16:31
Speaker 2: to schedule this correctly, I think you would introduce the
16:34
Speaker 2: help to buy scheme first and then bring the home
16:37
Speaker 2: guarantee scheme in off the back of it.
16:39
Speaker 1: Right, Okay, I want to segue here. Two more ideas
16:44
Speaker 1: been tossed into the market, which is not exactly the same,
16:48
Speaker 1: but it's close. Van Guard, the big ETF player, has
16:52
Speaker 1: proposed introduction of a kind of my Superstar investment scheme
16:56
Speaker 1: for young investors where they would basically have this sort
16:59
Speaker 1: of isolated, incubated shelter and they will be able to
17:03
Speaker 1: save inside that for two years or so in a
17:07
Speaker 1: tax protected environment. This was put forward by the MD
17:10
Speaker 1: event Daniel Shrimsky recently. Ultimately, this is a leading question,
17:17
Speaker 1: but I think a lot of our listeners would be
17:19
Speaker 1: thinking the same way. Is there a point at which
17:21
Speaker 1: we have to stop these help schemes because in the
17:27
Speaker 1: end they distort the market so much. You said you
17:30
Speaker 1: didn't like the existing ones. For instance, that helps horn buyers.
17:33
Speaker 1: Just in a nutshell, why don't you like them.
17:35
Speaker 2: The reason I don't like them is I don't actually
17:37
Speaker 2: address housing affordability. The way to address housing affordability is
17:41
Speaker 2: the lower prices. Politically, that's really tough, I understand that.
17:44
Speaker 2: But what these schemes do is give people more borrowing
17:47
Speaker 2: power to enter the market at higher prices, and they
17:49
Speaker 2: push up overall prices in the market. So yes, they
17:54
Speaker 2: help people to enter the market, but what ends up
17:56
Speaker 2: happening is you actually have to keep creating bigger support
18:00
Speaker 2: for first home buyers. So if you remember the first
18:02
Speaker 2: home Buyers the initial introduction of it back in two thousand,
18:06
Speaker 2: it was seven thousand dollars to offset the impostive GST
18:09
Speaker 2: on brand new homes, and it's now evolved into five
18:13
Speaker 2: percent deposits shared equity with the government. You know, play
18:17
Speaker 2: this forward another ten years. How much more support is
18:20
Speaker 2: the government going to be providing first home buyers Because
18:23
Speaker 2: these schemes don't work initially, But then they'll stop working
18:26
Speaker 2: as effectively and you'll have to make the bigger So
18:28
Speaker 2: whilst their position has helped, they help people right now,
18:31
Speaker 2: but they make it worse for the next cohort first
18:33
Speaker 2: home buyers coming into the market. So from a broader context.
18:37
Speaker 2: I don't think they help.
18:39
Speaker 1: Yes, and proven to a degree already by your point
18:42
Speaker 1: that this first home deposit scheme universal scheme which was
18:48
Speaker 1: brought forward, has stalked prices at the entry level right
18:53
Speaker 1: literally to the point that those caps cut out. And
18:56
Speaker 1: ironically the share equity scheme which comes behind us, which
18:59
Speaker 1: is aimed perhaps further down the tree in terms of income,
19:05
Speaker 1: they're looking at hot prices that have been pushed higher
19:07
Speaker 1: by the first scheme, which is really just shows how
19:10
Speaker 1: it all sort of can go terribly wrong. Okay, very good,
19:13
Speaker 1: We'll be back in a moment, folks. We have some
19:15
Speaker 1: very good questions. Hello, welcome back to the Australians Money
19:28
Speaker 1: Puzzle podcast. James Kirby here with Cameron Kusher of Kusher Consulting.
19:33
Speaker 1: We've been talking house prices, where they're going and also
19:36
Speaker 1: what's going on inside the market. I bet you found
19:39
Speaker 1: that pretty interesting. Just before we move into the questions,
19:42
Speaker 1: I wanted to mention that I've got David Booth on
19:44
Speaker 1: the show on Thursday, who is someone with the most
19:48
Speaker 1: extraordinary history. He is one of the founding fathers, if
19:51
Speaker 1: you like, of Index and ETF Investing. He's a co
19:55
Speaker 1: founder of Dimensional and was in that area of the
19:58
Speaker 1: whole Chicago school with Nobel Prize winners family and French
20:02
Speaker 1: and Byron Shows, et cetera extraordinary background that he came
20:05
Speaker 1: from and did some extraordinary things. So don't miss that, Okay.
20:08
Speaker 3: Now.
20:09
Speaker 1: Correspondence is from leafblower Man, who is also known as
20:13
Speaker 1: Stephen Hi James. I'm sure you were as surprise as
20:17
Speaker 1: I was last week when Jackie Clark on the show
20:20
Speaker 1: said she had never heard of The Millionaire next Door,
20:23
Speaker 1: the best selling investment book from the nineteen nineties. As
20:27
Speaker 1: a financial journalist, I am sure you are well versed
20:29
Speaker 1: in conducting literature searches before writing and talking about a
20:33
Speaker 1: subject on the issue of spending money without overgeneralizing. There
20:37
Speaker 1: can be interesting cultural differences with some families sharing or
20:40
Speaker 1: loaning money within extended families to start businesses, for instance.
20:44
Speaker 1: Thank you very much, Steven. Yeah, good point. Yes, Well,
20:48
Speaker 1: you know the book that I mentioned and that you're
20:50
Speaker 1: familiar with, The Millionaire next Door is my personal favorite
20:53
Speaker 1: book of all time on investment, But then I've read
20:55
Speaker 1: loads of them, and to me, it's different because it
20:58
Speaker 1: talks about hanging on to my enough, losing it as
21:01
Speaker 1: opposed to making it, and I didn't think Jackie needed
21:05
Speaker 1: to know all the books that were out there because
21:07
Speaker 1: the thing about Millionaire and next Door. Of course, it's
21:08
Speaker 1: from nineteen ninety six, which is a while ago. I
21:11
Speaker 1: do ever heard of it, Cameron Cush, you'll put you
21:13
Speaker 1: on the spot.
21:15
Speaker 2: I have heard of it. I haven't read it. You
21:16
Speaker 2: know some of my favorite books. I've just got thinking
21:19
Speaker 2: about this. I've obviously read The Intelligent Investor, and I
21:22
Speaker 2: enjoyed that.
21:22
Speaker 3: And you got to the end of it, did you, Well?
21:25
Speaker 2: Not quite. It is hard work. I've tried it a
21:28
Speaker 2: few times, but like it's got some really good information
21:31
Speaker 2: in there. Probably not necessarily an investing book, but one
21:34
Speaker 2: book that is kind of related is the book Die
21:37
Speaker 2: with Zero. Really enjoyed reading that book. Yes, not necessarily
21:40
Speaker 2: about investing, but I guess it's more about investing in
21:42
Speaker 2: yourself and your family when they need that help, rather
21:45
Speaker 2: than waiting around and giving your kids money when you're
21:49
Speaker 2: dead and they don't have any memories with you to
21:51
Speaker 2: enjoy from it. So they're probably.
21:54
Speaker 1: Terrific principle, actually, isn't it.
21:57
Speaker 3: Yeah? Absolutely? Okay, that was good one.
21:59
Speaker 1: Thank you for chipping in with that and the other
22:01
Speaker 1: thing I wanted to say funny about the millionaire next
22:03
Speaker 1: door cost. Someone said to me recently, Yeah, well, you know,
22:07
Speaker 1: big deal millionaire. You know, the average house price you know,
22:09
Speaker 1: is near a million in many of the cities, and
22:12
Speaker 1: it's such a good point. But it's nothing to do
22:13
Speaker 1: with the millionaire per ses to do with the principles
22:16
Speaker 1: in that book. Okay, thank you, Steven. Next one is
22:21
Speaker 1: from Paul loved the podcast. An article in The Australian
22:26
Speaker 1: recently said the trustees this is in the First Guardian
22:29
Speaker 1: Shield Investments debacle, and tobaccle is a nice word for
22:33
Speaker 1: it stated that the trustees who were meant to be
22:36
Speaker 1: monitoring the First Guardian and Shield Investments groups are asking
22:40
Speaker 1: taxpayers to foot the bill. My questions are, this is
22:43
Speaker 1: the mandated role of super trustees to monitor the investment
22:46
Speaker 1: products they offer so that the same investment products are
22:50
Speaker 1: not dodgy and two can the government force the same
22:53
Speaker 1: trustees to compensate the investors who lost their savings. No,
22:56
Speaker 1: they can't, I would think straight away, Paul. But Macquarie
22:59
Speaker 1: of course has as immediately volunteered to pay the unfortunate
23:04
Speaker 1: people who were actively and seriously and thoroughly misled by
23:10
Speaker 1: big names that were bandied about basically by First Guardian
23:14
Speaker 1: and Shield. Interesting I see net Wealth wants the government
23:19
Speaker 1: to pay. Macquarie has already paid and never even asked
23:23
Speaker 1: the government to do so. So very different.
23:25
Speaker 3: Views on it. Have you.
23:27
Speaker 1: Are you familiar at all with that particular role of scandal.
23:31
Speaker 2: Cameron, No, it's not in my wheel house.
23:33
Speaker 3: Unfortunately, it's not in your wheelhouse.
23:35
Speaker 1: Yes, indeed, and you're better off certainly not to have
23:37
Speaker 1: had anything to do with those companies. But it is
23:39
Speaker 1: I think shocking that this sort of thing still happens. Really,
23:43
Speaker 1: we had thought all this sort of stuff.
23:45
Speaker 3: Was long gone, but it's not.
23:47
Speaker 1: And clever operators can still enter the system and be
23:52
Speaker 1: get the tick of approval from established blue chip names,
23:56
Speaker 1: which is of course their power a keep our in
24:00
Speaker 1: ring investors. We will come back to that another day.
24:04
Speaker 1: Thanks very much Cameron for coming on the show.
24:05
Speaker 2: Great to have you, Thank you for having me, good
24:08
Speaker 2: to chat.
24:09
Speaker 1: Great some really fresh insights there into the residential market,
24:13
Speaker 1: which folks, well, if you'd like to think it's going
24:15
Speaker 1: up nine percent or ten percent in the next twelve months.
24:18
Speaker 3: I wouldn't disagree with you at all.
24:19
Speaker 1: They are nationwide figures, of course, and all property is local.
24:23
Speaker 1: The money Puzzle at the Australian dot com dot au.
24:27
Speaker 1: For any further correspondent, send them in. Folks, love to
24:30
Speaker 1: see what you have to say about every show and
24:32
Speaker 1: every subject we talk about. Until then, talk to you soon.