Latest / The Follio Property Podcast / The Truth About The Perth Property Market | ft. Trent Fleskens

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The Truth About The Perth Property Market | ft. Trent Fleskens · The Follio Property Podcast

• 0:05
  Welcome to I Call Bullshit Property Podcast, where we separate real estate fact from fiction. I'm Rhys Bedell, and in every episode, we uncover the truth behind the property market's biggest claims and trends. Joining me, as always, is our resident expert, Lachlan Delahunty. He's seen it all and isn't afraid to call out the bullshit when he sees it.
• 0:23
  And today, we have a special guest for today's episode, Trent Fleskins, Managing Director of Strategic Property Group, host of the Perth Property Show, and more importantly, the voice of the Perth Property Market. Welcome, Trent. That's a big call. That's an understatement too. I don't know about that. He is the voice and reason of the Perth Property Market.
• 0:40
  Well, just speaking off earlier, we wanted to get something that could help boost the ratings up. So Trent was the nice first guest that would come visit us. Well, we'll get my mum on as well. There's three. There's three people listening. There you go. But I think today we want to talk about the Perth property market because at the moment...
• 0:56
  headline media starting suggests that the market could be stabilizing potentially trending backwards I think one of the quotes was from Jack Henderson saying you can't make money in the Perth market and Perth is a shithole I think quote unquote so we sort of there's no one better place to talk about the market Trent so just get your sort of general feel of where you see it at the moment
• 1:15
  I just find those comments really naive and obviously from someone who spent less than a couple of days in Perth in his whole life, I'd suggest. Clearly an East Coast commentator and we've spoken about those before a number of times. These are people who obviously have their own job to do. It's a similar job to what performance does in terms of buying property for people at its core.
• 1:38
  but it's a very convenient thing for an East Coast commentator, whether it's Jack or it's another person from over that side of things to, as soon as humanly possible, call the Perth market. So, they have to stop trying to buy a property in a market that's a few thousand kilometers away and buy a property in their backyard with all their mates and real estate agents that they use every day. So, it's an
• 2:00
  convenience for them, right? Yeah, so of course they'd like to finish up with that trend of buying property in Perth or even Adelaide, for example, as quick as they could because it suits their business model. It's much more efficient to buy properties in suburbs they can pronounce, for starters, rather than... Do not love. Yeah, and paying people in the middle.
• 2:22
  to try and justify a suburb that they probably have never driven to, or certainly a house they haven't driven past before, and justify that to their clients. I mean, that's a pretty hard thing to do, I think. Yeah, and we're seeing that throughout the whole growth period of the Perth cycle, right? But is there any merit behind the fact that potentially the Perth market is cooling? Obviously, realestate.com, I think, come out with an article that 30% of the market segment has experienced potentially negative growth over the last month, obviously...
• 2:51
  The data behind that is real, but where do we see the Perth market currently and where do you think it's going over the next 12 months and medium term, 24 months and beyond? Well, I think there's a couple of ways to respond to that. Firstly, in the year that we had a 24% rise, there were still about 10 suburbs that went backwards. So you could...
• 3:11
  Talk to that for starters, right? But secondly, so there are always suburbs that are bucking the trend. When you're in a year that's going down 15%, there are still suburbs going up. And then we have to question whether that data is actually super accurate. And we know it's quite grainy and it's tough to trust line by line. Because it's the median, right?
• 3:30
  Yeah, it's median and the change of asset type. A suburb could have had sales from nicer part of the suburb versus less nice. It could have had new construction sales, which obviously increases values. So with regards to that side,
• 3:47
  there's always change, there's always variability in the granularity of our marketplace. That's the first point. Secondly, I'd probably liken it, or I have likened it to cooking your roast chicken in the oven on a Sunday night. We had our oven at 240 degrees. Like it couldn't go any further, this oven, right? So if the oven was to go back, the market was burning, people were burning themselves, FOMO was real, with a lot of emotion involved, a lot of fear and anger.
• 4:16
  You pull that back to 200 degrees, you're still cooking the chicken pretty well. Actually, it's probably a better way to have a roast at 200 degrees. It will, right? So that's how I liken this market at the moment. It was always going to be one way this market was going to go at some point in terms of cooling or heating because you couldn't really go any hotter than what it was. And you guys experienced that on the ground as buyer's agents than what it was last year or at least up until maybe...
• 4:43
  August last year, I'd say. And then we know that we were in and starting to feel and in hindsight could see a affordability cap in a lot of suburbs starting to hit in the last quarter of last year, as well as some buyer fatigue, I think, because people are just getting sick of getting smashed and having the market run away from them every time they get a pre-approval on what they can afford and then having to readjust and falling behind, falling behind. And
• 5:08
  And then we know we spent the last three months in tariff and election period, like double whammy election plus tariff conversations. So a lot of fear and noise in the world. Yeah. So it's not surprising that last quarter of last year happened.
• 5:24
  Even though we were still seeing growth, we were seeing a few more people putting their property on the market because we still had the same demands. The same amount of people, about 900 to 1,000 were buying every week. So demand was the same. A few more people were putting their property on the market.
• 5:42
  We can talk to this, but there was some speculation at the time, given the buyers agents from the East Coast started calling Perth that, hey, maybe it's East Coast buyers. Actually, on reflection, I don't think that it's what has happened for the most part. I think it's just a lot of buyers, owners in general, in the investment space just starting to finally cash out with some profit. Taking some funds off the tables. And the ironic thing is, whilst our supply on market market,
• 6:10
  bottomed out last year at about 3,500 properties and then increased pretty quickly to be frank about 5,500 properties by 1st of December. It then dropped going into Christmas as people decided not to sell their property over Christmas which happens every year and demand stayed constant so therefore stock on market drops and to the surprise of a lot of people has actually continued to drop. We're now at 4,700 properties again on the market which again I have to remind
• 6:40
  We're at 4,700. It's a serious undersupply. Yeah. So for anyone to look at those stats and suggest that our market is going to go or is calling our market, let's call it, because it's fair to say it's cooling. It's cooled from 24%. We know that.
• 6:58
  But that's unsustainable, right? It was unsustainable and not a healthy market. For anyone to then call Perth, I guess when you call Perth, that's to say it's not going to have growth in the future. Arguably hit the top of the cycle. It means you're either a mental, you're lying, or you don't know the stats. So pick one for Jack Anderson. I'm not sure which one you want to go with. So the fundamentals are still strong. I think people fail to say that. I guess it's hard...
• 7:22
  We're now across the board, obviously market fluctuations, but circa 70 to 80% growth in the market since 2019, early 2019 when the market arguably bottomed. So people in the market may struggle to believe that there is still legs or still growth in the market. But when you go back to that, the fundamentals, when demand outweighs supply, which in what you're saying, it does significantly, 4,700 properties on the market, and we're still seeing close to 1,000 sales a week, which is the demand side of the equation.
• 7:52
  that would suggest that that imbalance is still, you know, it's equal to what we've seen over the last few years. Well, I always say when you have the same inputs, you shouldn't expect a different output, right? So the inputs are the same from the demand side. Since COVID, we've been seeing 900 to 1,000 transactions a week. That's an analog for demand. You don't have a transaction without demand.
• 8:13
  since COVID. So that hasn't changed. 924 properties sold last week, 902 the week before. It really hasn't changed. And on the supply side, well, it's... And sorry, to give some context, back in 2018, it was 550 properties. Back in the mining boom, it was 800 properties. So we're operating above the demand level of the fabled mining boom.
• 8:37
  And on the supply side, we peaked out at 17,000 properties in 2019, March 2019. So we're at 4,700. So yeah, it's pretty hard from my perspective to make an argument at this point in time that prices would drop. The best argument you could make is that on a suburban level, there will be pockets that
• 8:59
  people either no longer see value in because the price of that suburb has gotten so close to the better suburb near it that they just migrate away to the better suburb as we see ripple effects happening. That's the first thing. You've probably seen that in places like Rockingham at the moment because that has shot up massively and also huge impact from buyers agents from the East Coast. And if you were going to see people pull out from the East Coast, it would be in places like Rockingham, Gosnells as well. So it probably has the most downside risk in those suburbs.
• 9:28
  right now because of that. But also just general affordability that, you know, people that live in certain suburbs have certain incomes. So there'll be some suburbs that haven't reached that affordability cap at an interest rate of 4.1 and then 3.85 and then 3.5% as we saw last week, of a cash rate where there's still some fat for growth based on demand and supply. And there'll be some suburbs where it's like, actually you'll look back on it and go,
• 9:58
  people just couldn't afford to offer more. So they dropped down in terms of their asset class or their location to buy something they can afford now. So there's always those pressures at every point in the market, every year, every suburb, where those things are happening so dynamically that it's essentially impossible to actually track and put your thumb on it.
• 10:19
  But when you start to look at the broader metrics and the direction the train is riding in, it's really hard to turn that around really quickly. So you generally have enough time if you have context with stats to understand when that seesaw is starting to balance out. And it's gone from this to probably this.
• 10:39
  So it's like, yeah, you're right in saying it's cool, but there's a long way to go. A lot of things have to happen for it to even just be a balanced market. And at that point, we expect to see 13,000 properties on the market. Yeah. And one of those things in sort of when looking at markets and runways is future stock, right? That's you look back to when the market arguably started to take it might have been 2014, it peaked and then 15, 16, we entered an oversupply because building approvals soared.
• 11:05
  Yeah, there was a lagging lead time on demand versus supply. The demand that was there in 2014 was being instigated, or the supply for that was being instigated, but then as demand pulled away, which you can do really quickly, you just have to hop in a plane...
• 11:21
  supply still took two years to actually come on and then now we've got empty houses. So that's why we see price growth. Because if you're in a situation where you could supply a house the day someone demanded a house, you'd only ever see price growth based on inflation, cost inflation, right? What does it cost to supply this new product? Bang. And so it would just be like this pretty much.
• 11:45
  But we don't see that. We see lead times lag from our ability for supply to meet demand, which is why you see these peaks. Peaks and troughs. And troughs. That's exactly what happens. But then looking at that now and looking into the future, because we can see dwelling approvals and then we can see dwelling commencements and we see dwelling completions, how is that data looking in comparison to those previous cycles? And we're currently in a serious undersupply, but are you seeing an uptick in dwelling approvals?
• 12:14
  Well, we have seen an uptick in dwelling approvals. We quite coincidentally had Mike McGowan, the executive director of HIA on the Perth property show three weeks ago talking about this. So we've seen an uptick to about 20 to 21,000 houses just being constructed. Is that approvals or construction? Approvals don't always mean- They're pretty close to each other at the moment. What we, last year was 16,000 and pretty much capped out at about 16,000 for the last four years. So to give you context,
• 12:46
  We've been bringing in about 90 to 80,000 people for the last three years per year. They need about 40,000 houses. We've been building 15 to 16,000 houses. Last year came in year on year at about 21, I believe it was. So every year we've been creating this big deficit. For the first couple of years of 2020 and 21, we were soaking up.
• 13:07
  or really from 18 to 21, we were soaking up oversupply, which is obviously what's reflected in the house price trajectory at the time. But then we've been accruing deficits every single year for the last four years. So what we...
• 13:22
  from a federal perspective in terms of targets are trying to achieve is 26,000 homes a year to get some federal cash for whatever Safiody wants to spend that money on. It's very unlikely, and this is why it's a bit of a pretend policy from Albanese. It was always going to be nearly impossible for us to meet that target. I mean, where we were capping out, like when we talk about what are we supplying, that's not what are we demanding. That's,
• 13:45
  That's how many bricklayers, how many roof carpenters can actually get houses, how many houses done in a year. So we're capping at 16,000. We did 21,000 last year around that number. So we really need to be able to get to a point where we're sustainably in the higher 20,000 to 30,000 over a long time. And then expect immigration to drop to like maybe...
• 14:07
  30,000. And we've seen that. We've had immigration at like 10,000 a year. So it does go up and down. But at the moment, it seems very much sustainably above 50,000 every year since COVID. And so every year it's above 50,000. We create deficits right now. So I asked the question of Mike,
• 14:25
  Well, Mike, are we at capacity or is there room for us to grow? He said, we are at capacity. So we don't have enough. So we don't have the people to build to even not only 40,000, which we needed for the last couple of years a year, not 30,000, not even 25,000.
• 14:44
  Not even $26,000, which is the federal goal. So we're not going to get the money from the federal government, and we're not in a position at the moment unless we can bring on a number of big apartment builders and all of their staff, which we don't have and that doesn't seem to be an appetite for.
• 14:59
  to then add another 10,000 apartments per year. Because what we do know is there are a lot of apartment buildings sitting there approved, waiting, hibernating for an ability to get funding based on profitability on their fees though to get off the ground. So the developers are there, the builders are not there and the finance, the feasibility is not there.
• 15:25
  And then you go, okay, well, let's say that suddenly we turn to switch on in 2026, because it won't happen this year. But in 2026, broadly in places like Bayswater, Morley, Warwick, Melville, these sort of areas, it really started to stack up broadly for apartments to go, yeah, they will be profitable. Well, then you have to ask how long will it take for them to build?
• 15:48
  Then it's another two and a half to three years once you get through pre-sales and builds and finishing trades and all that.
• 15:56
  if you really look, you know, unless immigration goes back down to 30,000 for a couple of years, at least just to soak up what our deficit is right now, we're looking at arbitrarily just looking at the numbers, not being able to solve this problem this decade. And then the only thing holding you back, again, just like it has been for the last couple of months, really, in some
• 16:26
  What's the forecast for interest rates? Is it going to get more affordable or less affordable over the next couple of years? We seem to think it's going to be less affordable. Sorry, we seem to think it's going to be more affordable, less lower interest rates. Then all that's doing is facilitating the inevitable growth that comes from the lack of supply versus demand.
• 16:45
  And depending on whether you already own houses or not, that's either a really good thing or a really bad thing. Yeah, because that's the fundamentals, right? When demand outweighs supply and there's confidence, and confidence can come from jobs, wage growth, or affordability, as you said, then typically you see a run on prices. And if you look at, step back for a second and look at the fundamentals, what you're saying, clearly there's demand significantly outweighs supply currently, and that's not going away anytime soon because the ability to bring on stock over the next three years seems improbable.
• 17:15
  And the markets are going to get more confident as we're entering a rate-cutting environment based on what happened last week and what they're forecasting for the rest of the year. So the tailwinds actually look quite positive. They look positive, and the only, I guess, caveat on that is...
• 17:31
  essentially the iron ore and gold price. So if we see in Perth, or if we see globally, tanking of both of those prices, or especially the iron ore price, because that's the big employer and multiplier to a lot of businesses in Perth and their employment. If we see that tanking to 60, 70 bucks and mines start closing, then you start to see a situation where people lose their jobs and then leave the state.
• 18:00
  But that's really the only caveat on everything we've spoken about for the last 20 minutes. And even then, we're still in a deficit of supply in the first place. So as long as a lot of people don't lose their jobs and therefore leave, which we saw in 2014 because of construction programs finishing, not because of market trends. And we don't have that, just to be clear. We're not finishing construction programs like we were back in 2014 and 2013. Yeah.
• 18:30
  this is more of a maintenance period that we're in right now, which is good, our operational period, then I don't know any arguments that someone from the East Coast can give me to tell me that they know better about our market than we do.
• 18:43
  That's well said. And to sort of touch on what you've spoken about previously about broadly speaking that we're gonna see suburbs that are gonna have negative growth regardless, even last year when the market broadly seen 26% growth, there was still markets that underperformed or saw negative growth. Well, let me ask you a question, if you see a place like Shenton Park go up 15%, 15%, 20%, 24% and then this year, as the doctors can't even afford the suburb,
• 19:10
  it goes down 5%. Has it been a bad run? No, absolutely not. And then as interest rates start to drop and allow those doctors who invariably are your buyers in Shenton Park, given the hospital down the road, as interest rates drop and allows them now to be able to afford, do you think the demand is going to go away or come back?
• 19:28
  It comes back. Of course it does, and the market continues to run. Exactly right. So the fundamentals and amenity of good suburbs doesn't really change that often. You generally see more suburbs improve in amenity and demand because they get better. They gentrify, like a Willoughy, for example, is a great example in Western Australia, where it went from being a state housing place to somewhere that has absolutely come on its lips and bounds because of urban infill.
• 19:51
  But you don't often see suburbs go from being a really good suburb to live into a really bad one. So they're always... Fundamentals are really important. That's right. So there'll always be volatility in suburbs that are not very highly sought after over long periods of time. At the end of train lines, mostly, they're pretty easy to point out in Perth, City of Kwinana, City of Gosnell, City of Armidale.
• 20:15
  back of the city of Wanneroo. And so those suburbs are going to see massive volatility based on investor demand and investors pulling out and the lack of affordability, right? Because lower wages there as well.
• 20:31
  But you should be prepared for that when you're buying into those suburbs. If you're buying into there, it's because you believe you can make a dollar out of it or because it's an unoccupied property and because you like living in the area you're from there and therefore you shouldn't be so sensitive to it anyway. That's where you want to live.
• 20:46
  I would suggest that anyone who's talking about volatility and negative growth in some markets, I'd say, show me your market that doesn't have a year where any suburbs have had negative growth. I mean, that's ridiculous. That's just part of the turbulence and volatility of every suburb and every market in the country.
• 21:04
  Yeah. But now in, you know, midway through, almost midway through 2025, the number of million dollar plus suburbs is the highest it's ever been. Or it's a quarter of all sales now. Yeah, a quarter of all sales. There you go. A quarter of all sales in Perth are above a million dollars, which is a scary thought for those that don't own property, right? So...
• 21:23
  Where do you think the opportunity is going to be over the next 12 months, 18 months? And is it the gap between those prestige suburbs that you spoke about? Are they starting to represent value as the bottom end of the market's really caught up? Or do you see an opportunity in those slightly more blue chip areas? It's hard to suggest that things represent value when prices have gone up 80%.
• 21:43
  I think the reality is people that don't own property need to just accept the fact that they missed out. And I call it non-buyer's remorse. And that as long as there's a view that there will continue to be more demand than the supplier, they just need to sort of reset their expectations on what value is.
• 22:01
  and recognize, again, that good suburbs are good suburbs for a reason, the amenity around them. And if that's the places they want to live, then they simply need to be the person who will pay a dollar more than the second person if that's where they want to buy into at the point in time they can afford it when they have the risk profile to do it.
• 22:20
  So does it represent value that Cottesloe is 10% less expensive in the $3 to $16 million space? Not really. I would suggest there are many other places I'd like to live personally than Cottesloe.
• 22:37
  It's nice to know that I arbitrarily could buy a property there this year. That's 10% less than it was last year, even though that's still 70% more than it was five years ago. It's hard to swallow that, right? But if you move down the scale, where is the opportunity?
• 22:54
  The opportunity from my perspective that I called at the start of this year is amenity. People, as interest rates drop, will essentially be grappling up the amenity scale with the equity that they have from owning houses in the last five plus years.
• 23:11
  So they bought in, I'll use extreme examples. They bought in Armidale for 300 grand. They sell this year for 600 grand. They've got 300 grand to play with. They use that 300 grand as their 20% deposit to buy into Canningvale for a million bucks, where they probably wish they were back in 2018 in the first place.
• 23:30
  you do that anywhere along the amenity scale in Perth. Pretty much a climb in the amenity scale. Yeah, this is your opportunity. It's the same time back in 2020 and 2021 when rates were 2%. There were people who were 30%
• 23:45
  couple, maybe a baby and a dog, who before rates dropped to 0.1%, cash rate dropped to 0.1%, were probably looking at a reality of buying into Jewett Hill. Cash rate drops to 0.1%, their interest rate's 1.9%. Jesus, we can get a loan that allows us to buy into Wembley.
• 24:03
  Two years later, rates are at 6%. They couldn't get the loan that they've got right now. They could never buy into Wembley ever again. That extreme won't happen because we won't see rates drop back to 1.9%. But it's a mini opportunity like that again where people go, this is my chance over the next year to get into an area that they've been locked out for maybe for the last six months.
• 24:25
  simply because of serviceability, not price. Does that make sense? Yeah. So they're still biting their tongue, swallowing the extra price, but the system at least allows them to access it via extra lending. Yeah, well then I've seen it, no, it's just a,
• 24:43
  So those sort of entry level suburbs, historical entry level suburbs, have got to the point now where your more established suburbs represent value and may not have moved in the last 12 months as quickly. Yeah, that's right. And that's everywhere you draw a circle around Perth. No one would have thought you'd see Armidale in the 600s, Rockingham in the 7, 8, 900s. Before COVID though, you could buy into Rockingham with 300 and something.
• 25:06
  you know so then you go well did I really want to be in Rockingham in the first place I mean there's a lot of arguments to stay in Rockingham with Orcus so that's another story but you might go now that I've made like a lot of money in the last few years not really doing anything just one good decision at the right time maybe I now can go and buy into Coogee
• 25:26
  Maybe I can be in Beaconsfield, you know, these sort of places. So this is that big change up. There'll be a big migration. The great migration will sort of happen in the next couple of years. You think the money will follow amenity? People will follow the amenity because they always would have liked to in the first place. The reason they were in Rockingham or in Gosnells or in Maddington or in Camillo or Seville Grove is not because they're like, geez, I love Seville Grove, great places. Because it's the only place I can afford now with rates being at 6%.
• 25:54
  You drop them, you get your equity, you move up to Southern River and you go, oh, at least I'm in now.
• 26:01
  Trent, what's your opinion on urban sprawling? I've been wanting to pick your brain on that. I was living in London for nearly 10 years and moving back to Perth nine months ago, I just couldn't get over how spread out everything is. And even as you get closer to the city, there's not much of a vibe in certain areas that you're better off going to some, I'm Northern, Northern suburbs. You better off going to some of these pubs and beach clubs up near Yanchip or Eglinton and then a bit of a vibe closer to the city. And what's your opinion? How can we, you know, what's, how can we solve this sort of moving forward?
• 26:30
  I've been trying to solve this for the better part of a decade. I've been a part of Urban Infill for 15 years now. And as much as I'd like 90% of our supply to be coming from Urban Infill, it's just not a reality. We were down to like 11%. I don't know what the stat is now, but a couple of years ago it was like 11%. The goal was 47% of our new supply to be over in infill.
• 26:53
  And the reason it was at 11 is because we're not building apartments, which is the scale. And townhouses and triplexes have become nearly impossible to make stack up because of the median density code. So what do I think of urban expansion? It's not the preferred option, but it is the lesser option.
• 27:13
  well, it is the lesser of two evils. The worst of two evils being no supplier whatsoever, which would send house prices even further and make it even more unaffordable. But the taxpayer ends up paying for it.
• 27:28
  And if the taxpayer is not directly paying for it, it's the buyer of that block out in the urban fringes that's paying for it because of the extreme amount of development contributions that are passed on from the land developer, fair enough, as a business, to the buyers. And now you're paying $1,000 a square meter in the back of nowhere when that number was reserved only a few years ago for that pretty exceptional investment.
• 27:51
  suburbs in Perth. So that's all because of escalation on costs from government charges and fees and labor rates, because land is land. We're not putting any houses on it yet. So I'd rather a lot more of it be from urban infield, but I have come to an acceptance, at least in the short to medium term, that is not going to be the case and that
• 28:14
  some supply is better than no supply. But knowing that, and I've explained this a few ways now, you put your kid on the table and say it's time to have dinner and you say here's your broccoli, here's your ice cream and you put the ice cream on the table at the same time as the broccoli, they're invariably going to eat the ice cream and that is what the government via the development community has been doing for the better part of 50 years. The broccoli obviously being apartments because the path of this resistance for the government
• 28:43
  is to listen to the land developers who say, hey, if you want 20,000 homes this year, we can do this pretty quickly, just rezone this area, we'll send the sewer and the schools and everything out there. The apartment guys go, oh geez, we can do it at 500 a time. We're all competing with each other and we're all competing for sites and no one in the neighborhood wants us to be here in the first place and the planning approval system is way too time consuming and expensive and the build is really, really expensive and the banks don't really make it easy for us either.
• 29:12
  And there's so much risk we could go broke on this. We can't really go broke on small land developments. So the system is built against urban infill and it is not changing. And what about like with infrastructure projects like MetroNet? Have you seen that help some of those outer suburbs with their growth potential as well?
• 29:33
  In growth in what way? In property prices. Oh, I mean, no, I don't think Metronet's had a big impact on property prices. Property prices have gone up because of massive cost escalation in the cost of houses. And the cost of a property out there is mainly house. So the replacement value is just way higher on the house side than the land side out there, which is why places like Ellenbrook have gone from $400,000 to $800,000 in the space of five years, not because their amenities have gotten much better.
• 30:01
  I mean, yes, there's a train line there, but a handful of people use that every day at the moment. So it's not like people are buying it for the train line. So, yeah, I mean, the train line is obviously for the future generations and it's nice that it's there for them. But the reality is people are just buying what they can afford. And most young people will buy nice and new things because...
• 30:24
  they want to show off. And that's what you were growing up in Perth is to get that, I've said this before on podcast, but you've grown up to get that four by two, bit of decent land component. But it does feel like, especially over the last 12 months with the unit, people now seeing that as a viable option. There is a lot of it. It's not like they're preferencing it, Rhys. You see it in Sydney, you see it in Hong Kong, New York, London. People don't...
• 30:49
  If they ever had a choice, most people would... Oh, they're accepting of it, I should say. They would choose a detached house because they want their own space like The Simpsons. That's what we all grew up wanting, that sort of backyard and the option, at least the option of space. But as that reality becomes less...
• 31:06
  less available to the broader population, they start through acceptance rather than preference, normalizing to it. Their friends and family come over, their mom and dad go, oh, apartments aren't that bad. I guess we can downsize into one. And eventually you end up being in New York 400 years later where the only thing you would ever expect and even preference is now an apartment or a penthouse. And when you ask how much is this property, they give you a
• 31:36
  So not only is it not a house, they can't even imagine buying the apartment. That's where we're going. If you want to look into properties future in Perth, we're all in a capitalist market. We're all in, you know, have similar preferences around the world. You just have to look at places like Sydney and then New York and then London to look progressively into the future about what our future looks like. And we're just a long way back, like 400 years behind these places to, and, and, and
• 32:04
  wheeling and dealing in the growing pains of how we get from where we are to what we'll eventually get to, which is where they are.
• 32:11
  So then as an investor that's priced out of the market for an established home, does the conversation then look at units, fillers and potentially apartments? Yeah, it does. That's just what it is. It's not the preference for most people. Some it is, especially for renting. I mean, I prefer renting an apartment close to the city for the lifestyle, but I don't prefer buying it because historically it's the most risky asset of the three options.
• 32:34
  and is certain so it's a better lifestyle choice but ironically based on cultural preferences in perth right now not a better investment choice but that slowly will change because more people will normalize to it and just like the southeast asian or broadly the asian market it will be the normal thing you'll buy and you want people won't be scared of it they won't be preferencing the it'll be normal yeah but how long it takes for perth to accept be accepting of that as buyers let alone neighbors
• 33:02
  you know, it's probably not this decade. And it's only just normalizing in places like Melbourne and Sydney. And they're 20, 30 years ahead of us. If you look at where they are, even Brisbane's a good example of it. They're probably another 15 years ahead of us, but they're also a lot more accepting of apartments and change as a culture, it seems, in that part of the world.
• 33:21
  yeah we like being pretty backwards in WA I think and it has its benefits definitely definitely it's been a really good chat but I think mindful of time as well just for those looking into the market and might be a little bit I suppose in disbelief of where the market's at where it's going any advice to punters going to home opens this week whether they're going to buy a home upgrade or or first-time investors is there any sort of advice you give to listeners
• 33:44
  Speak to a mortgage broker, the best one you can find who gives you the most time. Get a pre-approval and be ready to offer very, very competitive terms for the house you're after. Because time out of the market is your biggest enemy, and it has been for the last five years. Recognize that, to be really frank, there's been windows, and we've spoken about these before, windows of time where there's been
• 34:11
  fairly good opportunities to buy relative to where the market was at that point in time. And that window is probably just closed. So now it's like, get on with it. And if you were going to, don't just go buy for the sake of it. Don't just buy property for the sake of it. But if you were going to buy, if you have been in the market for a while, get over your non-buyer's remorse, get over your risk aversion and...
• 34:32
  pay what the market requires you to pay for you to access that property and be prepared and be confident and focused because there will always be someone just as focused, if not more focused than you on that exact property and that exact street compared to being sort of scattergun and being open to 20 suburbs. But yeah, that's probably the best thing I'd say is pick your suburb, pick your housing type, pick your non-negotiables. When you find something that fits those, offer what you have to to get it. That's the market. That's fair value right now, not three years ago.
• 35:01
  Yeah, that's very good. And then in summary, those that are calling out the Perth market to be end of the cycle, the market's done. Go back to Sydney, man. Focus on your own properties and your own market. We don't need you. Love it. Make sure to join us next episode. Stay informed, stay curious, and keep calling out the bullshitting.