Scott O'Neill

People have got higher debt levels as well.

I imagine you bought a 95% loaned unit in Sydney and you're negatively geared 20 grand a year back when it was, you know, a 2.5% interest rate.

You know, that's going to be quite a stressful situation and people will sell in those situations.

Yeah look I've seen this firsthand so like I'm in the business of helping people acquiring commercial property and we're literally seeing about the volume it's about 40% more than it was this time last year in terms of what we're purchasing for our clients that's just in dollar amount.

And we're really just seeing an explosion of, I guess, extra interest in this department.

And one of the main reasons I think is the interest rate talk.

As interest rates, you know, the threat of the interest rate rises increase, people start looking at their residential portfolios, which may already be negatively geared or at best evenly geared, and think, what would an interest rate rise do to my portfolio?

And it's going to make it harder to hold.

So you immediately think, where can I get better cash flow?

Because that will support a higher interest rate environment.

And that's where commercial is quite literally, you know, a fast track solution to that.

You're going to be dealing with much higher incomes on the assets.

And, you know, an interest rate rise really won't scare you when you're sort of hearing the numbers we're talking.

Yeah.

So real quick.

background so we're purchasing around sort of 40 properties per month for our clients on average and this is just my anecdotal evidence of what i'm seeing in the market so in sydney like yields can be as low as two percent but most most sort of between two and four percent net so obviously that's not super high it's in fact one of the lowest yielding markets in australia as is melbourne which is quite similar you go to places like brisbane you can still find yields anywhere from five to seven percent net return

Our average purchasing yield in Brisbane in 2022 this year is 6.1 at the moment.

So we're still seeing good yields.

That's industrial, that's neighborhood shopping centers, stuff like that.

Now, yields will vary depending on length of leases and quality of suburb and whatnot.