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Aussie Real Estate Podcast

Oil Prices - Let’s Buy An Apartment

26 Mar 2022

Transcription

Chapter 1: What are the current trends in the Australian property market?

2.596 - 8.903 Unknown

It's The Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia.

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9.203 - 31.827 Craig

And welcome to another episode of The Real Estate Podcast, available on iHeartRadio, also on Spotify and Apple Podcasts, or wherever you get your podcast from. Well, I hope that you're enjoying your weekend. It's another Sunday morning, March the 27th, and another busy day up and down the country with property auctions. And if you're attending, good luck to you.

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It's the main centre forecast with propertybuyer.com.au.

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36.374 - 55.466 Craig

And in Sydney this morning, expecting a shower or two and expecting a high of 23 degrees. Melbourne, mostly sunny with 28. Brisbane, expecting a shower with 27 degrees. And in Perth, expecting a high today of 26 degrees and a shower or two is possible.

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It's your weekend real estate podcast.

58.03 - 88.926 Craig

Well, economists predict the budget's deficit will be slightly better than the $98.9 billion estimated in the mid-year economic and fiscal outlook. Debt is edging towards $1 trillion, that's 45% of GDP. And there is likely to be a few big announcements to come from the Treasurer on Tuesday. But the government has already announced a string of cash splashes in the lead up to the budget.

Chapter 2: How are rising oil prices influencing real estate decisions?

89.387 - 121.351 Craig

So more details are coming out this coming Tuesday. Shane Warne's state funeral is going to take place on Wednesday evening at the Melbourne Cricket Ground, which is where in 1994 Warne completed his famous hat trick. The MCG was also the venue Shane sneered his 700th test wicket on Boxing Day back in 2006. which incidentally was his final test before retiring.

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121.952 - 146.785 Craig

And this coming week, we're going to be talking with a cardiologist about taking care of yourself. I think the timing around Shane Warne's state funeral is something we should probably pay attention to. And there are now very accurate cardiovascular screening tests that are available freely to us that can detect early disease with preventative management.

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146.805 - 158.659 Craig

So we'll take a look at that this coming week. And real estate agents working in cities outside of Auckland say that the housing market has slowed, but it is not decreasing.

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tanking the fomo scene over the last 18 months has disappeared and there are more houses being listed leading to more choice and less pressure for buyers this they say however is not a swing to a buyer's market but rather a more than even market that's comparable to pre-covid times

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180.543 - 196.088 Craig

And other factors playing into the market include higher petrol prices, which are making people look at properties closer to town, which is helping the apartment market. I reckon that's something that we probably need to watch here because

196.068 - 216.81 Craig

If the oil prices are a long-term factor and there are people that have been weighing up whether to buy an apartment instead of a house, that could be a tipping point for many people deciding to buy an apartment because they want to work closer as a result of the oil prices. So that's something we're going to watch over the coming months.

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It's your real estate weekend podcast in review.

Chapter 3: What does rent vesting mean for new property buyers?

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And I think we have to respect that every generation is different. That's what makes us all incredibly interesting. But I think this idea of rent vesting is they can have that lifestyle, but they're getting their foot in on the ladder so that when they do, if they do want to be an owner-occupier, for example, they can sell that property or ideally they could keep it, you know, as equity.

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But if they do have to, they can at least sell it and they're in that market because I think the longer that people wait to access that market, the more and more challenging it's going to be. You know, We are expecting more moderate price growth in the years ahead, but we do still expect it to sort of increase, not to crash and burn.

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255.767 - 284.38 Craig

You know, for somebody that used to live on the Gold Coast myself, I used to live in Southport, and I can tell you this anecdotal story that I should have bought this apartment back in 2012 in Runaway Bay. which was, from memory, I think it was like 24 squares. It was a two-bedroom, large apartment with office. It came with a marina berth right outside, two-car garaging with lockup.

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I could have bought that for $430,000, so I'm kicking myself.

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You should be kicking yourself because I know where you were talking about and those apartments are now selling with the Marine of Earth for about a million to 1.1 million. So you could have cashed in there, Craig.

299.319 - 313.752 Craig

And I saw that Mermaid Waters in Palm Beach had gone through a bit of a growth spurt as a result of development, exactly what you're talking about of new apartments. That had driven the medium prices up.

Chapter 4: How is the Gold Coast property market evolving?

313.972 - 319.377 Craig

How significant was that for the snowball effect right along the coast?

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Very significant because on now Mermaid Waters, I was reading the other day, medium house price in Mermaid Waters is the first one for the Gold Coast to have been ticked down to the $2 million mark. So that's driven prices up right across the coast.

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You've got some good central property, but you've still got plenty of room for growth through Southport, Labrador and the northern suburbs of Gold Coast.

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339.421 - 360.517 Craig

Yeah, so really good points. And I think the point should be made about those number of people who soon will be coming off that fixed-term loan, which they have been on for the last one or two years. For the very first time, they're arriving on that different side of the coin, and that's really going to pose... A lot of problems. And then, of course, we've got the oil.

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I don't want to talk about the oil problems just yet, but they're coming into a bit of danger area.

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They are. Look, if they come off it today, they'll be looking at the interest rates we've got today, and there are low variable rates out there. So they'll have a little bit of respite, and they might even actually end up on a lower rate than they're currently on.

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If they come off their fixed rate in another year's time, they'll be coming off in an environment where interest rates are on the way up, and they could well be on a higher rate and be looking for an extra repayment, a larger repayment every month.

Chapter 5: What should homeowners consider when coming off fixed-rate loans?

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So be ready for it. Even if you fix today, let's say you fixed for a year or two years today, you'll probably come off in a higher interest rate environment. There's a real trap in coming off fixed and that is you cannot just let it revert to the rate that the bank originally set up because that's going to be variable rate and chances are, it's going to be their standard variable rate.

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And that could be 2% higher than you've been paying on fixed. Do not just let it roll over. Make sure you compare rates and get a decent rate when you come off, whether it's another fixed rate or you go into a much lower cost variable rate loan. We connect you to the best real estate information across Australia, The Real Estate Podcast.

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