Chapter 1: What is the main topic discussed in this episode?
It's the Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia.
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, it's the end of another working week, Easter Friday weekend, the 15th of April for 2022.
And coming up in just a moment, Rich Harvey from Property Buyer is here and we're going to be having a look at misconceptions and even fortune cookies. But first, let's have a look at the weather.
It's the main centre forecast with propertybuyer.com.au.
And for Sydney, expecting mostly fine and a high today of 24 degrees. Melbourne partly cloudy with 23. Brisbane also partly cloudy with 27 degrees. And in Perth, expecting pure sunshine today with a high of 28 degrees.
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Chapter 2: What myths about property are commonly believed?
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Let's Talk Property, a podcast series with Rich Harvey.
Well, there are plenty of myths in the world littered throughout our collective psyche, often shared as fact, when in reality, they're either misleading or incorrect. For example, fortune cookies were really created in Japan and not China. But there is one misconception in the real estate industry, which I think people cling to as an absolute fact, and that is that land appreciates
Buildings depreciate. And to unpack this misconception, joining us is Rich Harvey, founder and CEO of propertybuyer.com.au to discuss this in more detail. Good morning, Rich.
Good morning, Craig. Great to be with you. How are you feeling? A bit tired after last night. I think you know the reason why, though.
Yeah, tell us a little bit about this Telstra Best of Business Awards. Now, you were among 24,000 businesses across Australia that actually put their nominations in. It was whittled down to just seven, which is an amazing achievement, really. How was your night?
Yeah, look, Craig, it was a great night. It was incredible to be amongst such a calibre of other business owners. You know, there's seven categories. There's actually around, probably around about 150, 200 finalists in total. But the category that I was shortlisted in as a finalist was called Progressing Australia, which is the top category.
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Chapter 3: What is the misconception about land appreciating and buildings depreciating?
I think if you want to sort of change the way that that statement reads. A lot of sort of so-called property spruikers will quote that statement to try and support the fact of selling a house and land package. They'll say, look, hey, we've got this 50 lots out the back of wherever. We're going to flog this on the basis that it's got 400 square metres of land.
So you've got to look at a whole lot of other factors that's going to drive value. So is it close to transport, shops, schools? Does it have a good community centre? What are the recreational facilities? How far from the major education centres is it? All of those factors help to create value. So another thing to consider, it's really about redefining this into proximity.
For me, it's not so much land or building. It's the location, location, location or proximity. So if I'm looking at as an investor where I'm going to decide to put my money, for me, it's about position and proximity. That's what I'm looking for as a fundamental driver.
Yeah, so you raise, boy, there's a lot there that you've unpacked. And how would you advise homeowners and investors grappling with this whole myth? How should they balance the issue of land content versus land structure?
Look, I definitely like to buy properties that do have a good proportion of land content. Don't get me wrong.
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Chapter 4: How did Rich Harvey perform at the Telstra Best of Business Awards?
I definitely like land and everything that I've bought. But what I'm saying is that don't throw the baby up with the bathwater. When people take this statement, they think, oh, I can only buy a house with land and that's going to be only my investment strategy. You can buy good quality townhouses, great quality apartments in the right location. They're going to go up in value.
So if you're buying, you know, one or two better in Surrey Hills or St Kilda or in the inner parts of Brisbane, and Brisbane has struggled though with its unit market, but if you're buying a good quality apartment that's close to all of those facilities and amenities, that's going to really set you up for life.
It doesn't mean that you don't buy those kind of properties and don't have that strategy. So I think it's really important to get the right advice around your strategy and get the right advice around what are the factors that will drive a local market. It's not just the percentage of land value or the square meterage of the house. There's a number of different factors you have to consider.
the quality of the build. You can look at the old Meritan buildings used to have really crappy quality. They have improved. Whereas something built by Mervac, fantastic quality, unbelievably high spec, brilliant engineering. Look at the quality of the builder behind that apartment. That That's a really important part. I mean, some of the project homes that are built can be pretty crappy as well.
You know, you might say, oh, I'm going to go with this land depreciates, building depreciate and buy, you know, this little three bedroom project home. In 10 years time, it all starts falling apart. Whereas if you pick a quality builder, it's going to be lower maintenance and hold its value a lot better for you. So let's sort of dismiss this myth and say, let's consider broader factors.
But land does definitely appreciate and buildings can actually appreciate if they're maintained well over time.
Hey, Rich Harvey, thank you for unpacking that subject. Quite a big one to unpack, but you've done it and the weekend is on the doorstep. So enjoy your weekend and we'll chat again next week.
Thank you so much, Craig. Look forward to it.
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