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Chapter 1: What are the highlights from the Sunday Week in Review?
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 iheart radio and also spotify and apple podcasts or wherever you get your podcast from Well, I hope your weekend is going well. It is a Sunday, June the 12th for 2022.
Coming up in just a moment on our Sunday, as always, we reflect back with the Sunday Week in Review, looking back on some of the interviews over the last week. I see on this day in South Africa in 1964 Nelson Mandela is sentenced to life in prison.
Also on this day in 1948 in his farewell Ashes tour, Australian cricketing great Don Bradman scores 138 in the first test against England at Trent Bridge. Just thinking, wouldn't it be great to go down a time tunnel and sit and watch that batting performance this morning? Actually, any batting performance would be great to just sit and watch Bradman in real time.
All right, let's have a look at your weather around Australia on this Sunday morning. It's the main centre forecast with propertybuyer.com.au.
Chapter 2: How do weather conditions affect real estate decisions in Australia?
And first we go to Sydney, expecting blue skies and sunshine. A high today of 17 degrees. Unfortunately, the news is still wet for Melbourne, expecting showers and a high of 13. Brisbane, sunny and dry, 19 degrees is your forecast high. And in Perth, also some of the wet stuff, expecting some showers and a windy day and your high of 20 degrees.
On the optimism side, people really do have to be tempered, don't they, with statistics and analysis? Yeah, that's right. Sort of the default way of thinking about housing markets is prices keep going up, but that's certainly not always the case. Particularly in Australia, we've seen a number of considerable housing downturns even just in the last five years.
And so you do always have to have one eye on the data to try and get a sense of where prices are actually going to go.
Chapter 3: What data should buyers consider in a fluctuating housing market?
Yeah, and it brings me to this point because I can hear people saying, yes, the economists, though, they got it wrong with the COVID predictions of the market crashing. What do you say to that? Absolutely. We got it very wrong. Almost all economists got it very wrong. There's a range of reasons for that.
In my lifetime, the most significant recession or economic downturn that I had experienced prior to the pandemic was the global financial crisis. My framework for thinking about recessions was really heavily influenced by that. In particular, lots of economists, ourselves included, were expecting unemployment rates to go to above 10% in lots of developed economies.
Chapter 4: How can gut instincts play a role in property buying decisions?
I think we had 15% penciled in for Australia because we didn't have a good way of understanding what impact the pandemic was going to have on the labour market and on the economy. Obviously, as it turned out, the government did support jobs. The unemployment rate never rose too high and interest rates fell really sharply.
And so while there was some small house price falls in the initial months of the pandemic, once People were able to go out and start viewing homes again. They had this extra money saved up. They still had their jobs for the most part because not that many people had been made unemployed. And people got out and started spending, if anything, more aggressively.
And so prices have done really well in lots of developed economies, but Australia certainly hasn't. Enjoy your morning coffee.
Chapter 5: What legal considerations should parents keep in mind when helping children buy property?
It's your Real Estate Weekend podcast in review. There will be people who will say that they do their own market research and know markets well, but the moment in time, for example, where we are right now with shifting parameters, It always has a place and an important role when buying.
In other words, you can't afford to be complacent with thinking that what was applied six months ago or even two months ago should be applied to rational valuations. Yeah, that's a very true statement. Valuations become dated and outdated very quickly as the market moves. For years, we've seen it moving upwards in a very aggressive way.
So sales, evidence that a valuer or a buyer might rely on that are three to six months old were irrelevant within three to six months. You had to be much more aware of what was selling in real time. And now in Sydney and Melbourne, we're seeing the opposite swing where things are starting to cool, clearance rates are dropping and
Chapter 6: What COVID-related tax deductions should property owners be aware of?
And it's actually the opposite, that properties may not achieve those premium prices they did three months ago. So it's about knowing what's happening in real time and having a finger on the pulse. And talking of the buyers, what do you say to people who have a percentage of gut interest intuition when buying.
They might cover off like the ABC's evaluation, but there is this margin of 20 to 30 percent for them to operate in the space of instincts. Is there a place for instincts when the market can be ever evolving and changing? Look, there certainly is. And as a valuer, it's kind of hard to say that because we're very analytical and mathematical.
But buyers often say to me, you know, this house, I just love the feel of it or the neighbourhood feels good. And how can you value that?
Chapter 7: How can changes in rental income impact property investment strategies?
How do you put a value on that? But the reality is, as a valuer, our job is to interpret those values.
feelings those things that make a house feel good should be quantifiable so when that buyer uses that gut instinct that says you know my gut says this is just a nice neighborhood or a nice house the natural light is beautiful as it comes in in the morning I can sit and have my coffee on the veranda all of that is quantifiable and that's our job is to turn those instincts into the dollars and cents that the market will pay for that so there is a link there and when people buy a house it is important to go off their gut because that's what's telling them where the right property will be versus the wrong property
to a great extent it's your real estate weekend podcast in review and what sort of things come into play from a legal perspective when a parent decides to help out their children because legally if parents are operating as that type of bank there are definitely things to take into consideration right That's true, Craig.
There's a lot of things that parents often don't consider when they go into these sorts of transactions. One of the first things that they need to think about is if you're lending the monies to your children, do you have proper loan documents in place to protect you if you want to get that money back in the future? If you don't.
Your intentions of a loan and protecting your monies can come undone at a later point. It may be when your child gets into a marriage, gets into a relationship, you know, they might have a breakup. A lot of parents do not think about what actually happens when their children end up in a court over a divorce and their assets need to be split up.
So it's important you think ahead to see what these ramifications are if you do lend some money to your children. From a parent's point of view, when you're giving the money, it's almost like the wedding itself. You know, you're in that happy space, but that can unravel very quickly like a breakup and suddenly you're being exposed financially. And what about the whole aspect, Sam, of siblings?
Is there any grey area with gifting one child and not the other? If they have more than one child and they've gifted one child but not the other, it's important for parents to consider their wills and distributions. This is further magnified like when one parent gifts a child and not the others.
For whatever reason, they may like one child in terms of the relationship they have with them and the other one, they may not like their spouse and don't want to talk to them and don't want to give them anything. across every state, city and town of Australia, The Real Estate Podcast. I want to pick up on some COVID-related tax expenses and let's start with rentals and deductions.
What are some of the things that people should be paying close attention to in this space? Well, for example, you might not have had a tenant during COVID. There are lots of rental properties which have been left empty because the tenants have potentially lost their job or whatever. However, you can still actually claim the deductions in relation to those.
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