April 23, 2025 • 9 mins
On this week's Current Market Insights - Harris Partners' Peter O'Malley joined 'Ugly Phil' O'Neil on 2GB Nights to discuss all things property. In this insightful chat, they discuss market trends over this Easter/ANZAC Day holiday period, the role of the Bank of Mum & Dad in the housing market and the risks in friends pooling together to purchase a property. You can listen to the full chat here
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
We have Peter O'Malley on the phone from
Harris Partners.
Good evening, good to talk toyou.
So the drama caused by DonaldTrump and his tariffs this has
got some economists predicting afour-rate cut this year.
Four-rate cuts Would that domuch to the property prices,
peter?
Speaker 2 (00:17):
Look, I think you've seen a slowdown in the prestige
market since the share markettook a hit.
So the prestige property markethas been the strongest by far in
Sydney and Melbourne over thelast two years, phil, and that
is not driven by higher wages ormore confidence in that sector.
That's largely driven by peopleenjoying stock market gains and
(00:38):
locking those in in theresidential property market.
So I think the immediate effectof Trump's tariffs on the
Sydney property market probablyhave been just taking the edge
off the prestige market.
Across town agents arereporting that the same energy
was not there.
This has also happened at atime that the federal government
have banned overseas buyers.
(00:59):
So you've probably seen adouble-pointed attack on the
prestige market in the last twomonths that slowed it down.
The Reserve Bank in their laststatement, did highlight the
fact that, even though theyweren't going to cut interest
rates in April, they werestanding ready to support the
Australian economy.
In their words, if there is amacro geopolitical event on
(01:23):
markets.
So the RBA are ready to cutrates if there is damage from
Trump's tariffs.
Speaker 1 (01:30):
So is this a good time for a bargain then, Peter.
Speaker 2 (01:33):
You don't often get bargains in Sydney.
I think the weakest sector inSydney at the moment, phil, is
the apartment sector.
Any apartments that have gotstrata issues, elevated strata
rates, impending costs buyersare avoiding like the plague and
they're overreacting to thatsegment of the market and those
issues there.
(01:54):
So I wouldn't say bargains areon offer.
But there is a bit of value inapartments if you're in the
right suburb looking at theright thing.
Speaker 1 (02:02):
Right when you say the right suburb.
Where should somebody belooking at?
Speaker 2 (02:06):
Well, look, there are suburbs where, particularly
around the harbour, where youwouldn't say there's any
weakness in the apartment market.
So lifestyle apartments thatbaby boomers are downsizing into
are still doing okay.
But when you get into some ofthe suburbs where the strata
blocks do have some issueswhether it's they're replacing
the flammable cladding or theymight be replacing the elevator
(02:28):
at great cost, or there's acouple of special levees in
place in the strata books thatsort of stuff is really scaring
buyers off at the moment and itshouldn't.
It should actually create anopportunity for those buyers to
come in at an entry price thatthey wouldn't be able to
otherwise get in at.
Speaker 1 (02:47):
And are they easy to find, these bargains?
Speaker 2 (02:50):
um, well, look.
Unfortunately for all of us insydney, apartment blocks with
issues are all too readilyavailable.
How you find out about thehealth of a strata block, phil
is by reading the strata report.
And um, whilst I don't thinkit's uh ideal to go and hunt um
vendors in distress who've gotstrata issues in their building,
I'm going the other way on this.
(03:11):
I'm saying that buyers areoverreacting.
So you might find a building,for example, that has $25,000 in
special levies scheduled overthe next 12 months.
Well, the market at the moment,because it's running from a
fear perspective, is discountingthat apartment by $50,000 or
$100,000.
So all of the negative pressthat has centred on the
(03:33):
apartment construction sector inSydney and some of it is
justified is actually impactingon prices in the apartment
sector, there's no doubt, and Ithink it creates buying
opportunities.
Speaker 1 (03:45):
Fantastic.
Well, it's not often you hearthose words.
Is it likely to bounce backthough?
Speaker 2 (03:50):
If Chris Minns gets up on his agenda, which is to
build tens of thousands of moreapartments, that's additional
supply that will even out thedemand that's coming in.
I think what you will see withapartments and continue to see,
first and foremost, phil, is arising rental market.
So in the last few months I'vedone a few rental open
(04:11):
inspections just to get a feelfor things on the ground, and
I'll turn up to the inspection15 minutes early and there's
already a crowd waiting for meto get through the open house,
whether it's a house or anapartment.
So if you are a first homebuyer and you buy an apartment
and you think that in time youwill grow out of that apartment,
rest assured there'll always bea queue of tenants ready to
lease it from you and that's agood story for the longevity and
(04:33):
viability of the investment.
Speaker 1 (04:35):
Of course, let's talk about how a lot of younger
Australians are pooling theirfunds with a friend and instead
of buying a unit together, theycan buy a house.
I can see the pros and the consof this.
Let's walk our way through thepros first.
Speaker 2 (04:51):
It obviously gets you into a house where you might
otherwise end up in an apartment, and you're doing it with a
friend.
But will that friend be a closefriend and a business friend
and a co-property owner with youin five, 10 years time?
That's the question you bothneed to decide at the point of
entry.
If I can be honest, I'm not afan of this one, Phil, buying
with friends to get a highervalued property.
(05:13):
I think people are better offinvesting interstate at a price
point that works for them,building up equity that way and
then using that equity at alater date to come back into the
Sydney market independently.
Because let's face facts isthat who your friends are when
you're 25 is not always who yourfriends are when you're 35.
(05:34):
It's not that you're notfriends anymore, but you do
drift in different directionsand I have seen this quite a lot
over the years that friendswhen they were younger go halves
in a property and, I must say,rarely does it work out well.
Speaker 1 (05:47):
No, well, that was the cons that I was talking
about as well.
Sorry to jump the gun.
Well it's best to get in it andbe honest yeah.
So what kind of situations,then, do people find themselves
in legally?
Speaker 2 (06:01):
Well, look, if they're 50-50 tenants in common,
they've got half the expensesand half the equity at the other
end.
If one of the co-propertyowner's earnings go through the
roof because their career takesoff and the other goes into a
failed venture, for example,you've got one half of the
relationship that's flying andthe other half that's really
(06:22):
struggling.
And these are the sorts ofpractical issues that do pop up
and and, as I say, I think abetter way to build equity in
the property market if you can'tafford to buy a house in sydney
is to buy interstate.
There are some still some goodvalue cities around the country
and I think the best valuecapital city that's value in
Australia at the moment isMelbourne.
(06:44):
Due to the local taxation rulesdown there, they have forced
property prices down and I thinkthat if you do take a 10 to 20
year perspective on theMelbourne market, you'll do very
well at the moment.
Speaker 1 (06:56):
Of course, the important thing here, too is if
you're buying a house with yourfriend, keep all of the receipts
.
Right is if you're buying ahouse with your friend, keep all
of the receipts, right?
Speaker 2 (07:02):
Oh, that's right indeed.
Have a deed written up anddrawn up up front with your
friends so that everybody knowsthe rules, and it's kind of like
the constitution of therelationship, so that if there
is a discrepancy down the track,you've both got a document to
refer back to.
Speaker 1 (07:18):
All right, let's wrap it up with this thing.
I think this is fantastic.
The English town of Uppinghamhave got a nuclear bunker on the
market and it's 1.3 millionAustralian dollars and you can
renovate it if you want.
I just like the idea of havinga bunker.
Speaker 2 (07:34):
Well, in these day and age yes, so do I Is this a
good value?
Speaker 1 (07:38):
Do you think people can go out and buy this?
Is it worth it?
Speaker 2 (07:42):
Look, I don't pretend to know the up-income market
the way I know the inner west ofSydney, but let me say this
that how you would assess thissite and any others is that it
is a nuclear bunker.
It's not a nuclear site, soit's not stigmatized.
It's just got a dramatic titleto us and what you do, it's got
a price of 1.3 millionAustralians, so probably 650,000
(08:03):
pounds or thereabouts.
What you ask yourself is, onceyou build the DA approved house
that's slated for that site,what's it worth and how much
will it cost to build thatproperty?
And that will bring you back towhat should be about the true
land cost.
Speaker 1 (08:19):
Fantastic though.
It's beautiful property andit's out of the middle of
nowhere, so you've got plenty ofroom.
But what I really like about itfor me, if I moved in is I
wouldn't want to change anythingbecause it's got some fantastic
brutalist culture andarchitecture about it too.
Speaker 2 (08:34):
Oh, that's it.
It's a property of discussion,but there's plenty of those in
Australia, for example down theSouthern Highlands and down the
South Coast, and the owners,when it comes time to sell them,
can't give them away Really.
Oh yeah, absolutely.
What's a romantic andinteresting property, what's a
smart buy is completelydifferent.
Speaker 1 (08:52):
Are they nuclear bunkers?
Though, they're not nuclearbunkers.
Therein lies the rub.
That's what I'm looking for.
That's what I want the marketfor.
So if anything comes acrossyour desk, give me a ring.
I'll start Googling right away.
Phil, what's the website?
If people want more info, yeah,harrispartnerscomau.
Nice to talk to you, my friend.
(09:12):
Thank you so much for that,peter O'Malley.
There with Harris Partners andthe state of the property for
the weekend.
We have Peter O'Malley on the phone from
Harris Partners.
Good evening, good to talk toyou.
So the drama caused by DonaldTrump and his tariffs this has
got some economists predicting afour-rate cut this year.
Four-rate cuts Would that domuch to the property prices,
peter?
Speaker 2 (00:17):
Look, I think you've seen a slowdown in the prestige
market since the share markettook a hit.
So the prestige property markethas been the strongest by far in
Sydney and Melbourne over thelast two years, phil, and that
is not driven by higher wages ormore confidence in that sector.
That's largely driven by peopleenjoying stock market gains and
(00:38):
locking those in in theresidential property market.
So I think the immediate effectof Trump's tariffs on the
Sydney property market probablyhave been just taking the edge
off the prestige market.
Across town agents arereporting that the same energy
was not there.
This has also happened at atime that the federal government
have banned overseas buyers.
(00:59):
So you've probably seen adouble-pointed attack on the
prestige market in the last twomonths that slowed it down.
The Reserve Bank in their laststatement, did highlight the
fact that, even though theyweren't going to cut interest
rates in April, they werestanding ready to support the
Australian economy.
In their words, if there is amacro geopolitical event on
(01:23):
markets.
So the RBA are ready to cutrates if there is damage from
Trump's tariffs.
Speaker 1 (01:30):
So is this a good time for a bargain then, Peter.
Speaker 2 (01:33):
You don't often get bargains in Sydney.
I think the weakest sector inSydney at the moment, phil, is
the apartment sector.
Any apartments that have gotstrata issues, elevated strata
rates, impending costs buyersare avoiding like the plague and
they're overreacting to thatsegment of the market and those
issues there.
(01:54):
So I wouldn't say bargains areon offer.
But there is a bit of value inapartments if you're in the
right suburb looking at theright thing.
Speaker 1 (02:02):
Right when you say the right suburb.
Where should somebody belooking at?
Speaker 2 (02:06):
Well, look, there are suburbs where, particularly
around the harbour, where youwouldn't say there's any
weakness in the apartment market.
So lifestyle apartments thatbaby boomers are downsizing into
are still doing okay.
But when you get into some ofthe suburbs where the strata
blocks do have some issueswhether it's they're replacing
the flammable cladding or theymight be replacing the elevator
(02:28):
at great cost, or there's acouple of special levees in
place in the strata books thatsort of stuff is really scaring
buyers off at the moment and itshouldn't.
It should actually create anopportunity for those buyers to
come in at an entry price thatthey wouldn't be able to
otherwise get in at.
Speaker 1 (02:47):
And are they easy to find, these bargains?
Speaker 2 (02:50):
um, well, look.
Unfortunately for all of us insydney, apartment blocks with
issues are all too readilyavailable.
How you find out about thehealth of a strata block, phil
is by reading the strata report.
And um, whilst I don't thinkit's uh ideal to go and hunt um
vendors in distress who've gotstrata issues in their building,
I'm going the other way on this.
(03:11):
I'm saying that buyers areoverreacting.
So you might find a building,for example, that has $25,000 in
special levies scheduled overthe next 12 months.
Well, the market at the moment,because it's running from a
fear perspective, is discountingthat apartment by $50,000 or
$100,000.
So all of the negative pressthat has centred on the
(03:33):
apartment construction sector inSydney and some of it is
justified is actually impactingon prices in the apartment
sector, there's no doubt, and Ithink it creates buying
opportunities.
Speaker 1 (03:45):
Fantastic.
Well, it's not often you hearthose words.
Is it likely to bounce backthough?
Speaker 2 (03:50):
If Chris Minns gets up on his agenda, which is to
build tens of thousands of moreapartments, that's additional
supply that will even out thedemand that's coming in.
I think what you will see withapartments and continue to see,
first and foremost, phil, is arising rental market.
So in the last few months I'vedone a few rental open
(04:11):
inspections just to get a feelfor things on the ground, and
I'll turn up to the inspection15 minutes early and there's
already a crowd waiting for meto get through the open house,
whether it's a house or anapartment.
So if you are a first homebuyer and you buy an apartment
and you think that in time youwill grow out of that apartment,
rest assured there'll always bea queue of tenants ready to
lease it from you and that's agood story for the longevity and
(04:33):
viability of the investment.
Speaker 1 (04:35):
Of course, let's talk about how a lot of younger
Australians are pooling theirfunds with a friend and instead
of buying a unit together, theycan buy a house.
I can see the pros and the consof this.
Let's walk our way through thepros first.
Speaker 2 (04:51):
It obviously gets you into a house where you might
otherwise end up in an apartment, and you're doing it with a
friend.
But will that friend be a closefriend and a business friend
and a co-property owner with youin five, 10 years time?
That's the question you bothneed to decide at the point of
entry.
If I can be honest, I'm not afan of this one, Phil, buying
with friends to get a highervalued property.
(05:13):
I think people are better offinvesting interstate at a price
point that works for them,building up equity that way and
then using that equity at alater date to come back into the
Sydney market independently.
Because let's face facts isthat who your friends are when
you're 25 is not always who yourfriends are when you're 35.
(05:34):
It's not that you're notfriends anymore, but you do
drift in different directionsand I have seen this quite a lot
over the years that friendswhen they were younger go halves
in a property and, I must say,rarely does it work out well.
Speaker 1 (05:47):
No, well, that was the cons that I was talking
about as well.
Sorry to jump the gun.
Well it's best to get in it andbe honest yeah.
So what kind of situations,then, do people find themselves
in legally?
Speaker 2 (06:01):
Well, look, if they're 50-50 tenants in common,
they've got half the expensesand half the equity at the other
end.
If one of the co-propertyowner's earnings go through the
roof because their career takesoff and the other goes into a
failed venture, for example,you've got one half of the
relationship that's flying andthe other half that's really
(06:22):
struggling.
And these are the sorts ofpractical issues that do pop up
and and, as I say, I think abetter way to build equity in
the property market if you can'tafford to buy a house in sydney
is to buy interstate.
There are some still some goodvalue cities around the country
and I think the best valuecapital city that's value in
Australia at the moment isMelbourne.
(06:44):
Due to the local taxation rulesdown there, they have forced
property prices down and I thinkthat if you do take a 10 to 20
year perspective on theMelbourne market, you'll do very
well at the moment.
Speaker 1 (06:56):
Of course, the important thing here, too is if
you're buying a house with yourfriend, keep all of the receipts
.
Right is if you're buying ahouse with your friend, keep all
of the receipts, right?
Speaker 2 (07:02):
Oh, that's right indeed.
Have a deed written up anddrawn up up front with your
friends so that everybody knowsthe rules, and it's kind of like
the constitution of therelationship, so that if there
is a discrepancy down the track,you've both got a document to
refer back to.
Speaker 1 (07:18):
All right, let's wrap it up with this thing.
I think this is fantastic.
The English town of Uppinghamhave got a nuclear bunker on the
market and it's 1.3 millionAustralian dollars and you can
renovate it if you want.
I just like the idea of havinga bunker.
Speaker 2 (07:34):
Well, in these day and age yes, so do I Is this a
good value?
Speaker 1 (07:38):
Do you think people can go out and buy this?
Is it worth it?
Speaker 2 (07:42):
Look, I don't pretend to know the up-income market
the way I know the inner west ofSydney, but let me say this
that how you would assess thissite and any others is that it
is a nuclear bunker.
It's not a nuclear site, soit's not stigmatized.
It's just got a dramatic titleto us and what you do, it's got
a price of 1.3 millionAustralians, so probably 650,000
(08:03):
pounds or thereabouts.
What you ask yourself is, onceyou build the DA approved house
that's slated for that site,what's it worth and how much
will it cost to build thatproperty?
And that will bring you back towhat should be about the true
land cost.
Speaker 1 (08:19):
Fantastic though.
It's beautiful property andit's out of the middle of
nowhere, so you've got plenty ofroom.
But what I really like about itfor me, if I moved in is I
wouldn't want to change anythingbecause it's got some fantastic
brutalist culture andarchitecture about it too.
Speaker 2 (08:34):
Oh, that's it.
It's a property of discussion,but there's plenty of those in
Australia, for example down theSouthern Highlands and down the
South Coast, and the owners,when it comes time to sell them,
can't give them away Really.
Oh yeah, absolutely.
What's a romantic andinteresting property, what's a
smart buy is completelydifferent.
Speaker 1 (08:52):
Are they nuclear bunkers?
Though, they're not nuclearbunkers.
Therein lies the rub.
That's what I'm looking for.
That's what I want the marketfor.
So if anything comes acrossyour desk, give me a ring.
I'll start Googling right away.
Phil, what's the website?
If people want more info, yeah,harrispartnerscomau.
Nice to talk to you, my friend.
(09:12):
Thank you so much for that,peter O'Malley.
There with Harris Partners andthe state of the property for
the weekend.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.