December 10, 2025 • 38 mins
Hosts Ciaran O’Brien and Peter O’Malley wrap up a year where rate cuts calmed mortgage distress, yet inflation quietly returned through energy, services, and daily essentials. As AI reshapes jobs, rental markets hold steady, and policy reforms tighten compliance, we reflect on what defined 2025 — and what’s next for Sydney’s property landscape.
We also discuss:
- How rate cuts removed forced selling and lifted sentiment
- Inflation’s reacceleration through energy and service sectors
- Unemployment edging up as AI drives underemployment
- The tension between return-to-office mandates and automation risk
- Public sector hiring cushioning private sector softness
- First-home buyer incentives pulling forward demand
- Migration maintaining pressure on housing and rentals
- Rental conditions steady but poised for another upswing
- Investors chasing yield outside inner Sydney markets
- Tougher penalties and audits reshaping underquoting practices
- Reserve-price disclosure proposals threatening the auction model
- Vendor liability flagged as the missing accountability link
From all of us at Current Market Insights — Merry Christmas and a Happy New Year. We’ll see you in 2026.
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_03 (00:29):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, Kieran O'Brien,and with me is Mr.
Peter O'Malley.
Peter.
I today's a big episode.
This listeners is going to beour last one for 2025.
And what I I I want to start offby saying I think I've uh to
(00:50):
you, Peter, I've thoroughlyenjoyed the podcast this year.
I really think we've uh achievedsome good stuff.
We've punched out a great numberof episodes with some really
interesting topics.
Uh and I thought today's episodecould really just be a really
good opportunity to recap 2025as a year uh in property, what's
happened, what's happened morebroadly in Australia, what's
(01:10):
happened globally that'simpacted things here for us.
Uh, but a really good chance totie up what I think's been a
great year on the podcast.
Uh so if you'll indulge me, whydon't we spend this episode
going through uh and just fromthe beginning get a sense of
what's happened in 2025 thatreally has shaped uh what we see
around us and in some ways howthat could influence things as
(01:31):
we move into 2026.
SPEAKER_01 (01:33):
Oh, thanks, Kieran.
Look, if I uh uh uh assesssentiment in the marketplace
between um late 2024 and wherewe are now, late 2025, I think
one of the more subtle shifts inthe marketplace is the
disappearance, for the timebeing anyway, of of mortgage
(01:56):
distress and and and andhouseholds tapping the mat and
saying we've got to sell, wecan't afford to hang on any
longer.
Yeah.
So the the rate cut thathappened in February 2025 was
much much welcomed, much needed,and it was starting to get a
little bit sort of spicy andscary there, um, as far as I'm
(02:16):
concerned, in in late 2024, whenI was just seeing an increase in
people that were coming in formeetings, and some of them
wouldn't say it, but you couldsense it, and others were just
outright saying we can't affordto hang on to this property,
we've got to liquidate it.
We've got to liquidate thisinvestment property to save our
family home, or this is ourfamily home, we've got nothing
(02:38):
else to sell to save it, it'sgot to go and we've got a
downgrade.
So that I never saw any of thatat any stage during 2025, where
I saw, you know, not a lot ofit, but I saw too much of it by
the same token in 2024, that'sfor sure.
So that was the big shift.
That's what the three interestrate cuts throughout the year
did, is they gave the marketrelief and hope that the RBA
(03:02):
were listening to theirconcerns.
Uh, equally, um, we need to bepragmatic to know that we're now
finishing the year with uhinflation rising, I think out of
control again.
Um I I've just felt in the lastsix to eight months anecdotally
that uh um you know businesseseverywhere are putting their
(03:22):
prices up.
I don't think that's anecdotal.
On on uh on on Sunday, I went tobuy a loaf of sourdough, a plain
croissant, and an almondcroissant and was charged$30.
SPEAKER_03 (03:34):
Yeah.
Yeah, you I think you're goingto an artisan bakery, but your
point is true.
Uh things I I actually just hada conversation this morning with
uh cafe owner Barista, uh, and Ialways ask him every time I see
him how's business, you know,how's the foot traffic?
Are you keeping up with things?
And he he says, you know, youknow, every December, January is
quiet, which might be true, butmy anecdotal observation is
(03:56):
cafes tend to be busier, youknow, there's lots of people out
and about, they're doing things.
Uh and I said to him, I wonderif if this is a sign of people's
confidence starting to slide, uhthings getting a little bit too
expensive.
You know, I uh I know that mylocal cafe, you now pay over$30
for a big breakfast, which iscrazy to me because it's bacon
and sausage couple of days.
SPEAKER_01 (04:16):
That's right, yeah, it's a different cafe.
I paid$31 for an omelette.
Yeah, it's uh it's crazy.
In contrast, my wife doesn'tlisten to this.
No, I paid$31 for an omelette.
I'll be sleeping in the boot ofthe car tonight.
SPEAKER_03 (04:27):
I think uh she hears enough of you, Peter.
She wouldn't be listening tothis, that's for sure.
She's our number one listener,Kieran.
That's uh that's true.
Anecdotally, though, you know, Iuh as you know, I've I've been
overseas working recently andanother similar, very similar
country in economy to Australia.
Uh yet those kinds of uh uh Iguess luxuries you'd call them,
(04:48):
you know, eating out cafesincredibly cheap, uh, but the
cost of essential services andhealth and all those things are
through the roof.
Uh so it's interesting to methat there is there seems to be
inflationary pressureeverywhere, uh, but certain
countries it's hitting differenttargets.
And I, you know, I can't helpbut wonder if you know these
cafe owners, these businesses,some of them are doing it to
themselves uh by trying to takeadvantage, whereas others are
(05:10):
just trying to pay the increasedcost of the cost of energy is in
everything.
SPEAKER_01 (05:14):
Sadly.
And and uh that's that's uh formine, aside from global
inflation rising on the back ofum Trump's tariffs moves, which
is a deliberate move by Trump touh to to export inflation and
make things cheaper in America,um, is that uh he's exporting
inflation into countries likeAustralia, then you throw the
(05:35):
whole energy battle on top ofthat, and um firms have to
increase their prices tosurvive, sadly.
SPEAKER_03 (05:42):
Yeah, yeah.
I mean tariffs is a whole otherthing that happened in 2025.
I read recently that he's nowbeing sued by a whole range of
large US corporations uh to tryand get back all of the
pointless money that they'vespent offsetting tariffs.
Who knows where that's gonna gointo the new year?
But I I suspect they won't lasttoo much longer, which hopefully
will be good for the globaleconomy.
SPEAKER_01 (06:03):
Well, look, um let me say this is that um if you're
gonna take Donald Trump onthrough the courts, um, you'd
need a pretty good lawyerbecause his uh his track record
through the uh through thecourts is pretty strong.
SPEAKER_03 (06:14):
Yeah, yeah.
Have to take him on in a non-UScourt uh where the judges aren't
one-sided, but that's that's adifferent discussion.
Uh you're suggesting politicalcorruption or judicial
disruption, right?
I don't know if I'm suggestingit so much as uh just observing
it live.
Uh so the interest rate cuts,you're right, they made a pretty
big difference this year.
(06:35):
I know myself, I felt somerelief in my own circumstance,
and I can't be alone.
Uh, but I definitely feel likethe cost of living more
generally has increasedeverywhere else, which has made
it feel like I'm no better offnecessarily than I was.
Uh but that's not the only thingthat's happened this year.
You mentioned inflation.
Uh it did fall to 2.7%.
It is rising again.
There is a sentiment that it'sgoing to continue to rise.
(06:58):
Um, alongside of that, we oftentalk about the unemployment
rate.
I, I'll be honest, I haven'tbeen keeping track of the figure
lately.
How, and and we have talkedabout the risk of uh rising
unemployment and inflation, astagflationary kind of picture.
How has that picture evolved aswe've come towards the end of
the year compared with how itwas looking, you know, six or
eight months ago?
SPEAKER_01 (07:17):
Yeah, look, great, great point that you raised
there.
We we keep hearing, and I don'tknow if it'll play this way, but
we keep hearing and reading thatlarge corporates are doing as
much as they're doing as much asthey possibly can to outsource
jobs to to AI.
(07:39):
In times like this in the past,they were trying to outsource
domestic jobs to India andglobal outsourcing, whereas now
they're looking for to outsourceto AI.
And um the unemployment ratewent to a four-year high of 4.5%
in September.
And it was like, oh, maybe it'shappening here.
And there's a lot in the mediaabout banks that were saying
(08:02):
we're restructuring, we'redownsizing, we're doing
something different.
And the reality was they werejust outsourcing anything that
they could possibly outsource toAI.
I don't know about you, but itjust feels like I'm constantly
um speaking to computers thesedays.
You ring a major company, youget an AI receptionist, uh,
(08:23):
you're going through that.
Sometimes it's smoother thanothers, but the uh life talking
to a robot um just seems to beuh expanding.
Yeah.
And it's basically because majorcorporates are struggling to
grow their top lines.
Um so the only way that they canincrease the bottom line is by
cutting costs, and the easiestgains in terms of cutting costs
(08:44):
in the current environment isoutsourcing jobs to AI.
So that is a real risk for theeconomy, the property market uh
to households uh in 2026 formine, bar none, um, is
unemployment rises sharply.
Um what was interesting is thatuh uh unemployment rate between
(09:07):
September at a four-year high of4.5%, then fell back to 4.3% in
October, and everyone breathed asigh of relief and said, Oh,
maybe it was a rogue uh number.
Let's hope it was.
We don't know how many peoplewere re-employed but
underemployed.
So I do have personal friendsthat lost their jobs in recent
times and have gone on to getre-employed, but at a job that
(09:32):
was less than than what they'dbeen made redundant from, and
they nearly didn't get the jobthat they employed you know
inquired about because the theemployer thought that they were
um uh you know too highly gearedfor it.
Yeah, it was beneath their paygrade, and you'll stay here for
(09:52):
six months, find somethingbetter and move on.
You're overqualified.
That's the phrase I'm lookingfor.
You're overqualified for therole.
And um my friends who are inthat situation is like, I need
this role, I want this role,I'll stick at this role, give me
the role and I'll do a good jobfor you.
So there's a lot of uhunderemployment probably
happening where peoplestatistically um have a job, but
(10:14):
it's below their capacity, whichis not a place you want to be
when you're in your 30s, 40s, or50s and you've got peak
expenses, therefore you needpeak earnings.
SPEAKER_03 (10:23):
Yeah, I think about this often, Peter, as I move
through my 30s, 40s and youknow, soon enough 50s.
Uh interestingly, though, at thesame time, toward the end of I
think actually all through 2025,but particularly towards the
end, I've seen a ramp up in therhetoric around the end of work
from home as a concept.
Well, not the end necessarily,but at least the the downscaling
of work from home.
(10:44):
Uh, and I have to wonder howsome some of that will be driven
as, you know, we we've mentionedin the past that the need for
commercial buildings to remainviable, for businesses to hold
on to their assets, you know,one way they can sell them
offshore.
Um, but you you've talked abouthow you think work from home has
its downsides and and andupsides.
Uh, but I feel like for majorcorporations, that rhetoric is
(11:06):
changing.
And I can't help but wonder uhtowards the end of the year
whether or not it is part of agreater push to say, well, if
you're not willing to come backinto the office, that's fine.
I'm gonna replace you withSteve, the AI bot, uh, who cost
me very, very little to runother than tokens and doesn't
require anywhere to live.
Because I feel like thatsentiment is shifting.
SPEAKER_01 (11:24):
Look, uh I I think the sentiment is shifting.
Not every employee um is readingthe the play on this one.
So only this morning I saw thatInstagram has ordered all staff
back to the office five days aweek.
Yeah, had enough.
Not every workplace has theappeal as an employer that
(11:44):
Instagram have to to thatgeneration.
Um, I don't have children thatare working age young adults in
the workforce at the moment, butif I did, I would be saying to
them just because you can workfrom home at the moment does not
mean that you should.
I would encourage you to getinto the office at every
(12:07):
opportunity and build arelationship with your employer,
your boss, your middle manager,so that if major cuts in your
firm or your place of workplacetake place next year, you've got
a bond and a relationship withthe hierarchy that you're one of
the last to go if that's what'shappening.
SPEAKER_03 (12:25):
Oh, look, and aside from that, I personally feel
like being like I see the meritof both sides, but I also
nothing nothing beats havingthat good camaraderie and kind
of fellowship that you feel whenyou it's it's nicer to socialize
and go in and work with yourcolleagues and kind of build
some kind of as you say, a bond.
SPEAKER_01 (12:43):
I'm not speaking to that, I'm speaking to that
generation that's now growingup, work from home and think
that's normal.
And you being a bit older knowthat it's not normal and there
are benefits to being in theoffice.
And uh you saw uh Peter Dutton,you know, blow blow his toes off
during the federal election bysaying that he was going to
mandate for the public servicereturn to office, and his poll
(13:07):
numbers just imploded, andwhoever told him that thought
bubble was the right one to runwith um was was was absolutely
mad.
So I get the sense that bigcorporates are waiting for the
tide to turn in favor of them,as it always does.
It's like it's like when in theproperty market, when sellers
have got the advantage, buyershave to know that one day at
(13:30):
some stage the cycle will turnback in their favour.
When a market's really flat andbuyers have got the advantage,
they equally know they can't gettoo smart and too opportunistic
in their bids, because at somestage, whether it be an interest
rate cut or or somethinghappened in the economy, the
advantage will suddenly shiftback to the sellers.
It's the same in the employmentmarket.
(13:52):
Yes, there are staff that cansay to employers at the moment,
I'm not coming to work with you,I'm not staying working with you
if I can't work from home threeor five days a week, whatever it
might be.
And the employer has to sort ofbuckle to that.
But at some stage, theenvironment will change, and the
employer will be ruling theroost on this point.
(14:15):
And uh I think uh one needs tobe intelligently positioned for
when that happens.
SPEAKER_03 (14:20):
Well, I think you're right.
AI could actually be thatleverage because they can say
it's now reached a point of notautonomy, but you know,
capacity, intellect, ability,whatever it might be, uh, that
it can operate as efficiently ormore efficiently in some cases
than any one of you that arecosting us X amount of money.
SPEAKER_01 (14:37):
Efficiency, ability, intelligence is a they're all
interesting words with AIbecause I've held back on having
a view on AI.
Yeah, um, because I haven'tquite seen where it's going.
But um Yeah, what what I wouldsay is that corporates, unlike
small businesses like HarrisPartners or the next one down
(14:58):
the road, we we can't go tooheavy into AI because the
service levels with AI are notquite what they would be in many
ways, and the communicationlevels are not quite what they'd
be with a human.
Yeah, but big corporates, yourQantas, your banks, etc., um,
they don't care what yourcustomer experience is like.
(15:19):
Yeah.
If you have your primary concerndealt with by a computer, that's
satisfactory to them becausethey're dealing, they're dealing
at the end of the day with themasses.
Yeah.
unknown (15:32):
Yeah.
SPEAKER_03 (15:32):
That well, they could always escalate to a human
if if you aren't happy, right?
They've got the ability to beefficient at volume at scale,
yes, answering or fixing simpleproblems.
You know, Corus is a greatexample.
I recently did a bunch of stuffwith some flights and things
that I moved around.
It was all done through AI, andI use that term quite loosely
because it's, you know, it's notan intelligence necessarily.
Uh, but the bot is trained tohandle 99% of inquiries that I
(15:56):
can put forward, but it hasn't asimple escalation protocol if
there is something I need thatit can't solve, which is so much
more efficient for their bottomline.
SPEAKER_01 (16:03):
And that is great uh use of AI there from the
quantus.
But quantas don't really care ifsomeone doesn't like speaking
with AI.
Yeah.
Well, but you go and speak toVirgin's AI.
Yeah.
And it's the same with A and Z.
They don't care if you don'tlike their AI, because what are
you going to do?
Change banks and use Westpac'sAI?
And what are you going to do?
(16:23):
Choose your choose your bank oryour airline based on who's got
the best AI.
Yeah, of course.
You can see there that the bigcorporates where there's only a
few players in each space canhave this inflexible space with
AI, where the small businessthat's competing against a
thousand other small businesses,it's all about those, you know,
fine moments, those customerservice moments.
(16:44):
So how AI really changes andimpacts our lives will become
more evident in 2026.
But I'm not so sure efficiencyfor the customer is the same as
efficiency for the business whenit comes to AI.
SPEAKER_03 (17:01):
Oh, of course.
But again, as you say, thecorporates don't really care how
efficient.
Like they they want it to beseamless enough for the
customer, but as long as itreduces the amount of time they
have to spend on on you knowless profitable tasks, uh, is
obviously increased efficiencyfor them.
I'm loving this conversation,but we do, in the interest of
time, we do need to keep movingforward.
Uh, you did mention Peter Duttonuh briefly, and you know, I'm
(17:25):
sorry to our listeners that hadto hear his name again.
But uh one of the other thingsthat happened this year was the
Albanese government wasre-elected.
Um uh I guess what I'd love toget from you is what impact do
you think that that re-electionhas had, if any, on the property
market across the country?
Uh and do you think that the youknow Labour's stance or policies
has had much of a real impact?
SPEAKER_01 (17:47):
Oh, I think I think their uh position politically
has had an impact.
In the short term, uh it waspositive because the public
sector employs so many peoplenow, and that stopped the
unemployment rate from risinghigher.
So even even numbers that areout um today as as we record
show that the private sector isgetting squeezed, um, but it's
(18:10):
being picked up by the publicsector.
Um obviously the Albanesegovernment brought forward their
first home buyer incentives umuh to October 1, 2025, where I
don't think they were due to beintroduced until 2026.
And they expanded uh thegenerosity of of that scheme.
Um so yes, they've had theirimpact on on property.
(18:32):
Um it's the Albanese governmentuh since they came to power in
um was it May 2022?
I think it was.
Um uh it's the Albanesegovernment that have overseen
this massive migration surge uhpost-COVID.
Um that's having a huge impacton on the property market.
Um the Albanese government is uhuh pushing the agenda about
(18:56):
housing supply down through thenext two levels of government.
So yeah, uh John Howard used tosay if you change the
government, you change thecountry.
And um when forget the lastelection, the one you just
mentioned with Peter Dutton,when the country uh removed
Scott Morrison and put AnthonyAlbanese um uh into the chair,
(19:16):
they changed the country.
SPEAKER_03 (19:17):
Yeah.
Yeah.
SPEAKER_01 (19:19):
So yeah.
And the and the property marketfor that matter.
SPEAKER_03 (19:22):
Yeah, it's certainly it's certainly interesting.
And I I it's unrelated toproperty, but I'm was interested
to read not that long ago thatnow the uh Albanese government
they're they're going so hard onuh reshaping the health
department as well, and they'reputting so much pressure on
states to start providing moremoney.
It's a really interesting uhyeah, it feels like they they've
(19:42):
opened the floodgates and nowthey're scrambling and pushing
orders and blame around thecountry to different levels of
government to try and get themto clean up the mess and say,
well, actually we can't we can'ttreat all these people and we
can't house them all and wecan't feed them all and we can't
school them all, so just fix it.
You've got to fix it, and andyou know, we're not gonna give
you any money unless youcontribute more.
Which seems like a pretty that'sall in the name.
SPEAKER_01 (20:02):
Yeah, some people would see that as be mean.
Others would say that theproductivity rate per worker in
Australia is too low.
Yeah.
And and and I see that.
I I no matter where I turn, Isee unproductive workers who are
complacent in their place ofemployment.
Not everyone.
I'm not having a shot ateveryone, but you can just tell
that there is a there's a lackof efficiency per averaged out
(20:26):
per worker across the economy atthe moment that needs to be
addressed.
SPEAKER_03 (20:30):
I I see lots of it driving past construction on any
Sydney Road.
There is just overemployedpeople everywhere.
Yeah.
Everywhere.
Anyway, that's uh it's hot outthere.
SPEAKER_01 (20:40):
So I think I think the the government, as I said,
have employed so many peopleinto the public service that
they're trying to get theproductivity per person up
because the whole system ends upcollapsing on itself if you're
employing more and more peoplein the public service at the
same time.
The productivity is going down.
Yeah.
That's that's that's heading fora crash.
SPEAKER_03 (21:02):
I think the sentiment of everyone I know
who's ever oh I'm not gonna saythat's a generalized statement.
Lots of people I know who eitherhave or have sought out APS or
public service jobs do so inmany ways because of the
lifestyle and the reducedproductivity.
I I actually think that's anattractive element of that kind
of job, is you get securedleave, you get great conditions,
(21:22):
you're well protected, it's youknow, effectively unionized,
you've got a great like thereare so many perks to being a
tiny cog in an enormous machinewhere no one really notices if
you're doing 10% of the job.
Uh I feel like it's you know, inmany ways it's performing as
expected, which is a shame.
SPEAKER_01 (21:41):
It might be the case in some government jobs and not
so much in others.
So I'm not here to say thateveryone in the public service
is underperforming, butstatistically, no one can deny
that there is an increase in inyou know um a lack of
productivity.
SPEAKER_03 (21:59):
Oh, look, absolutely.
I you know, my only comment onthis government, all
governments, I honestly feellike it is so frustrating as
someone who is an observer ofpolitics and the decisions being
made that you know Albanese'skind of plan at the moment to
increase productivity, as yousay, to correct all these
issues.
(22:19):
It is always a game of catch-up.
You know, we make a poordecision, we ignore good advice,
we ignore the white paper orwhatever it might be that gives
logical suggestions for what weneed to do, and then every
government ends up chasing theirtail at an increased cost and a
reduced efficiency.
You know, it's the samescenario.
They don't provide enoughhealthcare, don't provide enough
(22:41):
housing, don't provide enoughwhatever, and then just stomp
your feet and scramble to get itall covered at an increased cost
to the taxpayer, at you know,just increased inconvenience.
It's really frustrating, it'sreally frustrating to constantly
see this happening.
SPEAKER_01 (22:55):
Well, you know, governments only react to
crisis, don't they?
Yeah.
And do you know what I mean?
Like the the the the crime isgood pre-election.
The crime in Victoria has beenbrewing for a long time, but
it's now only at a you knownuclear level that that that
it's going to rock theforthcoming state election down
(23:17):
there to its core.
SPEAKER_02 (23:19):
Yeah.
SPEAKER_01 (23:19):
Um, because it's got you know, people are frightened,
quite simply.
SPEAKER_03 (23:24):
I saw I have to laugh.
I saw a Sky News headlinerecently uh that was a photo of
Daniel Andrews scrambling into abuilding, and the tagline was
former Premier Andrews refusesto address his solution for
crime wave or something likethat.
Uh and it made me laugh becauseyou know, he's been out of
office for 900 days or some hugeamount.
(23:45):
Like he's been out of office fora long time.
Uh, yet, as you say, it's beenbrewing for so many years that
they're still looking to him,say, well, you know, you did
this, what are you gonna doabout it?
Which I like the whole thingjust seems comical because he's
not in power, regardless.
You know, anyway.
This just seems like it's thepolitical circus, Peter.
SPEAKER_01 (24:02):
Uh well, if it wasn't so serious, it would be a
circus.
But anyway, we won't get caughtin that today.
SPEAKER_03 (24:07):
No, we certainly won't.
Uh something else I want to talkto you about and get uh get your
recap on, something we touchedon all year at multiple points,
and something that I've beenclosely involved in over the
last few years is the rentalmarket in Sydney.
Um now, we know there or we'vetalked about the usual
inflection points where there'suh periods of migration,
pre-university, whatever itmight be, uh, and the types of
(24:29):
people coming into the countrythat are particularly uh strong
contenders for certainproperties, etc.
Um, and given we've talked aboutthe impact post-COVID on rental
prices, uh, what's your take onwhere the rental market sits as
we get to the end of 2025?
Has it changed substantiallyfrom the start of the year?
(24:50):
And is it likely to change into2025?
It was a stable year.
SPEAKER_01 (24:53):
It was a stable year, Kieran.
Can I go back to the point Imade about people coming in?
The point I made at the start ofthis recording, people coming
into the office and saying,tapping the mat and saying,
look, but this this investmentproperty's got to go.
We need to sell the investmentproperty to make sure we don't
have to sell our home.
Yeah.
Um, what was happening 12 monthsago is for every 10 investment
(25:17):
properties that we sold off ourrent roll, nine of them would
sell to an owner-occupier.
So the rental pool wasshrinking.
And I know one thing aboutsamples and trends, if it's
happening here, it's happeningin other real estate offices.
And sure enough, when you askaround the industry, that's what
was happening uh 12 months ago.
And and you know, 12 to 18months ago, people were uh
(25:37):
selling off the investmentproperty to reduce their debt
levels, and their investmentproperty was going to own or
occupiers.
That combined with the migrationsurge and the lack of new
housing, had the rental marketrising sharply.
Yeah.
There's still too many ummigrants coming into the country
relative to the housing that wehave and the housing, the little
(25:59):
housing that is being built.
So that underlying demand orpressure in the rental market is
still there.
But because of the fallinginterest rates and less vendors,
uh less landlords selling outthis year, the rental market was
not shrinking by the same degreein 2025 that it was in 2024.
(26:19):
Vacancy rates are very low.
One way to offset um the rentalmarket is people were leasing
out empty bedrooms, clubbingtogether, and doing shared
households, etc.
etc.
So as we finish the year, ifwe're doing a wrap on 2025, you
can say in some ways the rentalmarket was pretty boring.
(26:41):
Yeah.
But there's a lot of dry grassaround, and it's only gonna take
a match to send the rentalmarket on fire and rising again.
SPEAKER_03 (26:52):
And do you think that match is New Year's, you
know, student migration?
Is it an interest rate rise?
What's you know, what do youthink is gonna be the the start
of its inflation.
SPEAKER_01 (27:02):
Yeah, okay.
The costs are gone up, um, theholding costs um are going up.
Um, the property is now notproducing the income that I need
it to to offset the risingcosts.
Yep.
That's the first thing.
Then if interest rates go up,I'm not swallowing this interest
rate cut to subsidize.
(27:23):
This is the landlord mentalitynow.
I'm not swallowing 100% of thisinterest rate rise to give a
tenant a subsidized lifestyle,the rent has to go up.
SPEAKER_02 (27:33):
Yeah.
SPEAKER_01 (27:34):
Yeah.
That's what we saw last time in2022 to 2024 when they started
hiking rates.
And um, if they hike rates oreven if they leave rates on hold
through 2026, but inflationkeeps rising, landlords will
nearly be forced in their mindto put the rent up to offset the
(27:57):
inflationary rate.
That's a spiral because rentsrepresent the large one of the
largest components of the CPIbasket.
So that in itself will bepushing the inflation rate up.
SPEAKER_03 (28:09):
Which is what happened last time.
Correct.
Uh and then the conversationswill go again, you know, I don't
understand why my rent's goingup so much, it's only a half,
you know, 0.25% rent rise, youknow, rate rise or whatever, and
again we go through that cycle.
Uh all throughout 2025, I askedyou this question.
If landlords find themselves uhdeciding they can't increase
(28:30):
rents to a point that, you know,is at the market level or they
can't hold a tenant and theyneed to sell out, as we close
out 2025, are there investorssitting around on the sidelines
at the moment, do you think, uh,that would snap up either now or
early into 2026 investments, oris that market still just not in
the right shape?
SPEAKER_01 (28:50):
Not not in Sydney.
I was at a real estate nationalreal estate conference last
week, and some of those agentsin some of those markets are
seeing investors come into them.
But um, you know, we're talking,you know, properties in the sort
of uh four to eight hundredthousand dollar range with a
five-six percent yield.
Well that's that's that's what'shappening, that's what's
happening there.
(29:10):
But you know, if you're sayingin inner city Sydney, um are we
seeing that sort of behaviourfrom investors that are
opportunists on the sidelinesready to come in?
No.
The state government, with theirincreased regulation to protect
tenants, um, have drivenlandlords into other, you know,
potential landlords into otherasset classes.
So this is what I said allalong.
(29:31):
I have no problem withprotecting tenants' rights, but
what you need to acknowledge themoment you start fiddling with
tenants' rights is the more youpush it in favour of the
tenants, in the majority ofinstances you're making it less
favorable for the landlord.
SPEAKER_03 (29:47):
Yeah, and as you say, it's very hard to justify a
one and a half million dollarproperty on a 2% yield in Sydney
when the ongoing costs are sohigh.
As we wrap up this episode andwith it 2025, the other major
thing that's really burstthrough the real estate market
this year has been underquoting.
Um, we have talked a lot aboutcertain instances, certain
(30:10):
agencies.
There's been headlines, youknow, we've discussed a lot
about what has happened wherethe government's made little
changes, where the regulators,you know, shown some interest,
potentially for the first timeuh in a long time.
Can you just give our listenersa bit of a recap?
Uh, not so much a timelinenecessarily, but what's happened
in underquoting this year?
And as we close out the year,where are we at on this this
(30:30):
battle?
And where do you think the uhthe regulator's going to head in
2026?
SPEAKER_01 (30:35):
Oh, the the regulator's going to head into
real estate offices.
They've been in and out of realestate offices literally for the
back end of the year.
Good.
Yeah.
So uh the Sydney Morning Heraldand the Melbourne Age um through
their uh uh story Blind Bidding,uh investigation, blind bidding
(30:55):
for the back half of the yearreally brought this into uh
people's uh uh awareness, if youlike.
But uh some of the things thathave gone out there that people
have probably heard in the pressis the penalties for
underquoting have risen from$22,000 to$110,000.
Suspensions of licenses,including um one of the city's
most prolific writers ofbusiness.
(31:18):
He's still suspended uh at themoment, I believe.
Yep.
Um uh twenty-five agencies areunder deep investigation in New
South Wales.
Um they apparently did a blitzon the Central Coast, the
Department of Fair Trade, lastweek and um have uh snagged
another person by asking forfiles.
(31:39):
Um so if they're getting to thecrux of underquoting, if they're
getting to the crux ofunderquoting and getting the
real culprits that are uh youknow bringing this tactic into
the marketplace, I'm all forthat.
Yeah.
Um I I saw a real estate agentdown in Melbourne earlier in the
year that was done forunderquoting, but it was
(32:02):
administrative, it was apaperwork issue.
That's you know, because a realestate agent is paperwork is
sloppy, does not mean thatthey're a rampant underquota
misleading buyers.
Yeah.
Um so I just hope that they'renot looking for scapegoats and
trying to you know have umPyrrhic victories here over
(32:23):
people who are not really doingthe wrong thing but have been
caught out from anadministrative perspective.
In Victoria, they're gonna makereal estate agents as it stands
advertise the reserve priceseven days out from the auction.
That will it's a great idea.
It's a great idea and it'llabsolutely shatter the auction
system because the auctionsystem relies on the agent
(32:45):
promising a high price to thevendor to get the listing and
saying the best conduit toachieve that price is an
auction, and then getting thebuyers along by underquoting.
And when the buyers on thewhole, not every instance, but
on the whole, when the buyersknow what the vendors are really
looking for, they won't turn up.
SPEAKER_02 (33:02):
Yeah.
SPEAKER_01 (33:03):
So if if that's implemented in Victoria, which I
I don't care whether it is or itisn't, that will absolutely
shatter uh the auction system.
They haven't said in New SouthWales they'll go to that degree.
I think the regulatorsunderstand that the real estate
agents have a job to bridge agap between the buyer and the
seller.
And if you ask a vendor sevendays before the auction what's
(33:24):
your reserve price, it is goingto be higher seven days before
the auction than what it isunder the pressure of the moment
on the day.
And vendors every Saturday umdrop their reserve price during
the auction to get a sale.
Yeah.
So um uh I again don't mindwhether the New South Wales do
or don't introduce that measure,but it will make running
(33:46):
auctions very, very difficult.
Um, what I do know is thatthere's 25 firms that um um have
been tracked by AI and um youknow high nuance data, and I
know this for a fact.
Um they've they've the the firmshave been tracked, and the top
25 officers in terms of standingout as having real questions to
(34:10):
answer around underquoting arebeing investigated as we speak.
So we'll see where that goes.
SPEAKER_03 (34:15):
Yeah, we'll certainly uh we'll certainly
have to follow up with thatstory next year when we do get
back into things.
Uh my final question for youthen, Peter, for 2025.
If publishing the reserve priceout seven days before uh is
potentially like it seems likeit could be a good option, maybe
it's a bad option, we don'tentirely know.
(34:35):
In your experience, and you'vebeen doing this for a long time,
do you have any thoughts on whatmight be the most elegant
solution that fair trading couldimplement to solve this problem
once and for all?
So that agencies just don't feelthe need to underquote.
SPEAKER_01 (34:51):
Uh agents will always feel the need to
underquote.
I said this before.
Why do agents underquote Kieran?
Because it works.
Because it works.
Yeah.
So because it works, but if itdidn't work, it might be it
might be a low-rank, suspicious,dirty, filthy sales tactic, but
the reality is it works.
(35:12):
Yeah.
Which is why agents do it.
SPEAKER_03 (35:15):
It's why Black Friday works, you know, get them
in the door, low price, youknow, put the goods, the the
essentials at the back of theshop, you know, that kind of
thing.
SPEAKER_01 (35:22):
The harsh reality is once one agent in a marketplace
starts underquoting, theyinadvertently force the
competitors to do the same.
Yeah.
We've said it before, you've gottwo two million dollar houses.
One's promoted at two million,the other's promoted at 1.6.
Where do you think the 30 buyersare going on Saturday morning?
(35:43):
Yeah, well, of course.
They're gonna go to the cheaperone thinking there's a bargain.
Yeah, and yep, some of them willsay this is gonna go for a lot
more, some of them will say, Oh,maybe we can get it for one
nine.
They can't help themselvesthinking they might get a
bargain on the day, but it justdraws people in all the time.
Yeah, yeah.
So um, I said in 2015 when NewSouth Wales had its first
(36:06):
earnest attempt at stoppingunderquoting, um, that if these
measures are successful, thisthese measures will will blow up
the auction system, but theyweren't successful, and
underquoting has got worse since2015, not better.
Um one of the things that hasstill not been mentioned by
anyone is the vendor needs to beon the hook as far as penalties
(36:31):
go.
Yeah if they are complicit inunderquoting.
So the age, if anyone um umhasn't heard it, you should look
around for it.
The age recorded a real estateagent from Marshall White, which
is a massive real estate firm inMelbourne, coaching a vendor on
how to underquote and how tofudge the paperwork and the
(36:52):
merits of doing so.
SPEAKER_02 (36:53):
Yeah.
SPEAKER_01 (36:54):
And the vendor went along with it, and then the
recording was released toMarshall White, and they were
forced to terminate thesalesperson in question and
said, that's not company policy,this is a rogue employee.
I'll leave that for others tojudge.
But the reality is that thevendors are complicit in the
underquoting, and the way theystopped dummy bidding was saying
(37:16):
if any vendor or real estateagent is caught engaging in
dummy bidding, they will befined.
Where at the moment only thereal estate agent can be fined
for underquoting.
SPEAKER_03 (37:27):
Yeah.
Yeah, look, I certainly hopethat uh fair trading continue to
bring the hammer down here andmake some significant changes to
the industry because it uh cancertainly use a lot of cleaning
up.
Look, uh, really great recap,Peter.
It's um it's been uh a pleasureworking on the podcast with you
in 2025.
We've covered across a wholerange of topics, uh, and I think
we've brought some goodinformation out to our
(37:49):
listeners.
So I thank you as always forcoming in today and uh for
coming in every time we we catchup and talk.
My pleasure, Kieran, all thebest and a Merry Christmas.
All the best and Merry Christmasto you, and a very big thank you
to all of our listeners forbeing with us through 2025.
Uh, we wish you all from theteam here at Current Market
Insights, we wish you a MerryChristmas and a happy new year,
and we hope to see all of younext year.
(38:10):
As always, thanks for listening,and we'll talk to you next time.
SPEAKER_00 (38:13):
Thanks for joining us on the current market and
summons pop and cups.
Hello and welcome to another edition of Current
Market Insights.
I'm your host, Kieran O'Brien,and with me is Mr.
Peter O'Malley.
Peter.
I today's a big episode.
This listeners is going to beour last one for 2025.
And what I I I want to start offby saying I think I've uh to
(00:50):
you, Peter, I've thoroughlyenjoyed the podcast this year.
I really think we've uh achievedsome good stuff.
We've punched out a great numberof episodes with some really
interesting topics.
Uh and I thought today's episodecould really just be a really
good opportunity to recap 2025as a year uh in property, what's
happened, what's happened morebroadly in Australia, what's
(01:10):
happened globally that'simpacted things here for us.
Uh, but a really good chance totie up what I think's been a
great year on the podcast.
Uh so if you'll indulge me, whydon't we spend this episode
going through uh and just fromthe beginning get a sense of
what's happened in 2025 thatreally has shaped uh what we see
around us and in some ways howthat could influence things as
(01:31):
we move into 2026.
SPEAKER_01 (01:33):
Oh, thanks, Kieran.
Look, if I uh uh uh assesssentiment in the marketplace
between um late 2024 and wherewe are now, late 2025, I think
one of the more subtle shifts inthe marketplace is the
disappearance, for the timebeing anyway, of of mortgage
(01:56):
distress and and and andhouseholds tapping the mat and
saying we've got to sell, wecan't afford to hang on any
longer.
Yeah.
So the the rate cut thathappened in February 2025 was
much much welcomed, much needed,and it was starting to get a
little bit sort of spicy andscary there, um, as far as I'm
(02:16):
concerned, in in late 2024, whenI was just seeing an increase in
people that were coming in formeetings, and some of them
wouldn't say it, but you couldsense it, and others were just
outright saying we can't affordto hang on to this property,
we've got to liquidate it.
We've got to liquidate thisinvestment property to save our
family home, or this is ourfamily home, we've got nothing
(02:38):
else to sell to save it, it'sgot to go and we've got a
downgrade.
So that I never saw any of thatat any stage during 2025, where
I saw, you know, not a lot ofit, but I saw too much of it by
the same token in 2024, that'sfor sure.
So that was the big shift.
That's what the three interestrate cuts throughout the year
did, is they gave the marketrelief and hope that the RBA
(03:02):
were listening to theirconcerns.
Uh, equally, um, we need to bepragmatic to know that we're now
finishing the year with uhinflation rising, I think out of
control again.
Um I I've just felt in the lastsix to eight months anecdotally
that uh um you know businesseseverywhere are putting their
(03:22):
prices up.
I don't think that's anecdotal.
On on uh on on Sunday, I went tobuy a loaf of sourdough, a plain
croissant, and an almondcroissant and was charged$30.
SPEAKER_03 (03:34):
Yeah.
Yeah, you I think you're goingto an artisan bakery, but your
point is true.
Uh things I I actually just hada conversation this morning with
uh cafe owner Barista, uh, and Ialways ask him every time I see
him how's business, you know,how's the foot traffic?
Are you keeping up with things?
And he he says, you know, youknow, every December, January is
quiet, which might be true, butmy anecdotal observation is
(03:56):
cafes tend to be busier, youknow, there's lots of people out
and about, they're doing things.
Uh and I said to him, I wonderif if this is a sign of people's
confidence starting to slide, uhthings getting a little bit too
expensive.
You know, I uh I know that mylocal cafe, you now pay over$30
for a big breakfast, which iscrazy to me because it's bacon
and sausage couple of days.
SPEAKER_01 (04:16):
That's right, yeah, it's a different cafe.
I paid$31 for an omelette.
Yeah, it's uh it's crazy.
In contrast, my wife doesn'tlisten to this.
No, I paid$31 for an omelette.
I'll be sleeping in the boot ofthe car tonight.
SPEAKER_03 (04:27):
I think uh she hears enough of you, Peter.
She wouldn't be listening tothis, that's for sure.
She's our number one listener,Kieran.
That's uh that's true.
Anecdotally, though, you know, Iuh as you know, I've I've been
overseas working recently andanother similar, very similar
country in economy to Australia.
Uh yet those kinds of uh uh Iguess luxuries you'd call them,
(04:48):
you know, eating out cafesincredibly cheap, uh, but the
cost of essential services andhealth and all those things are
through the roof.
Uh so it's interesting to methat there is there seems to be
inflationary pressureeverywhere, uh, but certain
countries it's hitting differenttargets.
And I, you know, I can't helpbut wonder if you know these
cafe owners, these businesses,some of them are doing it to
themselves uh by trying to takeadvantage, whereas others are
(05:10):
just trying to pay the increasedcost of the cost of energy is in
everything.
SPEAKER_01 (05:14):
Sadly.
And and uh that's that's uh formine, aside from global
inflation rising on the back ofum Trump's tariffs moves, which
is a deliberate move by Trump touh to to export inflation and
make things cheaper in America,um, is that uh he's exporting
inflation into countries likeAustralia, then you throw the
(05:35):
whole energy battle on top ofthat, and um firms have to
increase their prices tosurvive, sadly.
SPEAKER_03 (05:42):
Yeah, yeah.
I mean tariffs is a whole otherthing that happened in 2025.
I read recently that he's nowbeing sued by a whole range of
large US corporations uh to tryand get back all of the
pointless money that they'vespent offsetting tariffs.
Who knows where that's gonna gointo the new year?
But I I suspect they won't lasttoo much longer, which hopefully
will be good for the globaleconomy.
SPEAKER_01 (06:03):
Well, look, um let me say this is that um if you're
gonna take Donald Trump onthrough the courts, um, you'd
need a pretty good lawyerbecause his uh his track record
through the uh through thecourts is pretty strong.
SPEAKER_03 (06:14):
Yeah, yeah.
Have to take him on in a non-UScourt uh where the judges aren't
one-sided, but that's that's adifferent discussion.
Uh you're suggesting politicalcorruption or judicial
disruption, right?
I don't know if I'm suggestingit so much as uh just observing
it live.
Uh so the interest rate cuts,you're right, they made a pretty
big difference this year.
(06:35):
I know myself, I felt somerelief in my own circumstance,
and I can't be alone.
Uh, but I definitely feel likethe cost of living more
generally has increasedeverywhere else, which has made
it feel like I'm no better offnecessarily than I was.
Uh but that's not the only thingthat's happened this year.
You mentioned inflation.
Uh it did fall to 2.7%.
It is rising again.
There is a sentiment that it'sgoing to continue to rise.
(06:58):
Um, alongside of that, we oftentalk about the unemployment
rate.
I, I'll be honest, I haven'tbeen keeping track of the figure
lately.
How, and and we have talkedabout the risk of uh rising
unemployment and inflation, astagflationary kind of picture.
How has that picture evolved aswe've come towards the end of
the year compared with how itwas looking, you know, six or
eight months ago?
SPEAKER_01 (07:17):
Yeah, look, great, great point that you raised
there.
We we keep hearing, and I don'tknow if it'll play this way, but
we keep hearing and reading thatlarge corporates are doing as
much as they're doing as much asthey possibly can to outsource
jobs to to AI.
(07:39):
In times like this in the past,they were trying to outsource
domestic jobs to India andglobal outsourcing, whereas now
they're looking for to outsourceto AI.
And um the unemployment ratewent to a four-year high of 4.5%
in September.
And it was like, oh, maybe it'shappening here.
And there's a lot in the mediaabout banks that were saying
(08:02):
we're restructuring, we'redownsizing, we're doing
something different.
And the reality was they werejust outsourcing anything that
they could possibly outsource toAI.
I don't know about you, but itjust feels like I'm constantly
um speaking to computers thesedays.
You ring a major company, youget an AI receptionist, uh,
(08:23):
you're going through that.
Sometimes it's smoother thanothers, but the uh life talking
to a robot um just seems to beuh expanding.
Yeah.
And it's basically because majorcorporates are struggling to
grow their top lines.
Um so the only way that they canincrease the bottom line is by
cutting costs, and the easiestgains in terms of cutting costs
(08:44):
in the current environment isoutsourcing jobs to AI.
So that is a real risk for theeconomy, the property market uh
to households uh in 2026 formine, bar none, um, is
unemployment rises sharply.
Um what was interesting is thatuh uh unemployment rate between
(09:07):
September at a four-year high of4.5%, then fell back to 4.3% in
October, and everyone breathed asigh of relief and said, Oh,
maybe it was a rogue uh number.
Let's hope it was.
We don't know how many peoplewere re-employed but
underemployed.
So I do have personal friendsthat lost their jobs in recent
times and have gone on to getre-employed, but at a job that
(09:32):
was less than than what they'dbeen made redundant from, and
they nearly didn't get the jobthat they employed you know
inquired about because the theemployer thought that they were
um uh you know too highly gearedfor it.
Yeah, it was beneath their paygrade, and you'll stay here for
(09:52):
six months, find somethingbetter and move on.
You're overqualified.
That's the phrase I'm lookingfor.
You're overqualified for therole.
And um my friends who are inthat situation is like, I need
this role, I want this role,I'll stick at this role, give me
the role and I'll do a good jobfor you.
So there's a lot of uhunderemployment probably
happening where peoplestatistically um have a job, but
(10:14):
it's below their capacity, whichis not a place you want to be
when you're in your 30s, 40s, or50s and you've got peak
expenses, therefore you needpeak earnings.
SPEAKER_03 (10:23):
Yeah, I think about this often, Peter, as I move
through my 30s, 40s and youknow, soon enough 50s.
Uh interestingly, though, at thesame time, toward the end of I
think actually all through 2025,but particularly towards the
end, I've seen a ramp up in therhetoric around the end of work
from home as a concept.
Well, not the end necessarily,but at least the the downscaling
of work from home.
(10:44):
Uh, and I have to wonder howsome some of that will be driven
as, you know, we we've mentionedin the past that the need for
commercial buildings to remainviable, for businesses to hold
on to their assets, you know,one way they can sell them
offshore.
Um, but you you've talked abouthow you think work from home has
its downsides and and andupsides.
Uh, but I feel like for majorcorporations, that rhetoric is
(11:06):
changing.
And I can't help but wonder uhtowards the end of the year
whether or not it is part of agreater push to say, well, if
you're not willing to come backinto the office, that's fine.
I'm gonna replace you withSteve, the AI bot, uh, who cost
me very, very little to runother than tokens and doesn't
require anywhere to live.
Because I feel like thatsentiment is shifting.
SPEAKER_01 (11:24):
Look, uh I I think the sentiment is shifting.
Not every employee um is readingthe the play on this one.
So only this morning I saw thatInstagram has ordered all staff
back to the office five days aweek.
Yeah, had enough.
Not every workplace has theappeal as an employer that
(11:44):
Instagram have to to thatgeneration.
Um, I don't have children thatare working age young adults in
the workforce at the moment, butif I did, I would be saying to
them just because you can workfrom home at the moment does not
mean that you should.
I would encourage you to getinto the office at every
(12:07):
opportunity and build arelationship with your employer,
your boss, your middle manager,so that if major cuts in your
firm or your place of workplacetake place next year, you've got
a bond and a relationship withthe hierarchy that you're one of
the last to go if that's what'shappening.
SPEAKER_03 (12:25):
Oh, look, and aside from that, I personally feel
like being like I see the meritof both sides, but I also
nothing nothing beats havingthat good camaraderie and kind
of fellowship that you feel whenyou it's it's nicer to socialize
and go in and work with yourcolleagues and kind of build
some kind of as you say, a bond.
SPEAKER_01 (12:43):
I'm not speaking to that, I'm speaking to that
generation that's now growingup, work from home and think
that's normal.
And you being a bit older knowthat it's not normal and there
are benefits to being in theoffice.
And uh you saw uh Peter Dutton,you know, blow blow his toes off
during the federal election bysaying that he was going to
mandate for the public servicereturn to office, and his poll
(13:07):
numbers just imploded, andwhoever told him that thought
bubble was the right one to runwith um was was was absolutely
mad.
So I get the sense that bigcorporates are waiting for the
tide to turn in favor of them,as it always does.
It's like it's like when in theproperty market, when sellers
have got the advantage, buyershave to know that one day at
(13:30):
some stage the cycle will turnback in their favour.
When a market's really flat andbuyers have got the advantage,
they equally know they can't gettoo smart and too opportunistic
in their bids, because at somestage, whether it be an interest
rate cut or or somethinghappened in the economy, the
advantage will suddenly shiftback to the sellers.
It's the same in the employmentmarket.
(13:52):
Yes, there are staff that cansay to employers at the moment,
I'm not coming to work with you,I'm not staying working with you
if I can't work from home threeor five days a week, whatever it
might be.
And the employer has to sort ofbuckle to that.
But at some stage, theenvironment will change, and the
employer will be ruling theroost on this point.
(14:15):
And uh I think uh one needs tobe intelligently positioned for
when that happens.
SPEAKER_03 (14:20):
Well, I think you're right.
AI could actually be thatleverage because they can say
it's now reached a point of notautonomy, but you know,
capacity, intellect, ability,whatever it might be, uh, that
it can operate as efficiently ormore efficiently in some cases
than any one of you that arecosting us X amount of money.
SPEAKER_01 (14:37):
Efficiency, ability, intelligence is a they're all
interesting words with AIbecause I've held back on having
a view on AI.
Yeah, um, because I haven'tquite seen where it's going.
But um Yeah, what what I wouldsay is that corporates, unlike
small businesses like HarrisPartners or the next one down
(14:58):
the road, we we can't go tooheavy into AI because the
service levels with AI are notquite what they would be in many
ways, and the communicationlevels are not quite what they'd
be with a human.
Yeah, but big corporates, yourQantas, your banks, etc., um,
they don't care what yourcustomer experience is like.
(15:19):
Yeah.
If you have your primary concerndealt with by a computer, that's
satisfactory to them becausethey're dealing, they're dealing
at the end of the day with themasses.
Yeah.
unknown (15:32):
Yeah.
SPEAKER_03 (15:32):
That well, they could always escalate to a human
if if you aren't happy, right?
They've got the ability to beefficient at volume at scale,
yes, answering or fixing simpleproblems.
You know, Corus is a greatexample.
I recently did a bunch of stuffwith some flights and things
that I moved around.
It was all done through AI, andI use that term quite loosely
because it's, you know, it's notan intelligence necessarily.
Uh, but the bot is trained tohandle 99% of inquiries that I
(15:56):
can put forward, but it hasn't asimple escalation protocol if
there is something I need thatit can't solve, which is so much
more efficient for their bottomline.
SPEAKER_01 (16:03):
And that is great uh use of AI there from the
quantus.
But quantas don't really care ifsomeone doesn't like speaking
with AI.
Yeah.
Well, but you go and speak toVirgin's AI.
Yeah.
And it's the same with A and Z.
They don't care if you don'tlike their AI, because what are
you going to do?
Change banks and use Westpac'sAI?
And what are you going to do?
(16:23):
Choose your choose your bank oryour airline based on who's got
the best AI.
Yeah, of course.
You can see there that the bigcorporates where there's only a
few players in each space canhave this inflexible space with
AI, where the small businessthat's competing against a
thousand other small businesses,it's all about those, you know,
fine moments, those customerservice moments.
(16:44):
So how AI really changes andimpacts our lives will become
more evident in 2026.
But I'm not so sure efficiencyfor the customer is the same as
efficiency for the business whenit comes to AI.
SPEAKER_03 (17:01):
Oh, of course.
But again, as you say, thecorporates don't really care how
efficient.
Like they they want it to beseamless enough for the
customer, but as long as itreduces the amount of time they
have to spend on on you knowless profitable tasks, uh, is
obviously increased efficiencyfor them.
I'm loving this conversation,but we do, in the interest of
time, we do need to keep movingforward.
Uh, you did mention Peter Duttonuh briefly, and you know, I'm
(17:25):
sorry to our listeners that hadto hear his name again.
But uh one of the other thingsthat happened this year was the
Albanese government wasre-elected.
Um uh I guess what I'd love toget from you is what impact do
you think that that re-electionhas had, if any, on the property
market across the country?
Uh and do you think that the youknow Labour's stance or policies
has had much of a real impact?
SPEAKER_01 (17:47):
Oh, I think I think their uh position politically
has had an impact.
In the short term, uh it waspositive because the public
sector employs so many peoplenow, and that stopped the
unemployment rate from risinghigher.
So even even numbers that areout um today as as we record
show that the private sector isgetting squeezed, um, but it's
(18:10):
being picked up by the publicsector.
Um obviously the Albanesegovernment brought forward their
first home buyer incentives umuh to October 1, 2025, where I
don't think they were due to beintroduced until 2026.
And they expanded uh thegenerosity of of that scheme.
Um so yes, they've had theirimpact on on property.
(18:32):
Um it's the Albanese governmentuh since they came to power in
um was it May 2022?
I think it was.
Um uh it's the Albanesegovernment that have overseen
this massive migration surge uhpost-COVID.
Um that's having a huge impacton on the property market.
Um the Albanese government is uhuh pushing the agenda about
(18:56):
housing supply down through thenext two levels of government.
So yeah, uh John Howard used tosay if you change the
government, you change thecountry.
And um when forget the lastelection, the one you just
mentioned with Peter Dutton,when the country uh removed
Scott Morrison and put AnthonyAlbanese um uh into the chair,
(19:16):
they changed the country.
SPEAKER_03 (19:17):
Yeah.
Yeah.
SPEAKER_01 (19:19):
So yeah.
And the and the property marketfor that matter.
SPEAKER_03 (19:22):
Yeah, it's certainly it's certainly interesting.
And I I it's unrelated toproperty, but I'm was interested
to read not that long ago thatnow the uh Albanese government
they're they're going so hard onuh reshaping the health
department as well, and they'reputting so much pressure on
states to start providing moremoney.
It's a really interesting uhyeah, it feels like they they've
(19:42):
opened the floodgates and nowthey're scrambling and pushing
orders and blame around thecountry to different levels of
government to try and get themto clean up the mess and say,
well, actually we can't we can'ttreat all these people and we
can't house them all and wecan't feed them all and we can't
school them all, so just fix it.
You've got to fix it, and andyou know, we're not gonna give
you any money unless youcontribute more.
Which seems like a pretty that'sall in the name.
SPEAKER_01 (20:02):
Yeah, some people would see that as be mean.
Others would say that theproductivity rate per worker in
Australia is too low.
Yeah.
And and and I see that.
I I no matter where I turn, Isee unproductive workers who are
complacent in their place ofemployment.
Not everyone.
I'm not having a shot ateveryone, but you can just tell
that there is a there's a lackof efficiency per averaged out
(20:26):
per worker across the economy atthe moment that needs to be
addressed.
SPEAKER_03 (20:30):
I I see lots of it driving past construction on any
Sydney Road.
There is just overemployedpeople everywhere.
Yeah.
Everywhere.
Anyway, that's uh it's hot outthere.
SPEAKER_01 (20:40):
So I think I think the the government, as I said,
have employed so many peopleinto the public service that
they're trying to get theproductivity per person up
because the whole system ends upcollapsing on itself if you're
employing more and more peoplein the public service at the
same time.
The productivity is going down.
Yeah.
That's that's that's heading fora crash.
SPEAKER_03 (21:02):
I think the sentiment of everyone I know
who's ever oh I'm not gonna saythat's a generalized statement.
Lots of people I know who eitherhave or have sought out APS or
public service jobs do so inmany ways because of the
lifestyle and the reducedproductivity.
I I actually think that's anattractive element of that kind
of job, is you get securedleave, you get great conditions,
(21:22):
you're well protected, it's youknow, effectively unionized,
you've got a great like thereare so many perks to being a
tiny cog in an enormous machinewhere no one really notices if
you're doing 10% of the job.
Uh I feel like it's you know, inmany ways it's performing as
expected, which is a shame.
SPEAKER_01 (21:41):
It might be the case in some government jobs and not
so much in others.
So I'm not here to say thateveryone in the public service
is underperforming, butstatistically, no one can deny
that there is an increase in inyou know um a lack of
productivity.
SPEAKER_03 (21:59):
Oh, look, absolutely.
I you know, my only comment onthis government, all
governments, I honestly feellike it is so frustrating as
someone who is an observer ofpolitics and the decisions being
made that you know Albanese'skind of plan at the moment to
increase productivity, as yousay, to correct all these
issues.
(22:19):
It is always a game of catch-up.
You know, we make a poordecision, we ignore good advice,
we ignore the white paper orwhatever it might be that gives
logical suggestions for what weneed to do, and then every
government ends up chasing theirtail at an increased cost and a
reduced efficiency.
You know, it's the samescenario.
They don't provide enoughhealthcare, don't provide enough
(22:41):
housing, don't provide enoughwhatever, and then just stomp
your feet and scramble to get itall covered at an increased cost
to the taxpayer, at you know,just increased inconvenience.
It's really frustrating, it'sreally frustrating to constantly
see this happening.
SPEAKER_01 (22:55):
Well, you know, governments only react to
crisis, don't they?
Yeah.
And do you know what I mean?
Like the the the the crime isgood pre-election.
The crime in Victoria has beenbrewing for a long time, but
it's now only at a you knownuclear level that that that
it's going to rock theforthcoming state election down
(23:17):
there to its core.
SPEAKER_02 (23:19):
Yeah.
SPEAKER_01 (23:19):
Um, because it's got you know, people are frightened,
quite simply.
SPEAKER_03 (23:24):
I saw I have to laugh.
I saw a Sky News headlinerecently uh that was a photo of
Daniel Andrews scrambling into abuilding, and the tagline was
former Premier Andrews refusesto address his solution for
crime wave or something likethat.
Uh and it made me laugh becauseyou know, he's been out of
office for 900 days or some hugeamount.
(23:45):
Like he's been out of office fora long time.
Uh, yet, as you say, it's beenbrewing for so many years that
they're still looking to him,say, well, you know, you did
this, what are you gonna doabout it?
Which I like the whole thingjust seems comical because he's
not in power, regardless.
You know, anyway.
This just seems like it's thepolitical circus, Peter.
SPEAKER_01 (24:02):
Uh well, if it wasn't so serious, it would be a
circus.
But anyway, we won't get caughtin that today.
SPEAKER_03 (24:07):
No, we certainly won't.
Uh something else I want to talkto you about and get uh get your
recap on, something we touchedon all year at multiple points,
and something that I've beenclosely involved in over the
last few years is the rentalmarket in Sydney.
Um now, we know there or we'vetalked about the usual
inflection points where there'suh periods of migration,
pre-university, whatever itmight be, uh, and the types of
(24:29):
people coming into the countrythat are particularly uh strong
contenders for certainproperties, etc.
Um, and given we've talked aboutthe impact post-COVID on rental
prices, uh, what's your take onwhere the rental market sits as
we get to the end of 2025?
Has it changed substantiallyfrom the start of the year?
(24:50):
And is it likely to change into2025?
It was a stable year.
SPEAKER_01 (24:53):
It was a stable year, Kieran.
Can I go back to the point Imade about people coming in?
The point I made at the start ofthis recording, people coming
into the office and saying,tapping the mat and saying,
look, but this this investmentproperty's got to go.
We need to sell the investmentproperty to make sure we don't
have to sell our home.
Yeah.
Um, what was happening 12 monthsago is for every 10 investment
(25:17):
properties that we sold off ourrent roll, nine of them would
sell to an owner-occupier.
So the rental pool wasshrinking.
And I know one thing aboutsamples and trends, if it's
happening here, it's happeningin other real estate offices.
And sure enough, when you askaround the industry, that's what
was happening uh 12 months ago.
And and you know, 12 to 18months ago, people were uh
(25:37):
selling off the investmentproperty to reduce their debt
levels, and their investmentproperty was going to own or
occupiers.
That combined with the migrationsurge and the lack of new
housing, had the rental marketrising sharply.
Yeah.
There's still too many ummigrants coming into the country
relative to the housing that wehave and the housing, the little
(25:59):
housing that is being built.
So that underlying demand orpressure in the rental market is
still there.
But because of the fallinginterest rates and less vendors,
uh less landlords selling outthis year, the rental market was
not shrinking by the same degreein 2025 that it was in 2024.
(26:19):
Vacancy rates are very low.
One way to offset um the rentalmarket is people were leasing
out empty bedrooms, clubbingtogether, and doing shared
households, etc.
etc.
So as we finish the year, ifwe're doing a wrap on 2025, you
can say in some ways the rentalmarket was pretty boring.
(26:41):
Yeah.
But there's a lot of dry grassaround, and it's only gonna take
a match to send the rentalmarket on fire and rising again.
SPEAKER_03 (26:52):
And do you think that match is New Year's, you
know, student migration?
Is it an interest rate rise?
What's you know, what do youthink is gonna be the the start
of its inflation.
SPEAKER_01 (27:02):
Yeah, okay.
The costs are gone up, um, theholding costs um are going up.
Um, the property is now notproducing the income that I need
it to to offset the risingcosts.
Yep.
That's the first thing.
Then if interest rates go up,I'm not swallowing this interest
rate cut to subsidize.
(27:23):
This is the landlord mentalitynow.
I'm not swallowing 100% of thisinterest rate rise to give a
tenant a subsidized lifestyle,the rent has to go up.
SPEAKER_02 (27:33):
Yeah.
SPEAKER_01 (27:34):
Yeah.
That's what we saw last time in2022 to 2024 when they started
hiking rates.
And um, if they hike rates oreven if they leave rates on hold
through 2026, but inflationkeeps rising, landlords will
nearly be forced in their mindto put the rent up to offset the
(27:57):
inflationary rate.
That's a spiral because rentsrepresent the large one of the
largest components of the CPIbasket.
So that in itself will bepushing the inflation rate up.
SPEAKER_03 (28:09):
Which is what happened last time.
Correct.
Uh and then the conversationswill go again, you know, I don't
understand why my rent's goingup so much, it's only a half,
you know, 0.25% rent rise, youknow, rate rise or whatever, and
again we go through that cycle.
Uh all throughout 2025, I askedyou this question.
If landlords find themselves uhdeciding they can't increase
(28:30):
rents to a point that, you know,is at the market level or they
can't hold a tenant and theyneed to sell out, as we close
out 2025, are there investorssitting around on the sidelines
at the moment, do you think, uh,that would snap up either now or
early into 2026 investments, oris that market still just not in
the right shape?
SPEAKER_01 (28:50):
Not not in Sydney.
I was at a real estate nationalreal estate conference last
week, and some of those agentsin some of those markets are
seeing investors come into them.
But um, you know, we're talking,you know, properties in the sort
of uh four to eight hundredthousand dollar range with a
five-six percent yield.
Well that's that's that's what'shappening, that's what's
happening there.
(29:10):
But you know, if you're sayingin inner city Sydney, um are we
seeing that sort of behaviourfrom investors that are
opportunists on the sidelinesready to come in?
No.
The state government, with theirincreased regulation to protect
tenants, um, have drivenlandlords into other, you know,
potential landlords into otherasset classes.
So this is what I said allalong.
(29:31):
I have no problem withprotecting tenants' rights, but
what you need to acknowledge themoment you start fiddling with
tenants' rights is the more youpush it in favour of the
tenants, in the majority ofinstances you're making it less
favorable for the landlord.
SPEAKER_03 (29:47):
Yeah, and as you say, it's very hard to justify a
one and a half million dollarproperty on a 2% yield in Sydney
when the ongoing costs are sohigh.
As we wrap up this episode andwith it 2025, the other major
thing that's really burstthrough the real estate market
this year has been underquoting.
Um, we have talked a lot aboutcertain instances, certain
(30:10):
agencies.
There's been headlines, youknow, we've discussed a lot
about what has happened wherethe government's made little
changes, where the regulators,you know, shown some interest,
potentially for the first timeuh in a long time.
Can you just give our listenersa bit of a recap?
Uh, not so much a timelinenecessarily, but what's happened
in underquoting this year?
And as we close out the year,where are we at on this this
(30:30):
battle?
And where do you think the uhthe regulator's going to head in
2026?
SPEAKER_01 (30:35):
Oh, the the regulator's going to head into
real estate offices.
They've been in and out of realestate offices literally for the
back end of the year.
Good.
Yeah.
So uh the Sydney Morning Heraldand the Melbourne Age um through
their uh uh story Blind Bidding,uh investigation, blind bidding
(30:55):
for the back half of the yearreally brought this into uh
people's uh uh awareness, if youlike.
But uh some of the things thathave gone out there that people
have probably heard in the pressis the penalties for
underquoting have risen from$22,000 to$110,000.
Suspensions of licenses,including um one of the city's
most prolific writers ofbusiness.
(31:18):
He's still suspended uh at themoment, I believe.
Yep.
Um uh twenty-five agencies areunder deep investigation in New
South Wales.
Um they apparently did a blitzon the Central Coast, the
Department of Fair Trade, lastweek and um have uh snagged
another person by asking forfiles.
(31:39):
Um so if they're getting to thecrux of underquoting, if they're
getting to the crux ofunderquoting and getting the
real culprits that are uh youknow bringing this tactic into
the marketplace, I'm all forthat.
Yeah.
Um I I saw a real estate agentdown in Melbourne earlier in the
year that was done forunderquoting, but it was
(32:02):
administrative, it was apaperwork issue.
That's you know, because a realestate agent is paperwork is
sloppy, does not mean thatthey're a rampant underquota
misleading buyers.
Yeah.
Um so I just hope that they'renot looking for scapegoats and
trying to you know have umPyrrhic victories here over
(32:23):
people who are not really doingthe wrong thing but have been
caught out from anadministrative perspective.
In Victoria, they're gonna makereal estate agents as it stands
advertise the reserve priceseven days out from the auction.
That will it's a great idea.
It's a great idea and it'llabsolutely shatter the auction
system because the auctionsystem relies on the agent
(32:45):
promising a high price to thevendor to get the listing and
saying the best conduit toachieve that price is an
auction, and then getting thebuyers along by underquoting.
And when the buyers on thewhole, not every instance, but
on the whole, when the buyersknow what the vendors are really
looking for, they won't turn up.
SPEAKER_02 (33:02):
Yeah.
SPEAKER_01 (33:03):
So if if that's implemented in Victoria, which I
I don't care whether it is or itisn't, that will absolutely
shatter uh the auction system.
They haven't said in New SouthWales they'll go to that degree.
I think the regulatorsunderstand that the real estate
agents have a job to bridge agap between the buyer and the
seller.
And if you ask a vendor sevendays before the auction what's
(33:24):
your reserve price, it is goingto be higher seven days before
the auction than what it isunder the pressure of the moment
on the day.
And vendors every Saturday umdrop their reserve price during
the auction to get a sale.
Yeah.
So um uh I again don't mindwhether the New South Wales do
or don't introduce that measure,but it will make running
(33:46):
auctions very, very difficult.
Um, what I do know is thatthere's 25 firms that um um have
been tracked by AI and um youknow high nuance data, and I
know this for a fact.
Um they've they've the the firmshave been tracked, and the top
25 officers in terms of standingout as having real questions to
(34:10):
answer around underquoting arebeing investigated as we speak.
So we'll see where that goes.
SPEAKER_03 (34:15):
Yeah, we'll certainly uh we'll certainly
have to follow up with thatstory next year when we do get
back into things.
Uh my final question for youthen, Peter, for 2025.
If publishing the reserve priceout seven days before uh is
potentially like it seems likeit could be a good option, maybe
it's a bad option, we don'tentirely know.
(34:35):
In your experience, and you'vebeen doing this for a long time,
do you have any thoughts on whatmight be the most elegant
solution that fair trading couldimplement to solve this problem
once and for all?
So that agencies just don't feelthe need to underquote.
SPEAKER_01 (34:51):
Uh agents will always feel the need to
underquote.
I said this before.
Why do agents underquote Kieran?
Because it works.
Because it works.
Yeah.
So because it works, but if itdidn't work, it might be it
might be a low-rank, suspicious,dirty, filthy sales tactic, but
the reality is it works.
(35:12):
Yeah.
Which is why agents do it.
SPEAKER_03 (35:15):
It's why Black Friday works, you know, get them
in the door, low price, youknow, put the goods, the the
essentials at the back of theshop, you know, that kind of
thing.
SPEAKER_01 (35:22):
The harsh reality is once one agent in a marketplace
starts underquoting, theyinadvertently force the
competitors to do the same.
Yeah.
We've said it before, you've gottwo two million dollar houses.
One's promoted at two million,the other's promoted at 1.6.
Where do you think the 30 buyersare going on Saturday morning?
(35:43):
Yeah, well, of course.
They're gonna go to the cheaperone thinking there's a bargain.
Yeah, and yep, some of them willsay this is gonna go for a lot
more, some of them will say, Oh,maybe we can get it for one
nine.
They can't help themselvesthinking they might get a
bargain on the day, but it justdraws people in all the time.
Yeah, yeah.
So um, I said in 2015 when NewSouth Wales had its first
(36:06):
earnest attempt at stoppingunderquoting, um, that if these
measures are successful, thisthese measures will will blow up
the auction system, but theyweren't successful, and
underquoting has got worse since2015, not better.
Um one of the things that hasstill not been mentioned by
anyone is the vendor needs to beon the hook as far as penalties
(36:31):
go.
Yeah if they are complicit inunderquoting.
So the age, if anyone um umhasn't heard it, you should look
around for it.
The age recorded a real estateagent from Marshall White, which
is a massive real estate firm inMelbourne, coaching a vendor on
how to underquote and how tofudge the paperwork and the
(36:52):
merits of doing so.
SPEAKER_02 (36:53):
Yeah.
SPEAKER_01 (36:54):
And the vendor went along with it, and then the
recording was released toMarshall White, and they were
forced to terminate thesalesperson in question and
said, that's not company policy,this is a rogue employee.
I'll leave that for others tojudge.
But the reality is that thevendors are complicit in the
underquoting, and the way theystopped dummy bidding was saying
(37:16):
if any vendor or real estateagent is caught engaging in
dummy bidding, they will befined.
Where at the moment only thereal estate agent can be fined
for underquoting.
SPEAKER_03 (37:27):
Yeah.
Yeah, look, I certainly hopethat uh fair trading continue to
bring the hammer down here andmake some significant changes to
the industry because it uh cancertainly use a lot of cleaning
up.
Look, uh, really great recap,Peter.
It's um it's been uh a pleasureworking on the podcast with you
in 2025.
We've covered across a wholerange of topics, uh, and I think
we've brought some goodinformation out to our
(37:49):
listeners.
So I thank you as always forcoming in today and uh for
coming in every time we we catchup and talk.
My pleasure, Kieran, all thebest and a Merry Christmas.
All the best and Merry Christmasto you, and a very big thank you
to all of our listeners forbeing with us through 2025.
Uh, we wish you all from theteam here at Current Market
Insights, we wish you a MerryChristmas and a happy new year,
and we hope to see all of younext year.
(38:10):
As always, thanks for listening,and we'll talk to you next time.
SPEAKER_00 (38:13):
Thanks for joining us on the current market and
summons pop and cups.
Popular Podcasts
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
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.
The Bobby Bones Show
Listen to 'The Bobby Bones Show' by downloading the daily full replay.