April 23, 2025 • 50 mins
Australia's housing crisis has reached a breaking point, forcing all political parties to place housing policy at the forefront of their election platforms. In this episode, we dissect the competing visions for solving Australia's housing affordability crisis, exploring whether any party has realistic solutions to the mounting pressure.
Labor's ambitious promise of 1.2 million new homes by 2030 sounds impressive, but we examine whether this target is achievable given construction industry constraints and regulatory hurdles. We break down their policy framework including the Help to Buy scheme, stronger renter protections, and infrastructure funding designed to increase supply. But will these measures be enough when housing demand continues to outpace construction capacity?
The Coalition's alternative vision focuses on unlocking superannuation for first home buyers, implementing a two-year ban on foreign investors purchasing existing homes, and freezing the National Construction Code for a decade. We evaluate whether these market-oriented solutions address the fundamental challenges or simply shift the problem.
Most revealing is our discussion about the realities faced by everyday Australian landlords. As interest rates climbed, many small investors found themselves unable to cover their mortgage costs through rental income. The narrative of "greedy landlords" emerged only after these rate hikes, highlighting the complex relationship between monetary policy and housing affordability.
For first home buyers, the situation looks increasingly bleak. With the average age of first home purchase now 38 years old in Australia, we consider whether radical interventions are necessary or if incremental policy changes can restore balance to the market. Share your experiences with housing affordability and let us know which policies you believe could make a difference in solving Australia's housing crisis.
Follow us for more property news and mortgage advice!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
1.2 million new homes by 2030, more tradies.
We cut construction red tape.
The home guarantee schemehelped to buy and you got a
better deal for renters.
It's the hot button topic goinginto this election, and cost of
living as well 1.2 millionhomes.
Speaker 2 (00:17):
Is it enough?
It's not about greedy landlords.
Greedy landlords didn't existuntil these interest rates
started to go up.
People need to understand thedifference between Labor and the
coalition.
And People need to understandthe difference between labor and
the coalition and they need tounderstand the differences in
their housing policies.
Our GDP per individual in NewSouth Wales has decreased
substantially.
Our productivity has decreased.
(00:38):
So how are we as people,supposed to increase our
productivity, increase our netwealth, if we can't get to
freaking work Sharehouses inSydney CBD where people are
renting out balconies?
How did we get to this point?
I want to ask you do youdisagree with any of this?
Speaker 1 (00:57):
Mostly for me and people at my age, it's not bad.
Welcome to the Finance Showwith Joe.
He's Joe, I'm Michael and todaywe're going to have a very fun
episode.
We're talking about housingpolicy in the upcoming election.
Speaker 2 (01:11):
So a lot of listeners might consider this episode to
be boring.
Politics often is.
Speaker 1 (01:20):
Well, actually it hasn't been for the last few
years.
I would like it to be a littlemore boring than it has been.
Speaker 2 (01:26):
However, this is a very important episode because
people need to understand thedifference between labor and the
coalition, yeah, and they needto understand the differences in
their housing policies.
You know, labor leans onedirection and then the coalition
leads a different coalitionbeing.
You know liberals and nationals, yeah, um, labor being you know
the current, the current laborwith the sprinkling of the
(01:49):
greens, depending on if theylike them today or not oh man,
we can get it.
Speaker 1 (01:53):
We'll get into that bloody green saying one thing
and just refusing.
I wish the greens were morepragmatic.
It would just make them easierto like.
Well, we'll get.
We'll get into it once we startactually talking about policy.
But they, you know, is it aminority government right now?
Um, with labor, like they don'thave a majority right they
don't have a majority.
However, they're still in poweryeah, yeah, they work with the
(02:17):
crossbench, yeah with the greensand stuff like that.
Correct, but it's just, it's aclub in a happy relationship,
it's it's a happy relationship.
Speaker 2 (02:24):
It's a mess over there.
A lot of people who havewatched these episodes before
they know which way I lean.
I am a lot more conservative, Iam a lot more for small
business, big business, and Ihave reasons behind that.
Yeah, and we're going to unpackall of that today.
Speaker 1 (02:39):
I am typically a little more left-leaning when it
comes to housing policy.
Mostly, for me and people at myage, it's more about
affordability and supply, whichI mean.
It is the hot button.
It's the hot button topic goinginto this election and cost of
living as well, obviously.
Speaker 2 (02:56):
So, michael, you've got some really good hot points
on the Labor and Liberalgovernment and their housing
policies.
Can you quickly run througheach one?
Just tell the listeners youknow what each government is
proposing.
Speaker 1 (03:10):
Yeah, I'll give you the real, real basic stuff.
And, just for reference, this isall from each party's websites.
This is straight from thehorse's mouth.
I'm not coming up with anything.
So for Labor, we've got the $10billion Housing Australia
Future Fund.
That's 30,000 affordable homesin in five years.
That has been recently blockedby the coalition and greens.
The other policy is homes foraustralia.
(03:31):
Now this is their big policy.
Um, for long-term things 1.2new, 1.2 million new homes by
2030, more tradies, which islike a mixture of immigration
and more free training, cutconstruction red tape and
incentives to state governmentsto continue building homes.
You've got the home guaranteescheme, which includes, like the
first home guarantees, allthose like family home
(03:52):
guarantees for first home buyers.
You've got the recent help tobuy that just became law in
February.
That's the governmentcontribution of up to 40% for
40,000 low and middle incomehouseholds to purchase a home.
And you, you got a better dealfor renters.
This is about strengtheningrenters' rights, so that's
things like minimum rentalstandards, limiting rent
increases to once a year andrequiring genuine, reasonable
(04:15):
grounds for eviction.
And you've also got theNational Agreement on Social
Housing and Homelessness $9.3billion to states and
territories to combathomelessness and repair social
housing, social HousingAccelerator.
So another $2 billion to helpstates and territories build
4,000 homes, excluding HECS frommortgage applications and the
(04:36):
housing support program, whichis $1.5 billion for
infrastructure and amenitiesacross Australia, which should
provide 25,000 new homes in justNew South Wales alone.
Speaker 2 (04:42):
Serious tongue twister there from the labor
government says they, they havethere.
Speaker 1 (04:48):
I'll give them this.
They have a long series ofpolicies and it was very
interesting going through eachof their websites and how they
presented this information.
You know labor.
They had it in like uh tablesand graphics explaining each
thing with like little dotpoints to explain.
The coalition had a essentiallya long blog post that I had to
decipher what their points were,and then the greens had a
essentially a long blog postthat I had to decipher what
their points were, and then thegreens had a fucking manifesto
with like numbered points thatwent up to like 60 or 70 and I'm
(05:11):
like, oh, this is so hard toread anyway that was interesting
.
Speaker 2 (05:15):
I just want to break down each of labor's points.
Okay, so we've got a 10 milliondollar housing australia future
fund, so that's 30 000affordable homes in five years.
Speaker 1 (05:24):
Yeah, and that's been blocked by the coalition and
the grains yeah, that's, that'sbeen stalled, and that's been
stalled for a while so 10billion dollars for 30 000
affordable homes, that's, youknow, a cost per acquisition of
333 000 for each home.
That's not feasible well, Iguess it would depend on, like,
what they're building and howthey're building it.
Speaker 2 (05:44):
But yeah, I don't understand, with construction
costs and stuff because we weretalking about this in the last
episode that the constructioncosts just keep going up
construction keeps going up,land acquisition keeps going up,
you know, uh, the cost of laborkeeps increasing and there are
so many different metrics at themicro and the macro level that
are causing these cost increases.
(06:05):
But that's not going to happenand I think the reason why the
coalitions and the gradesblocked it is because they know,
budget-wise, that's going toblow out.
So what the government alwaysdoes every single year is they
release a budget.
Yeah, of course, and when theyrelease a budget, you know this
is what we want to adhere to,this is what we want to achieve.
Speaker 1 (06:25):
Last year, the big winner was electricity bills
yeah, yeah, there waselectricity bills and uh like,
uh stuff for domestic violence,things like that yeah.
Speaker 2 (06:34):
So putting aside 10 billion dollars for australia's
future fund, 30 000 affordablehomes in five years that's,
that's a pipe dream.
That's not going to happen.
So I'm going to cross that oneout.
Okay, homes for for Australia1.2 million new homes by 2030,
more tradies, cut construction,red tape, incentives to state
governments this I like a littlebit more.
Speaker 1 (06:56):
Yeah, this is the overall goal.
So, like all these littlepolicies and stuff kind of
working towards this one bigthing, yeah but 1.2 million
homes, is it enough?
No, it's interesting too.
It was 1.2 million in fiveyears.
This was going back three yearsnow and it wasn't feasible.
(07:16):
It's not happened.
They pushed it to 2030 now.
Speaker 2 (07:19):
If you look at Labor's recent immigration
policy, it's been increase,increase, increase the amount of
people coming to Australia.
Speaker 1 (07:25):
Yeah, but they have been dropping it steadily over
the last two years.
I think the big reason whythere were so many immigrants
like immediate post-lockdown itwas the backlog, wasn't it from
COVID?
Speaker 2 (07:40):
No, it wasn't just the backlog.
There was a lot of individualsthat were allowed to come in on
student visas, on professionalvisas, the workplace visas and
stuff.
A lot of them had fakedocumentation.
A lot of them had applied forthese visas unethically.
Let's say, go pay somebody Xamount of dollars and they'll be
(08:02):
able to get you a visa inAustralia, and essentially what
we had was a large amount ofmigrants that weren't skilled
migrants.
We also had a large amount ofmigrants that weren't actually
students.
Speaker 1 (08:13):
Yeah, I know about the student one because they've
been, because they've recentlytightened up now that student
visa and the studentrequirements and things like
that.
Speaker 2 (08:20):
The reason I'm bringing this up, though, is I
think we let in a lot morepeople than 1.2 million over the
last couple of years, and I'dhave to look up the numbers.
You can't only look at, youknow, 1.2 million new homes by
2030 and just think about theimmigration.
You also have to think aboutall the people that are turning
18 now.
Yeah, you know all the peoplethat already exist in australia,
(08:42):
all the people that are intheir 30s and 40s that haven't
purchased a home yet.
Oh, is that 1.2 million newhomes going to suffice?
No, but what I do like isthey're cutting the construction
red tape, because it'sessential right, right, right
now, in this current situation.
I need to see something inwriting.
I need to see an actualproposed bill that is going to
(09:06):
decrease the amount ofconstruction red tape,
especially in New South Wales.
In New South Wales, we have aserious housing problem.
The housing problem doesn'tstem from the lack of land or
the lack of people willing towork.
It stems from the feasibility.
So when you approach a lenderas a property developer, as a
(09:27):
builder, they look at thefeasibility.
They see if it stacks up, andwhat I mean by stacks up is they
need to see if it's making a15% profit or more in order to
be able to fund a project.
So let's say, you purchasesomething for a million dollars.
It's going to cost $1.5 millionto complete the construction.
(09:50):
So that's $2.5 million If thetotal cost of construction, the
total cost of acquiring the landand stay-at-duty holding costs,
if the profit on top of thatisn't 50% once you sell, the
$2.5 million worth of propertyor whatever, they're not going
to fund it.
Speaker 1 (10:10):
Yeah Well, it's profit-driven, and if there's no
profit in it, then it's harderto get loans and stuff like that
, so a lot of the constructionred tape hasn't come from the
government per se.
No, I thought it came from morelike state and council
governments.
Speaker 2 (10:24):
You are correct.
So it's a lot more expensive tobuild, okay, and it's a lot
more expensive to insure.
It's a lot more expensive tohold.
So they want so the governmentwants more housing, but they
also want the housing to beregulated.
Under the current red tape thatthey have, it's not feasible.
Okay, land in New South Walesis expensive, yes, and then,
(10:49):
once you look at all the coststhat are incorporated with that
or included in that, developersand builders aren't looking at
new south wales as a profitableventure anymore.
So that's why you're seeing,for example of the last episode
manny mentioned stocklands okay,stocklands is a large property
developer and they're looking atareas like Queensland, regional
Queensland.
(11:09):
Why?
Because they're going to makemore money up there than they
would in New South Wales.
Speaker 1 (11:13):
Question about the Stocklands thing Is it the same
Stocklands that do the shoppingcentres Correct Like that,
stockies?
Oh, wow, okay, I didn't knowthey were property developers.
Yeah, so the developers as well.
Speaker 2 (11:21):
So you look at those items and you have to think to
yourself okay, how can wedecrease the costs for
developers and builders toincentivize them to build in
metropolitan areas?
This also includes Melbourne,this also includes Brisbane.
You have to look at all themajor capital markets and ask
(11:43):
yourself why are developers notwilling or not wanting to buy in
these areas?
And the reasons are clear asdaylight it's because it's too
expensive.
That's why they're looking atthe regional areas.
That's why they're looking at,rather than looking at,
melbourne CBD.
They're looking at GeelongRather than looking at Sydney
CBD.
They're looking at Penrith,they're looking at Oren Park.
They're looking at Sydney CBD,they're looking at Penrith,
(12:04):
they're looking at Oran Park.
They're looking at Wollongong,for example.
They're looking at Newcastle.
These areas are so much cheaperto be able to build in.
Why?
Because the cost of land ischeaper to acquire and once they
start building in those areas,the people that are able to
enter the market because ofinterest rates being so high are
able to afford it.
You know a tradie living in NewSouth Wales sorry, a tradie
living in Sydney, an electricianliving in Sydney and an
(12:27):
electrician living in Newcastle.
What's the variance on theirincome?
It's got to be 5% to 10%.
Maybe it's not going to be toohigh.
You know, one might make$180,000 a year.
Another one might make $200,000a year.
I'm just spitballing.
Speaker 1 (12:40):
Yeah, what you're saying is there's negligible
differences.
Speaker 2 (12:43):
But somebody that's looking to buy a property in
Sydney, that might be $1.5million.
If you're purchasing inNewcastle, it might be $800,000.
So I agree they need to cut theconstruction red tape.
It is way too expensive tobuild in areas like Sydney and
that's because of all the addedcosts that they've created.
There is a high probabilitythat if there was a decrease in
(13:07):
the amount of red tape aroundthe construction industry, the
housing market would boom againand people when I say people,
developers would be more willingto jump into the market again
and start developing in theseareas.
But unfortunately right nowthey've added too much red tape
around the construction code andthey're not willing to jump in.
There's something calledhomeowner's warranty.
(13:29):
Homeowner's warranty exists forproperties two stories and
under.
So if you're building alarge-scale townhouse
development, there is ahomeowner's warranty that you
need to pay for every single lot.
Okay, two stories and under.
So townhouses, you're not goingover three stories, it's all
going to be two stories.
If you look at that, that isgoing to cost more to develop
(13:54):
and build than it would todevelop and build apartments.
The problem is with apartmentsis nobody wants to buy them
anymore after what happened withthe mascot towers and the Opal
Tower, so people are scared ofthem.
Speaker 1 (14:06):
Yeah, for those who don't know, it was dodgy builds
and they were kind of fallingapart, right yeah.
Speaker 2 (14:12):
So cutting the construction red tape.
I agree with yeah, Homeguarantee scheme.
Speaker 1 (14:17):
I think this is just a continuation of the stuff that
I've said.
Speaker 2 (14:19):
No, no, no, no.
I just need to bring upsomething.
Speaker 1 (14:25):
That was Liberals' idea.
Yeah, no, they're justcontinuing it on.
Yeah, yeah, this is based oninformation because this is from
the 2024 budget, which isactually set to change upcoming,
but I can't imagine thatthey're going to change too much
.
Speaker 2 (14:37):
I think that's just bollocks.
Okay, as the British would sayHelp to buy.
I hate this scheme.
I hate this scheme.
Do you know how many peoplecould qualify for the help to
buy scheme?
Speaker 1 (14:48):
We talked about the.
What was it?
Well, there's 40,000 positions,I know that much yeah.
Speaker 2 (14:54):
And I can guarantee you maybe 400 are filled up.
It is so hard, so hard to getaccess to this scheme that I
wonder why it even exists.
Speaker 1 (15:03):
Well, it's for low-income holders.
Speaker 2 (15:06):
Okay, low-income holders, but by the time you
factor in interest rates and allthe other costs, it doesn't
benefit them anymore.
They are actually better offrenting than actually applying
for this scheme.
And then the government's goingto own 40% of their property.
What happens when they need tosell the property?
Does the government get 40% ofthe profits as well, or do they
(15:27):
just get their money back?
Speaker 1 (15:28):
No.
So how it works is thegovernment puts in the initial
40% and it depends on you.
You can pay that off and buy itback from the government.
The goal is that you would buythe whole thing off, because the
idea is not for investment oranything like that, it's purely
owner occupied um.
(15:48):
So the idea is over time you'dbe able to buy you own it.
Speaker 2 (15:52):
Okay, you've changed my mind on that one.
That one I'm gonna.
I'm gonna surrender a betterdeal for renters strengthening
renters rights, minimum rentalstandards, limiting rent
increases to once a year andrequiring general reasonable
grounds for eviction.
This one I like.
(16:17):
However, 2023 and 2023, wheninterest rates spike like that,
and if they ever spike like thatagain, you are going to see
people foreclose on theirproperties because of a one-year
rule.
Speaker 1 (16:23):
It's one of those things where it's like it's that
delicate balancing act of youknow the rent.
We saw the crazy rental linesyou know, going down the street
for you know an apartment orwhatever, and I mean it's a
reaction from a lot of people tohelp strengthen rents because,
you know, you heard horrorstories.
I mean I heard, like I knowpeople where they got kicked out
(16:44):
for no real reason other thanthe fact that the owner, the
landlord, knew they could getmore money by evicting this
person.
I'm not saying that's whatevery landlord is doing.
Speaker 2 (16:55):
No, no, no.
This is actually a goodargument.
I'm going to close the iPad.
Let's say I'm a schoolteacher.
Let's say I'm a school teacher.
Yeah, okay, as a school teacher, I know that my salary is a lot
lower than other individuals.
Yeah, I'm making $85,000 to$95,000 a year.
(17:15):
Okay, I have done well formyself and I have been smart.
I've been a smart person and Ihave invested in different
regional areas.
Okay, I've got two investmentproperties.
I've got two investmentproperties and I have held these
investment properties for threeyears or so.
In this time that I have heldthese investment properties, my
(17:37):
interest rates went up 4%.
Yeah, okay, and I am nowlimited, as a school teacher, to
increase the rent on my tenant.
I am now having money takenaway from me by the banks for
something I cannot control atall.
(17:59):
I can't control that.
I'm having money taken away fromme and I need to increase my
rent yeah okay, I have a tenantthat's in there and they're
paying five hundred dollars aweek.
Yeah, my interest rates havegone up x amount and I need to
increase the rent to 550 a week.
Yeah, okay, yet again, I'm justa school teacher.
(18:20):
All of a sudden I request fromthe tenant hey, this is the
market value, this is what Iwant to increase it to.
I have to increase it to 550.
I'm sorry, but this is justbecause of my circumstances.
I only earn 95 000 a yearpre-tax.
Am I now a bad person?
Speaker 1 (18:37):
no, no and I.
But that's the thing that's.
You know, that's an extra 50,right 500 to.
The problem was it was crazyincreases, like when I left my
apartment after I bought.
My landlords were actuallyquite nice to us and they
increased it.
They showed us the report as towhy.
Because, again, property values, this is what the median rent
is now.
This is just what should beexpected.
(18:59):
So they increased it, maybelike $20, $30 sort of every year
, but as soon as I left, theyincreased it by $200.
Speaker 2 (19:07):
Okay.
Speaker 1 (19:08):
Yeah.
Speaker 2 (19:08):
But where were you living?
Speaker 1 (19:10):
I was in.
Speaker 2 (19:10):
Wollstonecraft Okay, so Wollstonecraft is a very
premium area.
Speaker 1 (19:14):
Yeah, it is.
Speaker 2 (19:15):
In Sydney.
Yeah, it's right next to NorthSydney, I believe.
Speaker 1 (19:18):
Yeah, literally it's in between North Sydney and
Crow's Nest.
Speaker 2 (19:21):
Okay, so it's a beautiful part of Sydney.
Yeah, it north sydney andcrow's nest.
Okay, so it's a beautiful partof sydney.
Yeah, it's very nice, do younot think there's a high?
Speaker 1 (19:32):
probability that their interest rates increase so
much and that they need to payoff that amount.
It was interesting because theycould have I mean, they could
have just increased our own,like my current rent at the time
, to buy that much.
Clearly because, like they hadthe data and they only increased
it by the minimum recommendedrecommended amount because we
were never late with rent, wedidn't break anything you know
like for all you were goodtenants.
We were good tenants and theytreated us as well as they could
(19:52):
.
And I understand, like my like,I understand that landlords
raise rents not because they'regreedy, it's because, yeah,
rates rise.
But again it's that.
It's that some, there are somelandlords who really put like no
effort in and they don't, theydon't care too much, like they
don't want to repair things.
(20:13):
You call them and you're like,please, like, let's just say the
fly screen's broken, I justneed this fly screen repaired
and it takes three months andyou you've been texting them
fucking every day, every week,those kinds of things.
However, I do tend to agreethat limiting rent increases to
once a year, like you said, ifthere's a spike again and
(20:35):
interest rates went up, it wasquarterly rises, right, it was
0.25% every month for like godknows how long yeah, exactly.
And if you're limited, um, ifyou're limited to only one rent
rise that year and you didn'tthink that the interest rates
were going to keep going up,you've now not.
You're not covering those coststhe same way you would have if
(20:56):
you could have adjusted multipletimes so effectively if I'm
only allowed one rent rise ayear?
Speaker 2 (21:01):
yeah, okay, I've got two kids at home that I need to
feed and now I can't afford myhome loan repayments, my
investment loan repayments.
Yeah, all of a sudden I call upthe bank and I say, hey, can
you please put a pause on myhome loan repayments just for a
few months, just so I couldcatch up.
Do you know what happens to thecredit report then?
Speaker 1 (21:21):
yeah, that doesn't look good.
Speaker 2 (21:21):
your credit rating down you go into something
called financial hardship.
Okay, when you are in financialhardship, guess what happens
after that?
You can't apply for a differentloan for over 12 months, okay,
okay.
So everyone thinks ofthemselves greedy landlords,
greedy landlords.
It's not about greedy landlords.
Hmm, greedy landlords didn'texist until these interest rates
started to go up.
Okay, I never heard this termgreedy landlords, greedy
(21:45):
landlords until the interestrate spike started to occur,
because a lot of people theyrent, they rent out their
properties based on what themarket is asking for.
Speaker 1 (21:55):
Yeah.
Speaker 2 (21:56):
If my repayments are this much, this is how much I
need to charge in rent becauseI've got kids at home.
So this exact policy thatLabor's preaching I don't agree
with and I am going to continuenot to agree with it, because I
think it's unfair to good peoplewho have saved up, who have
purchased investments, who aretrying to set themselves up for
(22:18):
retirement and then all of asudden they are being handcuffed
again by a government that doesnot understand what is actually
happening in the market.
Speaker 1 (22:26):
I agree with the again with the limiting rent
increases to one year.
Don't I think that's that's,that's too difficult.
However, I do agree withminimal rental standards and
having reasonable grounds foreviction, because I mean, I
think people, when they they arepaying for this, and I think
that these houses should be upto a certain standard, and if
(22:47):
you can't afford to keep yourinvestment property to that
standard, well then you can'tafford the investment property.
That's how I think of it?
Speaker 2 (22:54):
What if wages don't increase at the same time as the
interest rates?
I know?
And then what about the cost oflabour to to get something?
Let's say I've got a fly screenthat needs to be repaired.
Actually, perfect example.
I've repaired a fly screenrecently in my house.
Okay, it's for my door, wholebackyard.
Okay, this cost me two thousanddollars.
Okay, for me to get someone outthere repair it, measure it,
(23:17):
all that sort of stuff.
Call out for you that I've beenabout 2400 with cost of labor
and everything.
Let's say I rented out myproperty and I got $600 a week.
That tenant lies and tells usthe fly screen is now broken,
when really their dog was theone that ran through it and I
now have to pay for it.
It's $2,400.
So that whole month's rent gone.
(23:38):
I've now needed to pay for thefly screen at the same time.
And then I've still gotmortgage repayments at the end
of that month of, let's say,three thousand dollars.
Is that fair?
Speaker 1 (23:49):
well, to an extent, again, it depends like if you've
, if you've got a.
This is why people don't putdogs on there, like when they
don't want dogs in their rentalsbecause of things like that.
Like it's not really the dog,well, you should be able to
train your dog to not break thethe fly screen, but at the same
time, you know, happenssometimes like that so happens,
but it's the landlord's faultnow well, again, this is how
(24:10):
this is, when the ombudsman andstuff come in and like, uh, all
that sort of stuff but this iswhat I'm trying to explain.
Speaker 2 (24:16):
It shouldn't have to take an ombudsman to come in.
It shouldn't have to take thesesorts of things.
I know 150 real estate agentsthat just focus on rentals.
Okay, and I'm telling you now,each one of those people have at
least 50 people, 50 tenants,that they're taking care of.
Not every single one of them isverifying their rental
(24:36):
applications.
Not every single one of them isgoing to be able to go to the
houses and do an inspection andguess what?
100% guarantee that there is adog at one of these premises
that was listed as a cavoodleand when you get there it's
actually a golden retriever, andthat golden retriever has
damaged the property and nowit's on the landlord to fix it.
So, whatever the Laborgovernment theoretically you
(25:00):
know their overarching belief is, it's going to impact the
everyday Australian, because theeveryday Australian is the
landlord.
The everyday Australian hasbeen taught, has been bred, has
been, you know, uh, notassimilated, uh, brainwashed.
To think that brainwashed?
Now, that's not the right wordeither, but you know what I'm
saying.
(25:20):
That property is the way tobuild wealth in australia and if
you're going to have one rentalincrease per year, this is
going to heavily affect them inbeing able to maintain their
investment loans and theirinvestment properties.
All right, social housingaccelerator two billion dollars
to help states and territoriesbuild for 4 000 homes.
(25:42):
I want to actually see thefeasibility analysis of that one
.
I'm so sick of these balloonnumbers.
Yeah, we're gonna put twobillion dollars and we're gonna
do 4 000 homes.
Just just just give me anactual funding table.
Show me where the propertiesare going to be.
Speaker 1 (25:55):
Show me where everything's going to be oh, and
then that, and that's honestly,if that's fucking across the
board for all of them, they justsort of throw out these numbers
and again, like I tried to lookfor exactly what you're saying
and none of them have it.
Speaker 2 (26:09):
They're just all bullshit round numbers yeah,
exactly.
Okay, exclude HECS frommortgage applications.
We spoke about this a couple ofepisodes ago, I think I almost
got fired from Macquarie Bankfor bringing up this argument,
and now the government wants tobring it in.
I'm taking credit for this Backin 2018, I came up with this
idea Housing support program at$1.5 billion for infrastructure
and amenities across Australia.
We discussed this one as wellExactly At 25,000 new homes in
(26:32):
New South Wales alone.
That's fantastic.
I want to actually see it putto paper.
Let's go through the coalitions.
Yes.
Speaker 1 (26:37):
Yes.
So the coalitions have a fewthings they aren't throwing
around.
Let me just read it.
So their big thing is thehousing infrastructure program.
That's $5 billion to enableinfrastructure like water, power
, sewage and access roads.
Allegedly that's 500,000 homes.
Where that's coming from, wedon't know.
(27:00):
That funding is based on a useit or lose it basis, so if
there's no progress within 12months, you don't get any
funding.
So they want to freeze theNational Construction Code for
10 years.
It's controversial in theindustry because the leader of
the I can't remember his name.
Regardless, one of the industryheads was worried about quality
(27:23):
and innovation and how thatmight compromise it.
Like they're on board with alot of the coalition's things,
but not so much the freeze onthe national construction code.
Another one for them is thetwo-year ban on foreign
investors and temporaryresidents purchasing existing
homes in austral, cappingoverseas students, reducing
immigration from 185,000 to140,000 for two years.
(27:45):
Deregister the CFMEU, which isthe big construction union, and
using superannuation to buy yourfirst home.
So that allows access up to$50,000 or 40% of your super to
buy your first home and thatneeds to be returned when the
house is sold I want to ask youdo you disagree with any of this
?
um, I'm not gonna.
(28:06):
I'm not gonna pretend like Iknow much about the construction
code, so that's more of aquestion mark on my end.
Um, the housing infrastructureprogram, I don't really see how
five billion will equal to 500000 homes, like if what was it?
Speaker 2 (28:19):
it's another umbrella , bullshit number yeah yeah, in
general.
Speaker 1 (28:23):
Like building infrastructure, yeah, that's,
that's all good.
But labor has a has a verysimilar one.
The super energy, uh, thederegistered cfmu.
That seems more like apolitical thing.
I again, I don't work inconstruction.
I don't know much about how,like, what kind of costs these.
This is happening, um, so again, sort of a question mark, but I
(28:43):
feel like that's more of apolitical move based on the
recent controversies.
Reducing immigration yeah,that's pretty standard.
I expect that from thecoalition.
Capping overseas students Again, that's standard as well.
The two-year ban on foreigninvestors on buying existing
homes that's not bad.
What I dislike the most is thesuperannuation to buy a first
(29:06):
home because it's framed in sucha way as, like, you buy a home,
so therefore you have somethingto live in and you have equity
when you retire, right.
But it kind of just feelsbackwards to use your retirement
money to buy a retirement plan,like I don't like the idea of
tapping into your retirementfund to set yourself up for
(29:29):
retirement when really thereshould be other schemes involved
to help you have to help homeownership.
I don't know what are yourthoughts I I love everything.
Speaker 2 (29:40):
First of all, I don't like the housing infrastructure
program because it's anotherbullshit number.
Random numbers thrown out soI'm just going to cross that one
out.
It's bullshit.
I don't care what I do like isthe funding provided on a use it
or lose it basis.
No progress within 12 months,no funding.
I love that.
I absolutely love that, becauseI've seen so many times
government grants be given youknow, oh, they get rewarded,
yeah, yeah, everybody getsrewarded.
No, they're saying hey, if youdon't do this in 12 months guess
(30:00):
what we're taking the manytimes government grants be given
.
You know they get rewarded.
Yeah, yeah, Everybody getsrewarded.
No, they're saying, hey, if youdon't do this in 12 months,
guess what?
We're taking the funding awayfrom you and you're not going to
have access to this.
Okay, so you better get started.
You're not allowed to go spendthat money on some bullshit.
Get started on your projects,because we need a better
Australia.
So I do like that one.
Freeze the NationalConstruction Code for 10 years.
Bellissimo.
(30:21):
Every single year, the NationalConstruction Code.
There's changes to it, there'sthings that are added to it.
They want to freeze this.
They think that we have enough.
We have enough policy aroundconstruction right now.
They don't want to add anythingfurther to it.
Speaker 1 (30:37):
Yeah, and I don't disagree with that part, it's
the it wouldn't freezing it.
So we were talking about how weneeded to cut red tape for
construction.
Wouldn't freezing the nationalconstruction code sort of lock
in what we've got right now,which we already said is
inefficient?
Wouldn't this prevent thatcutting of red tape?
Speaker 2 (30:52):
Yes, However the code that we have now is good, but
people can't keep up.
So every single year, theconstruction code changes and
they add more to it.
So let people catch up for thenext 10 years.
Let them catch up, let them getused to the systems that we
have in place so that we havethe better quality builds that
they've hoped for from thenational construction code.
(31:13):
Yeah, but at the exact sametime, they're not having things
randomly added.
You know, halfway through abuild, let's say, you start
building in January and you'refollowing the 2024 national
construction code and then, allof a sudden, your project got
delayed because of rain,flooding, whatever.
And then, all of a sudden, the2025 code has come in and now
you've got to adhere to that,okay.
So all of a sudden, the 2025code is in and all these extra
(31:37):
items have been added to yourbuild, and now you can't afford
it yes, and I agree that addingthis stuff is only going to
increase costs and delays yeah,and delays and things like that.
Speaker 1 (31:49):
But I think freezing it does just sort of lock us
into what we've already gotright now and we're already
complaining that we can't wecan't build enough to match
demand.
Speaker 2 (31:57):
I'm I'm going to agree with you there.
However, if this is the onlyplan, or if this is the only way
we can move forward, they can'tremove things, they can only
freeze it.
I would rather they freeze itand stop adding, as opposed to,
um, you know, allowing it tocontinue and more items get
(32:17):
added every single year to makesure that your building is up to
code.
Speaker 1 (32:21):
Well, you guys.
Let us know because I just canthey remove things from the
construction code like is that,is it flexible in that sense?
Um, we don't know, I'm not sure.
Speaker 2 (32:32):
Yeah, we don't know, but if it's just a freeze,
rather than adding consistently,or rather a freeze um two-year
ban on foreign investors andtemporary residents purchasing
existing homes in australia.
This is beautiful.
This is music to my ears yeah,yeah, however yeah, the cheapest
properties in australia arealways going to be off the plan
purchases.
Yeah.
The new, new, new ones, yeah,and all this is doing is pumping
(32:55):
that market up.
The existing home markets isalready pumped up.
That's already inflated.
Yeah yeah, that they're doingjust fine, they're just doing
just fine, so you know there'sgoing to be less people on that
side.
It's actually going to devaluesome of the properties, I
believe.
However, off-the-play purchasesthat's where, a lot of the time
, people are able to findthemselves bargains.
(33:17):
That's when you're able toinvest in new areas.
If a foreigner who is amulti-millionaire billionaire
can only buy brand new homes inAustralia, they're going to buy
the shit out of brand new homes.
Speaker 1 (33:29):
Yeah, of course I mean, especially because it's
all like I mean, it's easytechnically speaking you pick, I
want this pot, I want this pot,put that kind of house on it
and you go do it.
I don't have to touch it now.
Capping overseas students loveit.
I mean, yeah, that's been onthe cards for a long time on
both sides of the aisle on thatone, mostly because, again, that
(33:49):
rental crisis that occurredjust after lockdown, everyone
coming back, all of a suddenthere's no more rentals.
Speaker 2 (33:56):
Reduce immigration from 185,000 to 140,000 in two
years.
Love it.
Okay, that's 45,000 less peoplecoming to Australia.
That's 45,000 less homes thatare needed.
You know we need to be able tocatch up with the rate of
immigration.
At the moment you've got sharehouses in Sydney CBD where
people are renting out balconies, balconies.
Speaker 1 (34:18):
Some of the stuff that's going up, like you see on
the rental things.
It's absolutely crazy, and theamount that they charge for them
as well.
Yeah stupid, literally ashoebox.
Speaker 2 (34:27):
De-register the CFMEU .
I 100% agree with this.
Did you see the news reportthat came out recently that who
the head of the unions are?
Speaker 1 (34:36):
Well, I remember when the news broke that bikies were
involved.
And then what have they done?
They, oh, it's the top of myhead.
They fired everyone becausetechnically, no one's an
employee, they're all volunteers, because it's a union.
Um, they fired everyone and nowthere's a third party
administrator that is nowrunning the show of things
(35:00):
that's's where we're at, I think, yeah, they're all corrupt,
mate, they're all corrupt.
Speaker 2 (35:04):
Look at the trains right now in Sydney, every
single day, we have a traindelay, train delay, train delay,
train delay.
Why?
The train drivers want moremoney.
How much are they getting paid?
I think it's $118,000 a yearsomewhere around there, right,
and they want a pay increase.
Why, around there, right?
And they want a pay increase?
Why?
Because they believe that theydeserve one.
Okay, that's cool, you deservea pay increase.
(35:25):
The government came to thetable and they said hey, we're
actually going to give you a payincrease.
They turned around and said no,it's not enough.
What has happened?
People all across New SouthWales can't get to work.
We now have a more inefficienteconomy.
Okay, our GDP per individual inNew South Wales has decreased
substantially.
Our productivity has decreased.
So how are we, as people,supposed to increase our
(35:48):
productivity, increase our netwealth, if we can't get to
freaking work?
Speaker 1 (35:52):
I agree it's incredibly frustrating with the
trains and things like that andit just seems like well, at this
point it honestly seems likebad faith on both parties
involved that they can't come toan agreement because, as easy
as it is to simply blame theunions and don't get me wrong
I'm certainly losing sympathyfor them, because I catch the
train to work.
(36:12):
I catch the train to work andon the days where it's not
working, it's a goddamnnightmare.
Speaker 2 (36:19):
And how many hours work do you lose?
Speaker 1 (36:21):
Well, it depends.
If I know it's happeninghappening, I'll be able to work
from home and then I lose nohours.
But obviously, if I didn't knowit was happening, that day I
won the train station.
I've already started going andI get stuck at two and gabby
yeah, I'm losing like an hour ortwo at least okay, but also the
stress that builds up, thecortisol that builds up when you
get back to your desk.
Speaker 2 (36:37):
How much less efficient are you?
50?
I couldn't say I've never reallythought about it like that
these are things that, as abusiness owner, you have to
think about.
So me, I'm running a smallbusiness.
Trains are out all of a sudden.
I know my staff are going to beless efficient, so that means I
have to pick up the slack inother areas.
That might mean I need to hiresomeone else okay, to be able to
(37:00):
pick up that slack.
To get back to 100% efficiency.
It's fucked, mate.
That's all I'm going to say.
Speaker 1 (37:07):
Like I said, this is a political thing, whereas I
don't think it's actually goingto affect construction costs.
Speaker 2 (37:12):
Superannuation.
Speaker 1 (37:14):
Sorry to cut you off, keep going.
Speaker 2 (37:15):
Superannuation to buy a first home.
Allow access of up to $50,000or 40% of their super to buy
their first home.
I love this.
Speaker 1 (37:25):
Like I said, I already don't like this, and I
just feel like this willincrease house prices rather
than decrease them.
Speaker 2 (37:30):
Yeah, that's okay, increase house prices, that's
fine.
Speaker 1 (37:33):
Okay, this is part of the problem.
Speaker 2 (37:35):
No, no, no, no, people are struggling to save.
Yeah, we've spoken aboutWoolies, we've spoken about
Woolies, we've spoken aboutColes, we've spoken about all
these different parts of theeconomy where it has become more
difficult for the averageindividual to save.
So let's say you've got a piggybank that you're not actually
allowed to touch and that piggybank accrues interest of 12.1%
(37:57):
per item.
That's the average rate ofsuper adulation.
So it does get anywhere between11% to 12%, depending on the
super fund you're with.
Speaker 1 (38:05):
Yeah, yeah, okay.
Speaker 2 (38:09):
So all of a sudden, I'm making $90,000 a year.
$10,000 or $11,000 every singleyear is going towards my
superannuation.
Yeah, in four or five years'time?
Okay, I haven't been able totouch that money, remember, in
four or five years' time I'venow got $50,000 in my
superannuation account.
Hey, there's a property overthere for $500,000.
(38:32):
Oh, I can buy that with mysuperannuation.
I go and buy that property withmy $50,000.
Okay, I tip it to my super, Igrab that 50 grand, I put it
towards that property.
Okay, now I've got a propertythat's going to appreciate in
value.
So by the time I retire, guesswhat's going to happen?
(38:53):
I'm able to retire based on areverse mortgage or based on the
equity or based on the itemsthat are in my property, because
I was able to purchase that at25, 26 years old.
And you highlighted somethingIf you sell the property, you've
got to put the money back intoyour superannuation.
So let's say I do sell thatproperty.
(39:14):
Let's say I make a profit, Istill have to go put that
$50,000 back into mysuperannuation, so I've still
got money left over forretirement.
This is a better way to setpeople up for the future as
opposed to waiting for them toretire to be able to access
$300,000.
Because I've seen superannuationbalances when people get to 70.
They're $300,000 to $350,000.
(39:36):
Do you know what happens whenyou're 70 years old?
You can't get a mortgagebecause mortgages are based on
30-year terms.
So let's say I'll wait until Iretire to access my house
deposit that I'm going to use topurchase a property.
Guess what?
I am not allowed to get amortgage with most banks because
they're going to look at it asan owner-occupied property.
They're going to say what isyour exit strategy?
(39:58):
And if you can't provide asufficient enough exit strategy
when purchasing a property,they're not going to provide you
with a mortgage.
And you're going to have allthis cash but you're going to be
renting for the next seven toeight years with it.
I changed your mind and youdon't want to agree with me.
Speaker 1 (40:13):
No, I'm just thinking because, again, I'm not an
economist, I'm not even thatgreat at maths.
I'm not even that great atmaths.
Yeah, but I just don't really.
It just doesn't feel right tohave to tap into like.
It feels like why are we inthis position in the first place
, where you have to access yourretirement fund?
Speaker 2 (40:34):
Because people can't save anymore.
Speaker 1 (40:36):
I understand, but like, what are the greatest
situations?
How did we get to this point?
And this is my problem witheverything is I don't really
trust the coalition to keepaffordability, like keep things
affordable or whatever.
It's all about growth.
I mean, fucking Peter Dutton'sgot 26 investment properties.
He doesn't want them to go down.
Government under labor, underlabor, under the liberal
(41:03):
government, the house priceshave jumped up astronomically,
which is great for theirelectorates and the people who
vote for them and stuffgenerally speaking.
But I think overall, like we'rein such a point now, like you
said, people can't save becausepart of it is because of housing
and property prices going up sodramatically.
Like I think I've got a stathere what, what?
Speaker 2 (41:20):
was it?
I'm going to let you in on alittle secret Michael Property's
going to keep going up.
Speaker 1 (41:26):
No, I understand that and that has happened worldwide
.
Speaker 2 (41:30):
Whether you're living in the desert, or whether
you're living in Alaska, whereit's freezing cold, or if you're
living in Sydney, australia,property keeps going up in price
and we can either work with itor we can't.
We can't sit as we are becausewe always have a growing
population.
(41:50):
We've got a world population ofeight point something billion
now.
That's going to keep going up.
People are going to keepreproducing and when people keep
reproducing, more housing is isneeded.
The more housing is needed, themore the demand is going to
increase.
So we can't fight that.
But what we can do is providesomething for the everyday
(42:11):
Australian, provide some sort ofsolution for the everyday
person that has $100,000 a yearsalary but they have $120,000
put aside in theirsuperannuation.
You know makes $200,000 a yearor makes $50,000 a year or
$80,000 a year.
This is a solution for firsthome buyers to be able to
(42:32):
purchase something before theage of 30, as opposed to waiting
to the average first home buyerage in Australia, which is 38
years old.
Build up your super, make extracontributions to it, access
that super and guess what?
You'll be able to go buysomething.
You'll be able to combine thatwith the first home super, guess
what?
You'll be able to go buysomething.
You'll be able to combine thatwith the first home super saver
scheme.
You'll be able to combine thatwith the first home guarantee
(42:55):
and you'll be able to get intothe market.
And they said if you're evergoing to sell the property,
you're going to pay thesuperannuation back.
Speaker 1 (43:01):
So if you're purchasing an unoccupied
property, the chances are thatproperty is going to grow more
in value than what yoursuperannuation would anyways yes
, I, but it just feels like sucha short-term thing and the
growth is not sustainable at acertain point because I agree
with you, like, property pricesare always going to go up, but
it's keeping that relative liketo inflation and quality and
(43:23):
things like that.
So, like, like here you go forexample, in the in the 80s, from
86 to 96 under under labor Ithink it was bob hawk at the
time um, house prices went upnine one, nine point one percent
.
Not not too crazy, but once thehoward government came in it
was 121 percent.
(43:44):
Now that is such an exponentiallike.
That is such a huge amount ofgrowth in such a short amount of
time.
And every time that theliberals are elected those
prices do go up, which againthey're accommodating their base
, which makes sense.
So I'm not.
These are people voting withtheir interests, their
homeowners.
They want their property pricesto go up.
Speaker 2 (44:02):
So labor aren't homeowners.
Speaker 1 (44:03):
Well, no, of course they are homeowners and stuff
like that, but the growth is ata more sustainable level, is
what I'm trying to say?
Like it's not about growth, byall means necessary.
Speaker 2 (44:13):
I'm going to disagree with you because Labor's been
in for the last four years.
They increased the shit out ofimmigration and guess what?
Housing markets still boomedlike crazy.
If you wanted to buy anapartment in Coggera back in
2020 or 2019, it was going to beabout $600,000.
Now you're looking at 850 to900K.
Speaker 1 (44:32):
Yeah, but historically speaking it's never
been like that big a drop.
Speaker 2 (44:33):
But you can't use history.
I'm going to explain why youcannot use history.
Because the markets areever-changing.
If you compared Liberal andLabor governments in the 20s to
the 60s, there is a chance thatthe difference is more, you know
, dramatic, because liberalwould have focused more on the
housing increase.
(44:54):
Labor would have focused on,you know, economic, social
housing policies.
Unfortunately, it is adifferent time.
People are a lot smarter.
People now know that propertyis the way to accumulate wealth
in australia, even big businessall across the world.
They are no longer investing intech.
They are investing in stadiums.
They're investing in hotels.
They're investing in apartments.
(45:19):
They're investing in realestate.
Why?
Because tech has had its run.
They realize that thepopulation of the world is
ever-growing, so they realizethat real estate is where it's
at.
We can either work with it orwe can work against it.
Let's continue on the GreensFreezing cap rent increases for
immediate rental relief.
National renters protectauthority and protect their
entry rights.
Phase out tax benefits likenegative gearing for property
investors with more than twoproperties.
(45:39):
Introduce a discount homekeeperrate to deliver cheaper
mortgages.
Create a public I'm sorry, Ican't.
I can't this.
This is all ridiculous.
Create a public propertydeveloper to build 360 000 good
quality public homes for overfive years.
Extreme wealth property tax, anew land tax on high-end
residential properties oh man,okay, have you read the grains
(46:06):
manifesto?
Speaker 1 (46:07):
I've read bits and pieces and most of the time,
especially like when I wasreading about the extreme wealth
property tax, my first thoughtwas good luck, it's communism.
Speaker 2 (46:15):
The Greens try and support an equal landscape for
all and let everybody benefit.
I'm going to be honest with you.
In economics, in our classes,we are taught to be socialists.
Okay, we are taught thateveryone is equal and everyone
should be able to grow andeverybody should be able to
benefit off each other.
And there's a theory of Ubuntu,and Ubuntu is we grow together
(46:39):
to make something happen.
If I am strong, you are strong.
Unfortunately, the real worldis not like that, and let me
highlight why.
Unfortunately, the real worldis not like that, and let me
highlight why.
In 2022, there was a Redditthread that said does anyone
miss lockdowns?
Speaker 1 (46:57):
Okay.
Speaker 2 (46:58):
I saw this Reddit thread and I thought to myself
oh, this is going to be a joke.
I saw people commenting sayingI love lockdown, I'll wake up at
9, 10.
I would log onto my computerand I would get back into bed.
I love lockdown.
I would wake up at 9.10, Iwould log into my computer and I
would get back into bed.
I love lockdown.
The government was giving me$750 a week and I was able to
get drunk at home every singleday.
I love lockdown all thesethings.
(47:20):
Then, on the other side of thecoin, you saw people going
bankrupt people genuinely goingbankrupt.
Why?
Speaker 1 (47:29):
because, all of a sudden, their places of work
weren't as efficient well, yeah,the whole world shut down, like
the supply chains were ruined,so on and so forth if they're a
cafe owner, they still had topay rent because, guess what,
the landlord has a mortgage andthey have to be able to pay
their items off.
Well, that was like with the.
(47:50):
That was the.
I don't think it was JobKeeper.
Was it JobKeeper where business?
Because the business has gotthe payouts for the JobKeeper
right and then that wasdistributed by the employer to
their employees.
Is that was that how thatworked, correct?
Yeah, I'm just highlighting anumber of things okay.
Speaker 2 (48:04):
So you had all of these items and then you had
people celebrating that theywere doing 10 of the work, just
as much pay, they were gettingdrunk at home, they weren't
being as efficient and stuff.
Unfortunately, the greenssupports those individuals.
The greens think to themselvesthat everybody has the best
intentions for everyone aroundthem at heart which is not true
(48:26):
and to create a level playingfield so everybody can rise, and
then punish those that risefaster than the people that have
risen slower.
It's barbaric, because peoplehave ambition and people want to
grow.
And if you are going to punishthose for growing in an ethical
way, for growing in a way whereI have more than two investment
(48:50):
properties, so all of a suddenmy negative gearing should be
taken away, it's arsenite.
I understand where the leadersof the Greens are coming from.
I understand the theory behindit.
However, in the practical worldthis will not work, because
people are selfish, people aregreedy and once you hit a
(49:11):
certain income level, peoplebecome lazy.
They no longer chase the dreamsthat they wanted beforehand.
So once people get to that$120,000 a year salary, they
actually start dropping off abit in their productivity, and
what the government wasproviding was a way for people
to get there with minimal work,and what the Greens are doing is
they support those individuals.
(49:31):
So for adam brant or whoeverthe leader of the greens at the
moment is to come, for him tocome, turn around and say no,
we're going to tax the wealthy,let's tax the rich and give it
to the poor.
I'm going to highlight something.
If you took all the wealth inthe world and you distributed it
equally amongst everyone, thereis a theory that within 12
(49:53):
months time, the curve would beexactly the same.
All the people that accumulatedwealth previously would become
more wealthy.
All the people that didn'taccumulate wealth will become
less wealthy.
And what the Greens areconstantly trying to do is
punish those that have becomewealthy through property,
through strategic investment,through risk-taking and making
those developments, and they'retrying to reward individuals out
(50:15):
there who want to sit at home.
So anything that the Greenshave said I'm throwing out.
Anyways, that was our episodeon politics.
I think we went for 50 minutes,yeah.
Speaker 1 (50:27):
I'm sweating.
It's hot under these lights.
We have to turn the aircon on.
Speaker 2 (50:33):
I'm not going to do.
I'm not going to do anyshameless plugs.
I'm not going to do anythinglike that.
All I'm going to highlight isI've been Joe, that's been
Michael, and we'll see you onthe next episode.
1.2 million new homes by 2030, more tradies.
We cut construction red tape.
The home guarantee schemehelped to buy and you got a
better deal for renters.
It's the hot button topic goinginto this election, and cost of
living as well 1.2 millionhomes.
Speaker 2 (00:17):
Is it enough?
It's not about greedy landlords.
Greedy landlords didn't existuntil these interest rates
started to go up.
People need to understand thedifference between Labor and the
coalition.
And People need to understandthe difference between labor and
the coalition and they need tounderstand the differences in
their housing policies.
Our GDP per individual in NewSouth Wales has decreased
substantially.
Our productivity has decreased.
(00:38):
So how are we as people,supposed to increase our
productivity, increase our netwealth, if we can't get to
freaking work Sharehouses inSydney CBD where people are
renting out balconies?
How did we get to this point?
I want to ask you do youdisagree with any of this?
Speaker 1 (00:57):
Mostly for me and people at my age, it's not bad.
Welcome to the Finance Showwith Joe.
He's Joe, I'm Michael and todaywe're going to have a very fun
episode.
We're talking about housingpolicy in the upcoming election.
Speaker 2 (01:11):
So a lot of listeners might consider this episode to
be boring.
Politics often is.
Speaker 1 (01:20):
Well, actually it hasn't been for the last few
years.
I would like it to be a littlemore boring than it has been.
Speaker 2 (01:26):
However, this is a very important episode because
people need to understand thedifference between labor and the
coalition, yeah, and they needto understand the differences in
their housing policies.
You know, labor leans onedirection and then the coalition
leads a different coalitionbeing.
You know liberals and nationals, yeah, um, labor being you know
the current, the current laborwith the sprinkling of the
(01:49):
greens, depending on if theylike them today or not oh man,
we can get it.
Speaker 1 (01:53):
We'll get into that bloody green saying one thing
and just refusing.
I wish the greens were morepragmatic.
It would just make them easierto like.
Well, we'll get.
We'll get into it once we startactually talking about policy.
But they, you know, is it aminority government right now?
Um, with labor, like they don'thave a majority right they
don't have a majority.
However, they're still in poweryeah, yeah, they work with the
(02:17):
crossbench, yeah with the greensand stuff like that.
Correct, but it's just, it's aclub in a happy relationship,
it's it's a happy relationship.
Speaker 2 (02:24):
It's a mess over there.
A lot of people who havewatched these episodes before
they know which way I lean.
I am a lot more conservative, Iam a lot more for small
business, big business, and Ihave reasons behind that.
Yeah, and we're going to unpackall of that today.
Speaker 1 (02:39):
I am typically a little more left-leaning when it
comes to housing policy.
Mostly, for me and people at myage, it's more about
affordability and supply, whichI mean.
It is the hot button.
It's the hot button topic goinginto this election and cost of
living as well, obviously.
Speaker 2 (02:56):
So, michael, you've got some really good hot points
on the Labor and Liberalgovernment and their housing
policies.
Can you quickly run througheach one?
Just tell the listeners youknow what each government is
proposing.
Speaker 1 (03:10):
Yeah, I'll give you the real, real basic stuff.
And, just for reference, this isall from each party's websites.
This is straight from thehorse's mouth.
I'm not coming up with anything.
So for Labor, we've got the $10billion Housing Australia
Future Fund.
That's 30,000 affordable homesin in five years.
That has been recently blockedby the coalition and greens.
The other policy is homes foraustralia.
(03:31):
Now this is their big policy.
Um, for long-term things 1.2new, 1.2 million new homes by
2030, more tradies, which islike a mixture of immigration
and more free training, cutconstruction red tape and
incentives to state governmentsto continue building homes.
You've got the home guaranteescheme, which includes, like the
first home guarantees, allthose like family home
(03:52):
guarantees for first home buyers.
You've got the recent help tobuy that just became law in
February.
That's the governmentcontribution of up to 40% for
40,000 low and middle incomehouseholds to purchase a home.
And you, you got a better dealfor renters.
This is about strengtheningrenters' rights, so that's
things like minimum rentalstandards, limiting rent
increases to once a year andrequiring genuine, reasonable
(04:15):
grounds for eviction.
And you've also got theNational Agreement on Social
Housing and Homelessness $9.3billion to states and
territories to combathomelessness and repair social
housing, social HousingAccelerator.
So another $2 billion to helpstates and territories build
4,000 homes, excluding HECS frommortgage applications and the
(04:36):
housing support program, whichis $1.5 billion for
infrastructure and amenitiesacross Australia, which should
provide 25,000 new homes in justNew South Wales alone.
Speaker 2 (04:42):
Serious tongue twister there from the labor
government says they, they havethere.
Speaker 1 (04:48):
I'll give them this.
They have a long series ofpolicies and it was very
interesting going through eachof their websites and how they
presented this information.
You know labor.
They had it in like uh tablesand graphics explaining each
thing with like little dotpoints to explain.
The coalition had a essentiallya long blog post that I had to
decipher what their points were,and then the greens had a
essentially a long blog postthat I had to decipher what
their points were, and then thegreens had a fucking manifesto
with like numbered points thatwent up to like 60 or 70 and I'm
(05:11):
like, oh, this is so hard toread anyway that was interesting
.
Speaker 2 (05:15):
I just want to break down each of labor's points.
Okay, so we've got a 10 milliondollar housing australia future
fund, so that's 30 000affordable homes in five years.
Speaker 1 (05:24):
Yeah, and that's been blocked by the coalition and
the grains yeah, that's, that'sbeen stalled, and that's been
stalled for a while so 10billion dollars for 30 000
affordable homes, that's, youknow, a cost per acquisition of
333 000 for each home.
That's not feasible well, Iguess it would depend on, like,
what they're building and howthey're building it.
Speaker 2 (05:44):
But yeah, I don't understand, with construction
costs and stuff because we weretalking about this in the last
episode that the constructioncosts just keep going up
construction keeps going up,land acquisition keeps going up,
you know, uh, the cost of laborkeeps increasing and there are
so many different metrics at themicro and the macro level that
are causing these cost increases.
(06:05):
But that's not going to happenand I think the reason why the
coalitions and the gradesblocked it is because they know,
budget-wise, that's going toblow out.
So what the government alwaysdoes every single year is they
release a budget.
Yeah, of course, and when theyrelease a budget, you know this
is what we want to adhere to,this is what we want to achieve.
Speaker 1 (06:25):
Last year, the big winner was electricity bills
yeah, yeah, there waselectricity bills and uh like,
uh stuff for domestic violence,things like that yeah.
Speaker 2 (06:34):
So putting aside 10 billion dollars for australia's
future fund, 30 000 affordablehomes in five years that's,
that's a pipe dream.
That's not going to happen.
So I'm going to cross that oneout.
Okay, homes for for Australia1.2 million new homes by 2030,
more tradies, cut construction,red tape, incentives to state
governments this I like a littlebit more.
Speaker 1 (06:56):
Yeah, this is the overall goal.
So, like all these littlepolicies and stuff kind of
working towards this one bigthing, yeah but 1.2 million
homes, is it enough?
No, it's interesting too.
It was 1.2 million in fiveyears.
This was going back three yearsnow and it wasn't feasible.
(07:16):
It's not happened.
They pushed it to 2030 now.
Speaker 2 (07:19):
If you look at Labor's recent immigration
policy, it's been increase,increase, increase the amount of
people coming to Australia.
Speaker 1 (07:25):
Yeah, but they have been dropping it steadily over
the last two years.
I think the big reason whythere were so many immigrants
like immediate post-lockdown itwas the backlog, wasn't it from
COVID?
Speaker 2 (07:40):
No, it wasn't just the backlog.
There was a lot of individualsthat were allowed to come in on
student visas, on professionalvisas, the workplace visas and
stuff.
A lot of them had fakedocumentation.
A lot of them had applied forthese visas unethically.
Let's say, go pay somebody Xamount of dollars and they'll be
(08:02):
able to get you a visa inAustralia, and essentially what
we had was a large amount ofmigrants that weren't skilled
migrants.
We also had a large amount ofmigrants that weren't actually
students.
Speaker 1 (08:13):
Yeah, I know about the student one because they've
been, because they've recentlytightened up now that student
visa and the studentrequirements and things like
that.
Speaker 2 (08:20):
The reason I'm bringing this up, though, is I
think we let in a lot morepeople than 1.2 million over the
last couple of years, and I'dhave to look up the numbers.
You can't only look at, youknow, 1.2 million new homes by
2030 and just think about theimmigration.
You also have to think aboutall the people that are turning
18 now.
Yeah, you know all the peoplethat already exist in australia,
(08:42):
all the people that are intheir 30s and 40s that haven't
purchased a home yet.
Oh, is that 1.2 million newhomes going to suffice?
No, but what I do like isthey're cutting the construction
red tape, because it'sessential right, right, right
now, in this current situation.
I need to see something inwriting.
I need to see an actualproposed bill that is going to
(09:06):
decrease the amount ofconstruction red tape,
especially in New South Wales.
In New South Wales, we have aserious housing problem.
The housing problem doesn'tstem from the lack of land or
the lack of people willing towork.
It stems from the feasibility.
So when you approach a lenderas a property developer, as a
(09:27):
builder, they look at thefeasibility.
They see if it stacks up, andwhat I mean by stacks up is they
need to see if it's making a15% profit or more in order to
be able to fund a project.
So let's say, you purchasesomething for a million dollars.
It's going to cost $1.5 millionto complete the construction.
(09:50):
So that's $2.5 million If thetotal cost of construction, the
total cost of acquiring the landand stay-at-duty holding costs,
if the profit on top of thatisn't 50% once you sell, the
$2.5 million worth of propertyor whatever, they're not going
to fund it.
Speaker 1 (10:10):
Yeah Well, it's profit-driven, and if there's no
profit in it, then it's harderto get loans and stuff like that
, so a lot of the constructionred tape hasn't come from the
government per se.
No, I thought it came from morelike state and council
governments.
Speaker 2 (10:24):
You are correct.
So it's a lot more expensive tobuild, okay, and it's a lot
more expensive to insure.
It's a lot more expensive tohold.
So they want so the governmentwants more housing, but they
also want the housing to beregulated.
Under the current red tape thatthey have, it's not feasible.
Okay, land in New South Walesis expensive, yes, and then,
(10:49):
once you look at all the coststhat are incorporated with that
or included in that, developersand builders aren't looking at
new south wales as a profitableventure anymore.
So that's why you're seeing,for example of the last episode
manny mentioned stocklands okay,stocklands is a large property
developer and they're looking atareas like Queensland, regional
Queensland.
(11:09):
Why?
Because they're going to makemore money up there than they
would in New South Wales.
Speaker 1 (11:13):
Question about the Stocklands thing Is it the same
Stocklands that do the shoppingcentres Correct Like that,
stockies?
Oh, wow, okay, I didn't knowthey were property developers.
Yeah, so the developers as well.
Speaker 2 (11:21):
So you look at those items and you have to think to
yourself okay, how can wedecrease the costs for
developers and builders toincentivize them to build in
metropolitan areas?
This also includes Melbourne,this also includes Brisbane.
You have to look at all themajor capital markets and ask
(11:43):
yourself why are developers notwilling or not wanting to buy in
these areas?
And the reasons are clear asdaylight it's because it's too
expensive.
That's why they're looking atthe regional areas.
That's why they're looking at,rather than looking at,
melbourne CBD.
They're looking at GeelongRather than looking at Sydney
CBD.
They're looking at Penrith,they're looking at Oren Park.
They're looking at Sydney CBD,they're looking at Penrith,
(12:04):
they're looking at Oran Park.
They're looking at Wollongong,for example.
They're looking at Newcastle.
These areas are so much cheaperto be able to build in.
Why?
Because the cost of land ischeaper to acquire and once they
start building in those areas,the people that are able to
enter the market because ofinterest rates being so high are
able to afford it.
You know a tradie living in NewSouth Wales sorry, a tradie
living in Sydney, an electricianliving in Sydney and an
(12:27):
electrician living in Newcastle.
What's the variance on theirincome?
It's got to be 5% to 10%.
Maybe it's not going to be toohigh.
You know, one might make$180,000 a year.
Another one might make $200,000a year.
I'm just spitballing.
Speaker 1 (12:40):
Yeah, what you're saying is there's negligible
differences.
Speaker 2 (12:43):
But somebody that's looking to buy a property in
Sydney, that might be $1.5million.
If you're purchasing inNewcastle, it might be $800,000.
So I agree they need to cut theconstruction red tape.
It is way too expensive tobuild in areas like Sydney and
that's because of all the addedcosts that they've created.
There is a high probabilitythat if there was a decrease in
(13:07):
the amount of red tape aroundthe construction industry, the
housing market would boom againand people when I say people,
developers would be more willingto jump into the market again
and start developing in theseareas.
But unfortunately right nowthey've added too much red tape
around the construction code andthey're not willing to jump in.
There's something calledhomeowner's warranty.
(13:29):
Homeowner's warranty exists forproperties two stories and
under.
So if you're building alarge-scale townhouse
development, there is ahomeowner's warranty that you
need to pay for every single lot.
Okay, two stories and under.
So townhouses, you're not goingover three stories, it's all
going to be two stories.
If you look at that, that isgoing to cost more to develop
(13:54):
and build than it would todevelop and build apartments.
The problem is with apartmentsis nobody wants to buy them
anymore after what happened withthe mascot towers and the Opal
Tower, so people are scared ofthem.
Speaker 1 (14:06):
Yeah, for those who don't know, it was dodgy builds
and they were kind of fallingapart, right yeah.
Speaker 2 (14:12):
So cutting the construction red tape.
I agree with yeah, Homeguarantee scheme.
Speaker 1 (14:17):
I think this is just a continuation of the stuff that
I've said.
Speaker 2 (14:19):
No, no, no, no.
I just need to bring upsomething.
Speaker 1 (14:25):
That was Liberals' idea.
Yeah, no, they're justcontinuing it on.
Yeah, yeah, this is based oninformation because this is from
the 2024 budget, which isactually set to change upcoming,
but I can't imagine thatthey're going to change too much
.
Speaker 2 (14:37):
I think that's just bollocks.
Okay, as the British would sayHelp to buy.
I hate this scheme.
I hate this scheme.
Do you know how many peoplecould qualify for the help to
buy scheme?
Speaker 1 (14:48):
We talked about the.
What was it?
Well, there's 40,000 positions,I know that much yeah.
Speaker 2 (14:54):
And I can guarantee you maybe 400 are filled up.
It is so hard, so hard to getaccess to this scheme that I
wonder why it even exists.
Speaker 1 (15:03):
Well, it's for low-income holders.
Speaker 2 (15:06):
Okay, low-income holders, but by the time you
factor in interest rates and allthe other costs, it doesn't
benefit them anymore.
They are actually better offrenting than actually applying
for this scheme.
And then the government's goingto own 40% of their property.
What happens when they need tosell the property?
Does the government get 40% ofthe profits as well, or do they
(15:27):
just get their money back?
Speaker 1 (15:28):
No.
So how it works is thegovernment puts in the initial
40% and it depends on you.
You can pay that off and buy itback from the government.
The goal is that you would buythe whole thing off, because the
idea is not for investment oranything like that, it's purely
owner occupied um.
(15:48):
So the idea is over time you'dbe able to buy you own it.
Speaker 2 (15:52):
Okay, you've changed my mind on that one.
That one I'm gonna.
I'm gonna surrender a betterdeal for renters strengthening
renters rights, minimum rentalstandards, limiting rent
increases to once a year andrequiring general reasonable
grounds for eviction.
This one I like.
(16:17):
However, 2023 and 2023, wheninterest rates spike like that,
and if they ever spike like thatagain, you are going to see
people foreclose on theirproperties because of a one-year
rule.
Speaker 1 (16:23):
It's one of those things where it's like it's that
delicate balancing act of youknow the rent.
We saw the crazy rental linesyou know, going down the street
for you know an apartment orwhatever, and I mean it's a
reaction from a lot of people tohelp strengthen rents because,
you know, you heard horrorstories.
I mean I heard, like I knowpeople where they got kicked out
(16:44):
for no real reason other thanthe fact that the owner, the
landlord, knew they could getmore money by evicting this
person.
I'm not saying that's whatevery landlord is doing.
Speaker 2 (16:55):
No, no, no.
This is actually a goodargument.
I'm going to close the iPad.
Let's say I'm a schoolteacher.
Let's say I'm a school teacher.
Yeah, okay, as a school teacher, I know that my salary is a lot
lower than other individuals.
Yeah, I'm making $85,000 to$95,000 a year.
(17:15):
Okay, I have done well formyself and I have been smart.
I've been a smart person and Ihave invested in different
regional areas.
Okay, I've got two investmentproperties.
I've got two investmentproperties and I have held these
investment properties for threeyears or so.
In this time that I have heldthese investment properties, my
(17:37):
interest rates went up 4%.
Yeah, okay, and I am nowlimited, as a school teacher, to
increase the rent on my tenant.
I am now having money takenaway from me by the banks for
something I cannot control atall.
(17:59):
I can't control that.
I'm having money taken away fromme and I need to increase my
rent yeah okay, I have a tenantthat's in there and they're
paying five hundred dollars aweek.
Yeah, my interest rates havegone up x amount and I need to
increase the rent to 550 a week.
Yeah, okay, yet again, I'm justa school teacher.
(18:20):
All of a sudden I request fromthe tenant hey, this is the
market value, this is what Iwant to increase it to.
I have to increase it to 550.
I'm sorry, but this is justbecause of my circumstances.
I only earn 95 000 a yearpre-tax.
Am I now a bad person?
Speaker 1 (18:37):
no, no and I.
But that's the thing that's.
You know, that's an extra 50,right 500 to.
The problem was it was crazyincreases, like when I left my
apartment after I bought.
My landlords were actuallyquite nice to us and they
increased it.
They showed us the report as towhy.
Because, again, property values, this is what the median rent
is now.
This is just what should beexpected.
(18:59):
So they increased it, maybelike $20, $30 sort of every year
, but as soon as I left, theyincreased it by $200.
Speaker 2 (19:07):
Okay.
Speaker 1 (19:08):
Yeah.
Speaker 2 (19:08):
But where were you living?
Speaker 1 (19:10):
I was in.
Speaker 2 (19:10):
Wollstonecraft Okay, so Wollstonecraft is a very
premium area.
Speaker 1 (19:14):
Yeah, it is.
Speaker 2 (19:15):
In Sydney.
Yeah, it's right next to NorthSydney, I believe.
Speaker 1 (19:18):
Yeah, literally it's in between North Sydney and
Crow's Nest.
Speaker 2 (19:21):
Okay, so it's a beautiful part of Sydney.
Yeah, it north sydney andcrow's nest.
Okay, so it's a beautiful partof sydney.
Yeah, it's very nice, do younot think there's a high?
Speaker 1 (19:32):
probability that their interest rates increase so
much and that they need to payoff that amount.
It was interesting because theycould have I mean, they could
have just increased our own,like my current rent at the time
, to buy that much.
Clearly because, like they hadthe data and they only increased
it by the minimum recommendedrecommended amount because we
were never late with rent, wedidn't break anything you know
like for all you were goodtenants.
We were good tenants and theytreated us as well as they could
(19:52):
.
And I understand, like my like,I understand that landlords
raise rents not because they'regreedy, it's because, yeah,
rates rise.
But again it's that.
It's that some, there are somelandlords who really put like no
effort in and they don't, theydon't care too much, like they
don't want to repair things.
(20:13):
You call them and you're like,please, like, let's just say the
fly screen's broken, I justneed this fly screen repaired
and it takes three months andyou you've been texting them
fucking every day, every week,those kinds of things.
However, I do tend to agreethat limiting rent increases to
once a year, like you said, ifthere's a spike again and
(20:35):
interest rates went up, it wasquarterly rises, right, it was
0.25% every month for like godknows how long yeah, exactly.
And if you're limited, um, ifyou're limited to only one rent
rise that year and you didn'tthink that the interest rates
were going to keep going up,you've now not.
You're not covering those coststhe same way you would have if
(20:56):
you could have adjusted multipletimes so effectively if I'm
only allowed one rent rise ayear?
Speaker 2 (21:01):
yeah, okay, I've got two kids at home that I need to
feed and now I can't afford myhome loan repayments, my
investment loan repayments.
Yeah, all of a sudden I call upthe bank and I say, hey, can
you please put a pause on myhome loan repayments just for a
few months, just so I couldcatch up.
Do you know what happens to thecredit report then?
Speaker 1 (21:21):
yeah, that doesn't look good.
Speaker 2 (21:21):
your credit rating down you go into something
called financial hardship.
Okay, when you are in financialhardship, guess what happens
after that?
You can't apply for a differentloan for over 12 months, okay,
okay.
So everyone thinks ofthemselves greedy landlords,
greedy landlords.
It's not about greedy landlords.
Hmm, greedy landlords didn'texist until these interest rates
started to go up.
Okay, I never heard this termgreedy landlords, greedy
(21:45):
landlords until the interestrate spike started to occur,
because a lot of people theyrent, they rent out their
properties based on what themarket is asking for.
Speaker 1 (21:55):
Yeah.
Speaker 2 (21:56):
If my repayments are this much, this is how much I
need to charge in rent becauseI've got kids at home.
So this exact policy thatLabor's preaching I don't agree
with and I am going to continuenot to agree with it, because I
think it's unfair to good peoplewho have saved up, who have
purchased investments, who aretrying to set themselves up for
(22:18):
retirement and then all of asudden they are being handcuffed
again by a government that doesnot understand what is actually
happening in the market.
Speaker 1 (22:26):
I agree with the again with the limiting rent
increases to one year.
Don't I think that's that's,that's too difficult.
However, I do agree withminimal rental standards and
having reasonable grounds foreviction, because I mean, I
think people, when they they arepaying for this, and I think
that these houses should be upto a certain standard, and if
(22:47):
you can't afford to keep yourinvestment property to that
standard, well then you can'tafford the investment property.
That's how I think of it?
Speaker 2 (22:54):
What if wages don't increase at the same time as the
interest rates?
I know?
And then what about the cost oflabour to to get something?
Let's say I've got a fly screenthat needs to be repaired.
Actually, perfect example.
I've repaired a fly screenrecently in my house.
Okay, it's for my door, wholebackyard.
Okay, this cost me two thousanddollars.
Okay, for me to get someone outthere repair it, measure it,
(23:17):
all that sort of stuff.
Call out for you that I've beenabout 2400 with cost of labor
and everything.
Let's say I rented out myproperty and I got $600 a week.
That tenant lies and tells usthe fly screen is now broken,
when really their dog was theone that ran through it and I
now have to pay for it.
It's $2,400.
So that whole month's rent gone.
(23:38):
I've now needed to pay for thefly screen at the same time.
And then I've still gotmortgage repayments at the end
of that month of, let's say,three thousand dollars.
Is that fair?
Speaker 1 (23:49):
well, to an extent, again, it depends like if you've
, if you've got a.
This is why people don't putdogs on there, like when they
don't want dogs in their rentalsbecause of things like that.
Like it's not really the dog,well, you should be able to
train your dog to not break thethe fly screen, but at the same
time, you know, happenssometimes like that so happens,
but it's the landlord's faultnow well, again, this is how
(24:10):
this is, when the ombudsman andstuff come in and like, uh, all
that sort of stuff but this iswhat I'm trying to explain.
Speaker 2 (24:16):
It shouldn't have to take an ombudsman to come in.
It shouldn't have to take thesesorts of things.
I know 150 real estate agentsthat just focus on rentals.
Okay, and I'm telling you now,each one of those people have at
least 50 people, 50 tenants,that they're taking care of.
Not every single one of them isverifying their rental
(24:36):
applications.
Not every single one of them isgoing to be able to go to the
houses and do an inspection andguess what?
100% guarantee that there is adog at one of these premises
that was listed as a cavoodleand when you get there it's
actually a golden retriever, andthat golden retriever has
damaged the property and nowit's on the landlord to fix it.
So, whatever the Laborgovernment theoretically you
(25:00):
know their overarching belief is, it's going to impact the
everyday Australian, because theeveryday Australian is the
landlord.
The everyday Australian hasbeen taught, has been bred, has
been, you know, uh, notassimilated, uh, brainwashed.
To think that brainwashed?
Now, that's not the right wordeither, but you know what I'm
saying.
(25:20):
That property is the way tobuild wealth in australia and if
you're going to have one rentalincrease per year, this is
going to heavily affect them inbeing able to maintain their
investment loans and theirinvestment properties.
All right, social housingaccelerator two billion dollars
to help states and territoriesbuild for 4 000 homes.
(25:42):
I want to actually see thefeasibility analysis of that one
.
I'm so sick of these balloonnumbers.
Yeah, we're gonna put twobillion dollars and we're gonna
do 4 000 homes.
Just just just give me anactual funding table.
Show me where the propertiesare going to be.
Speaker 1 (25:55):
Show me where everything's going to be oh, and
then that, and that's honestly,if that's fucking across the
board for all of them, they justsort of throw out these numbers
and again, like I tried to lookfor exactly what you're saying
and none of them have it.
Speaker 2 (26:09):
They're just all bullshit round numbers yeah,
exactly.
Okay, exclude HECS frommortgage applications.
We spoke about this a couple ofepisodes ago, I think I almost
got fired from Macquarie Bankfor bringing up this argument,
and now the government wants tobring it in.
I'm taking credit for this Backin 2018, I came up with this
idea Housing support program at$1.5 billion for infrastructure
and amenities across Australia.
We discussed this one as wellExactly At 25,000 new homes in
(26:32):
New South Wales alone.
That's fantastic.
I want to actually see it putto paper.
Let's go through the coalitions.
Yes.
Speaker 1 (26:37):
Yes.
So the coalitions have a fewthings they aren't throwing
around.
Let me just read it.
So their big thing is thehousing infrastructure program.
That's $5 billion to enableinfrastructure like water, power
, sewage and access roads.
Allegedly that's 500,000 homes.
Where that's coming from, wedon't know.
(27:00):
That funding is based on a useit or lose it basis, so if
there's no progress within 12months, you don't get any
funding.
So they want to freeze theNational Construction Code for
10 years.
It's controversial in theindustry because the leader of
the I can't remember his name.
Regardless, one of the industryheads was worried about quality
(27:23):
and innovation and how thatmight compromise it.
Like they're on board with alot of the coalition's things,
but not so much the freeze onthe national construction code.
Another one for them is thetwo-year ban on foreign
investors and temporaryresidents purchasing existing
homes in austral, cappingoverseas students, reducing
immigration from 185,000 to140,000 for two years.
(27:45):
Deregister the CFMEU, which isthe big construction union, and
using superannuation to buy yourfirst home.
So that allows access up to$50,000 or 40% of your super to
buy your first home and thatneeds to be returned when the
house is sold I want to ask youdo you disagree with any of this
?
um, I'm not gonna.
(28:06):
I'm not gonna pretend like Iknow much about the construction
code, so that's more of aquestion mark on my end.
Um, the housing infrastructureprogram, I don't really see how
five billion will equal to 500000 homes, like if what was it?
Speaker 2 (28:19):
it's another umbrella , bullshit number yeah yeah, in
general.
Speaker 1 (28:23):
Like building infrastructure, yeah, that's,
that's all good.
But labor has a has a verysimilar one.
The super energy, uh, thederegistered cfmu.
That seems more like apolitical thing.
I again, I don't work inconstruction.
I don't know much about how,like, what kind of costs these.
This is happening, um, so again, sort of a question mark, but I
(28:43):
feel like that's more of apolitical move based on the
recent controversies.
Reducing immigration yeah,that's pretty standard.
I expect that from thecoalition.
Capping overseas students Again, that's standard as well.
The two-year ban on foreigninvestors on buying existing
homes that's not bad.
What I dislike the most is thesuperannuation to buy a first
(29:06):
home because it's framed in sucha way as, like, you buy a home,
so therefore you have somethingto live in and you have equity
when you retire, right.
But it kind of just feelsbackwards to use your retirement
money to buy a retirement plan,like I don't like the idea of
tapping into your retirementfund to set yourself up for
(29:29):
retirement when really thereshould be other schemes involved
to help you have to help homeownership.
I don't know what are yourthoughts I I love everything.
Speaker 2 (29:40):
First of all, I don't like the housing infrastructure
program because it's anotherbullshit number.
Random numbers thrown out soI'm just going to cross that one
out.
It's bullshit.
I don't care what I do like isthe funding provided on a use it
or lose it basis.
No progress within 12 months,no funding.
I love that.
I absolutely love that, becauseI've seen so many times
government grants be given youknow, oh, they get rewarded,
yeah, yeah, everybody getsrewarded.
No, they're saying hey, if youdon't do this in 12 months guess
(30:00):
what we're taking the manytimes government grants be given
.
You know they get rewarded.
Yeah, yeah, Everybody getsrewarded.
No, they're saying, hey, if youdon't do this in 12 months,
guess what?
We're taking the funding awayfrom you and you're not going to
have access to this.
Okay, so you better get started.
You're not allowed to go spendthat money on some bullshit.
Get started on your projects,because we need a better
Australia.
So I do like that one.
Freeze the NationalConstruction Code for 10 years.
Bellissimo.
(30:21):
Every single year, the NationalConstruction Code.
There's changes to it, there'sthings that are added to it.
They want to freeze this.
They think that we have enough.
We have enough policy aroundconstruction right now.
They don't want to add anythingfurther to it.
Speaker 1 (30:37):
Yeah, and I don't disagree with that part, it's
the it wouldn't freezing it.
So we were talking about how weneeded to cut red tape for
construction.
Wouldn't freezing the nationalconstruction code sort of lock
in what we've got right now,which we already said is
inefficient?
Wouldn't this prevent thatcutting of red tape?
Speaker 2 (30:52):
Yes, However the code that we have now is good, but
people can't keep up.
So every single year, theconstruction code changes and
they add more to it.
So let people catch up for thenext 10 years.
Let them catch up, let them getused to the systems that we
have in place so that we havethe better quality builds that
they've hoped for from thenational construction code.
(31:13):
Yeah, but at the exact sametime, they're not having things
randomly added.
You know, halfway through abuild, let's say, you start
building in January and you'refollowing the 2024 national
construction code and then, allof a sudden, your project got
delayed because of rain,flooding, whatever.
And then, all of a sudden, the2025 code has come in and now
you've got to adhere to that,okay.
So all of a sudden, the 2025code is in and all these extra
(31:37):
items have been added to yourbuild, and now you can't afford
it yes, and I agree that addingthis stuff is only going to
increase costs and delays yeah,and delays and things like that.
Speaker 1 (31:49):
But I think freezing it does just sort of lock us
into what we've already gotright now and we're already
complaining that we can't wecan't build enough to match
demand.
Speaker 2 (31:57):
I'm I'm going to agree with you there.
However, if this is the onlyplan, or if this is the only way
we can move forward, they can'tremove things, they can only
freeze it.
I would rather they freeze itand stop adding, as opposed to,
um, you know, allowing it tocontinue and more items get
(32:17):
added every single year to makesure that your building is up to
code.
Speaker 1 (32:21):
Well, you guys.
Let us know because I just canthey remove things from the
construction code like is that,is it flexible in that sense?
Um, we don't know, I'm not sure.
Speaker 2 (32:32):
Yeah, we don't know, but if it's just a freeze,
rather than adding consistently,or rather a freeze um two-year
ban on foreign investors andtemporary residents purchasing
existing homes in australia.
This is beautiful.
This is music to my ears yeah,yeah, however yeah, the cheapest
properties in australia arealways going to be off the plan
purchases.
Yeah.
The new, new, new ones, yeah,and all this is doing is pumping
(32:55):
that market up.
The existing home markets isalready pumped up.
That's already inflated.
Yeah yeah, that they're doingjust fine, they're just doing
just fine, so you know there'sgoing to be less people on that
side.
It's actually going to devaluesome of the properties, I
believe.
However, off-the-play purchasesthat's where, a lot of the time
, people are able to findthemselves bargains.
(33:17):
That's when you're able toinvest in new areas.
If a foreigner who is amulti-millionaire billionaire
can only buy brand new homes inAustralia, they're going to buy
the shit out of brand new homes.
Speaker 1 (33:29):
Yeah, of course I mean, especially because it's
all like I mean, it's easytechnically speaking you pick, I
want this pot, I want this pot,put that kind of house on it
and you go do it.
I don't have to touch it now.
Capping overseas students loveit.
I mean, yeah, that's been onthe cards for a long time on
both sides of the aisle on thatone, mostly because, again, that
(33:49):
rental crisis that occurredjust after lockdown, everyone
coming back, all of a suddenthere's no more rentals.
Speaker 2 (33:56):
Reduce immigration from 185,000 to 140,000 in two
years.
Love it.
Okay, that's 45,000 less peoplecoming to Australia.
That's 45,000 less homes thatare needed.
You know we need to be able tocatch up with the rate of
immigration.
At the moment you've got sharehouses in Sydney CBD where
people are renting out balconies, balconies.
Speaker 1 (34:18):
Some of the stuff that's going up, like you see on
the rental things.
It's absolutely crazy, and theamount that they charge for them
as well.
Yeah stupid, literally ashoebox.
Speaker 2 (34:27):
De-register the CFMEU .
I 100% agree with this.
Did you see the news reportthat came out recently that who
the head of the unions are?
Speaker 1 (34:36):
Well, I remember when the news broke that bikies were
involved.
And then what have they done?
They, oh, it's the top of myhead.
They fired everyone becausetechnically, no one's an
employee, they're all volunteers, because it's a union.
Um, they fired everyone and nowthere's a third party
administrator that is nowrunning the show of things
(35:00):
that's's where we're at, I think, yeah, they're all corrupt,
mate, they're all corrupt.
Speaker 2 (35:04):
Look at the trains right now in Sydney, every
single day, we have a traindelay, train delay, train delay,
train delay.
Why?
The train drivers want moremoney.
How much are they getting paid?
I think it's $118,000 a yearsomewhere around there, right,
and they want a pay increase.
Why, around there, right?
And they want a pay increase?
Why?
Because they believe that theydeserve one.
Okay, that's cool, you deservea pay increase.
(35:25):
The government came to thetable and they said hey, we're
actually going to give you a payincrease.
They turned around and said no,it's not enough.
What has happened?
People all across New SouthWales can't get to work.
We now have a more inefficienteconomy.
Okay, our GDP per individual inNew South Wales has decreased
substantially.
Our productivity has decreased.
So how are we, as people,supposed to increase our
(35:48):
productivity, increase our netwealth, if we can't get to
freaking work?
Speaker 1 (35:52):
I agree it's incredibly frustrating with the
trains and things like that andit just seems like well, at this
point it honestly seems likebad faith on both parties
involved that they can't come toan agreement because, as easy
as it is to simply blame theunions and don't get me wrong
I'm certainly losing sympathyfor them, because I catch the
train to work.
(36:12):
I catch the train to work andon the days where it's not
working, it's a goddamnnightmare.
Speaker 2 (36:19):
And how many hours work do you lose?
Speaker 1 (36:21):
Well, it depends.
If I know it's happeninghappening, I'll be able to work
from home and then I lose nohours.
But obviously, if I didn't knowit was happening, that day I
won the train station.
I've already started going andI get stuck at two and gabby
yeah, I'm losing like an hour ortwo at least okay, but also the
stress that builds up, thecortisol that builds up when you
get back to your desk.
Speaker 2 (36:37):
How much less efficient are you?
50?
I couldn't say I've never reallythought about it like that
these are things that, as abusiness owner, you have to
think about.
So me, I'm running a smallbusiness.
Trains are out all of a sudden.
I know my staff are going to beless efficient, so that means I
have to pick up the slack inother areas.
That might mean I need to hiresomeone else okay, to be able to
(37:00):
pick up that slack.
To get back to 100% efficiency.
It's fucked, mate.
That's all I'm going to say.
Speaker 1 (37:07):
Like I said, this is a political thing, whereas I
don't think it's actually goingto affect construction costs.
Speaker 2 (37:12):
Superannuation.
Speaker 1 (37:14):
Sorry to cut you off, keep going.
Speaker 2 (37:15):
Superannuation to buy a first home.
Allow access of up to $50,000or 40% of their super to buy
their first home.
I love this.
Speaker 1 (37:25):
Like I said, I already don't like this, and I
just feel like this willincrease house prices rather
than decrease them.
Speaker 2 (37:30):
Yeah, that's okay, increase house prices, that's
fine.
Speaker 1 (37:33):
Okay, this is part of the problem.
Speaker 2 (37:35):
No, no, no, no, people are struggling to save.
Yeah, we've spoken aboutWoolies, we've spoken about
Woolies, we've spoken aboutColes, we've spoken about all
these different parts of theeconomy where it has become more
difficult for the averageindividual to save.
So let's say you've got a piggybank that you're not actually
allowed to touch and that piggybank accrues interest of 12.1%
(37:57):
per item.
That's the average rate ofsuper adulation.
So it does get anywhere between11% to 12%, depending on the
super fund you're with.
Speaker 1 (38:05):
Yeah, yeah, okay.
Speaker 2 (38:09):
So all of a sudden, I'm making $90,000 a year.
$10,000 or $11,000 every singleyear is going towards my
superannuation.
Yeah, in four or five years'time?
Okay, I haven't been able totouch that money, remember, in
four or five years' time I'venow got $50,000 in my
superannuation account.
Hey, there's a property overthere for $500,000.
(38:32):
Oh, I can buy that with mysuperannuation.
I go and buy that property withmy $50,000.
Okay, I tip it to my super, Igrab that 50 grand, I put it
towards that property.
Okay, now I've got a propertythat's going to appreciate in
value.
So by the time I retire, guesswhat's going to happen?
(38:53):
I'm able to retire based on areverse mortgage or based on the
equity or based on the itemsthat are in my property, because
I was able to purchase that at25, 26 years old.
And you highlighted somethingIf you sell the property, you've
got to put the money back intoyour superannuation.
So let's say I do sell thatproperty.
(39:14):
Let's say I make a profit, Istill have to go put that
$50,000 back into mysuperannuation, so I've still
got money left over forretirement.
This is a better way to setpeople up for the future as
opposed to waiting for them toretire to be able to access
$300,000.
Because I've seen superannuationbalances when people get to 70.
They're $300,000 to $350,000.
(39:36):
Do you know what happens whenyou're 70 years old?
You can't get a mortgagebecause mortgages are based on
30-year terms.
So let's say I'll wait until Iretire to access my house
deposit that I'm going to use topurchase a property.
Guess what?
I am not allowed to get amortgage with most banks because
they're going to look at it asan owner-occupied property.
They're going to say what isyour exit strategy?
(39:58):
And if you can't provide asufficient enough exit strategy
when purchasing a property,they're not going to provide you
with a mortgage.
And you're going to have allthis cash but you're going to be
renting for the next seven toeight years with it.
I changed your mind and youdon't want to agree with me.
Speaker 1 (40:13):
No, I'm just thinking because, again, I'm not an
economist, I'm not even thatgreat at maths.
I'm not even that great atmaths.
Yeah, but I just don't really.
It just doesn't feel right tohave to tap into like.
It feels like why are we inthis position in the first place
, where you have to access yourretirement fund?
Speaker 2 (40:34):
Because people can't save anymore.
Speaker 1 (40:36):
I understand, but like, what are the greatest
situations?
How did we get to this point?
And this is my problem witheverything is I don't really
trust the coalition to keepaffordability, like keep things
affordable or whatever.
It's all about growth.
I mean, fucking Peter Dutton'sgot 26 investment properties.
He doesn't want them to go down.
Government under labor, underlabor, under the liberal
(41:03):
government, the house priceshave jumped up astronomically,
which is great for theirelectorates and the people who
vote for them and stuffgenerally speaking.
But I think overall, like we'rein such a point now, like you
said, people can't save becausepart of it is because of housing
and property prices going up sodramatically.
Like I think I've got a stathere what, what?
Speaker 2 (41:20):
was it?
I'm going to let you in on alittle secret Michael Property's
going to keep going up.
Speaker 1 (41:26):
No, I understand that and that has happened worldwide
.
Speaker 2 (41:30):
Whether you're living in the desert, or whether
you're living in Alaska, whereit's freezing cold, or if you're
living in Sydney, australia,property keeps going up in price
and we can either work with itor we can't.
We can't sit as we are becausewe always have a growing
population.
(41:50):
We've got a world population ofeight point something billion
now.
That's going to keep going up.
People are going to keepreproducing and when people keep
reproducing, more housing is isneeded.
The more housing is needed, themore the demand is going to
increase.
So we can't fight that.
But what we can do is providesomething for the everyday
(42:11):
Australian, provide some sort ofsolution for the everyday
person that has $100,000 a yearsalary but they have $120,000
put aside in theirsuperannuation.
You know makes $200,000 a yearor makes $50,000 a year or
$80,000 a year.
This is a solution for firsthome buyers to be able to
(42:32):
purchase something before theage of 30, as opposed to waiting
to the average first home buyerage in Australia, which is 38
years old.
Build up your super, make extracontributions to it, access
that super and guess what?
You'll be able to go buysomething.
You'll be able to combine thatwith the first home super, guess
what?
You'll be able to go buysomething.
You'll be able to combine thatwith the first home super saver
scheme.
You'll be able to combine thatwith the first home guarantee
(42:55):
and you'll be able to get intothe market.
And they said if you're evergoing to sell the property,
you're going to pay thesuperannuation back.
Speaker 1 (43:01):
So if you're purchasing an unoccupied
property, the chances are thatproperty is going to grow more
in value than what yoursuperannuation would anyways yes
, I, but it just feels like sucha short-term thing and the
growth is not sustainable at acertain point because I agree
with you, like, property pricesare always going to go up, but
it's keeping that relative liketo inflation and quality and
(43:23):
things like that.
So, like, like here you go forexample, in the in the 80s, from
86 to 96 under under labor Ithink it was bob hawk at the
time um, house prices went upnine one, nine point one percent
.
Not not too crazy, but once thehoward government came in it
was 121 percent.
(43:44):
Now that is such an exponentiallike.
That is such a huge amount ofgrowth in such a short amount of
time.
And every time that theliberals are elected those
prices do go up, which againthey're accommodating their base
, which makes sense.
So I'm not.
These are people voting withtheir interests, their
homeowners.
They want their property pricesto go up.
Speaker 2 (44:02):
So labor aren't homeowners.
Speaker 1 (44:03):
Well, no, of course they are homeowners and stuff
like that, but the growth is ata more sustainable level, is
what I'm trying to say?
Like it's not about growth, byall means necessary.
Speaker 2 (44:13):
I'm going to disagree with you because Labor's been
in for the last four years.
They increased the shit out ofimmigration and guess what?
Housing markets still boomedlike crazy.
If you wanted to buy anapartment in Coggera back in
2020 or 2019, it was going to beabout $600,000.
Now you're looking at 850 to900K.
Speaker 1 (44:32):
Yeah, but historically speaking it's never
been like that big a drop.
Speaker 2 (44:33):
But you can't use history.
I'm going to explain why youcannot use history.
Because the markets areever-changing.
If you compared Liberal andLabor governments in the 20s to
the 60s, there is a chance thatthe difference is more, you know
, dramatic, because liberalwould have focused more on the
housing increase.
(44:54):
Labor would have focused on,you know, economic, social
housing policies.
Unfortunately, it is adifferent time.
People are a lot smarter.
People now know that propertyis the way to accumulate wealth
in australia, even big businessall across the world.
They are no longer investing intech.
They are investing in stadiums.
They're investing in hotels.
They're investing in apartments.
(45:19):
They're investing in realestate.
Why?
Because tech has had its run.
They realize that thepopulation of the world is
ever-growing, so they realizethat real estate is where it's
at.
We can either work with it orwe can work against it.
Let's continue on the GreensFreezing cap rent increases for
immediate rental relief.
National renters protectauthority and protect their
entry rights.
Phase out tax benefits likenegative gearing for property
investors with more than twoproperties.
(45:39):
Introduce a discount homekeeperrate to deliver cheaper
mortgages.
Create a public I'm sorry, Ican't.
I can't this.
This is all ridiculous.
Create a public propertydeveloper to build 360 000 good
quality public homes for overfive years.
Extreme wealth property tax, anew land tax on high-end
residential properties oh man,okay, have you read the grains
(46:06):
manifesto?
Speaker 1 (46:07):
I've read bits and pieces and most of the time,
especially like when I wasreading about the extreme wealth
property tax, my first thoughtwas good luck, it's communism.
Speaker 2 (46:15):
The Greens try and support an equal landscape for
all and let everybody benefit.
I'm going to be honest with you.
In economics, in our classes,we are taught to be socialists.
Okay, we are taught thateveryone is equal and everyone
should be able to grow andeverybody should be able to
benefit off each other.
And there's a theory of Ubuntu,and Ubuntu is we grow together
(46:39):
to make something happen.
If I am strong, you are strong.
Unfortunately, the real worldis not like that, and let me
highlight why.
Unfortunately, the real worldis not like that, and let me
highlight why.
In 2022, there was a Redditthread that said does anyone
miss lockdowns?
Speaker 1 (46:57):
Okay.
Speaker 2 (46:58):
I saw this Reddit thread and I thought to myself
oh, this is going to be a joke.
I saw people commenting sayingI love lockdown, I'll wake up at
9, 10.
I would log onto my computerand I would get back into bed.
I love lockdown.
I would wake up at 9.10, Iwould log into my computer and I
would get back into bed.
I love lockdown.
The government was giving me$750 a week and I was able to
get drunk at home every singleday.
I love lockdown all thesethings.
(47:20):
Then, on the other side of thecoin, you saw people going
bankrupt people genuinely goingbankrupt.
Why?
Speaker 1 (47:29):
because, all of a sudden, their places of work
weren't as efficient well, yeah,the whole world shut down, like
the supply chains were ruined,so on and so forth if they're a
cafe owner, they still had topay rent because, guess what,
the landlord has a mortgage andthey have to be able to pay
their items off.
Well, that was like with the.
(47:50):
That was the.
I don't think it was JobKeeper.
Was it JobKeeper where business?
Because the business has gotthe payouts for the JobKeeper
right and then that wasdistributed by the employer to
their employees.
Is that was that how thatworked, correct?
Yeah, I'm just highlighting anumber of things okay.
Speaker 2 (48:04):
So you had all of these items and then you had
people celebrating that theywere doing 10 of the work, just
as much pay, they were gettingdrunk at home, they weren't
being as efficient and stuff.
Unfortunately, the greenssupports those individuals.
The greens think to themselvesthat everybody has the best
intentions for everyone aroundthem at heart which is not true
(48:26):
and to create a level playingfield so everybody can rise, and
then punish those that risefaster than the people that have
risen slower.
It's barbaric, because peoplehave ambition and people want to
grow.
And if you are going to punishthose for growing in an ethical
way, for growing in a way whereI have more than two investment
(48:50):
properties, so all of a suddenmy negative gearing should be
taken away, it's arsenite.
I understand where the leadersof the Greens are coming from.
I understand the theory behindit.
However, in the practical worldthis will not work, because
people are selfish, people aregreedy and once you hit a
(49:11):
certain income level, peoplebecome lazy.
They no longer chase the dreamsthat they wanted beforehand.
So once people get to that$120,000 a year salary, they
actually start dropping off abit in their productivity, and
what the government wasproviding was a way for people
to get there with minimal work,and what the Greens are doing is
they support those individuals.
(49:31):
So for adam brant or whoeverthe leader of the greens at the
moment is to come, for him tocome, turn around and say no,
we're going to tax the wealthy,let's tax the rich and give it
to the poor.
I'm going to highlight something.
If you took all the wealth inthe world and you distributed it
equally amongst everyone, thereis a theory that within 12
(49:53):
months time, the curve would beexactly the same.
All the people that accumulatedwealth previously would become
more wealthy.
All the people that didn'taccumulate wealth will become
less wealthy.
And what the Greens areconstantly trying to do is
punish those that have becomewealthy through property,
through strategic investment,through risk-taking and making
those developments, and they'retrying to reward individuals out
(50:15):
there who want to sit at home.
So anything that the Greenshave said I'm throwing out.
Anyways, that was our episodeon politics.
I think we went for 50 minutes,yeah.
Speaker 1 (50:27):
I'm sweating.
It's hot under these lights.
We have to turn the aircon on.
Speaker 2 (50:33):
I'm not going to do.
I'm not going to do anyshameless plugs.
I'm not going to do anythinglike that.
All I'm going to highlight isI've been Joe, that's been
Michael, and we'll see you onthe next episode.
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