Real Estate Market Wrap 🗞️ The Market is Like a Leaking Hot Air Balloon

The market is like a hot air balloon with a small hole in it, and the air is slowly leaking out. It’s being fuelled by:

- Interest rates rising
- Capital gains tax talk
- Negative gearing uncertainty
- Inflation numbers

Overall, this is causing buyers to drop off.

Transcript

Supply Shortfall And Government Critique

Tom Panos 0:00

Supply, supply, supply. Stop deflecting. You're 60,000 houses short every year on your target. Why don't you finish that job instead of trying to come up with other solutions? Because right at the moment, let me tell you, the Australian government looks like a group of bandits hanging around an ATM machine trying to steal money. That's what it looks

Market Mood Shifts To Buyers

Tom Panos 0:27

like. As far as I'm concerned, I think the real estate party in Sydney anyway is over. And the reason I say it is that I'm noticing it's getting harder. I'm noticing the mood is changing. I'm noticing sentiment is moving from the seller to the buyer. We are officially moving, I believe, into a buyer's market. And the reason I say that is because I look at last week's results, I look at this week's results, and then in addition to that, I am having a look at properties that have been sold prior, and that is a leading indicator that there's only one buyer. And that's why the agent's wrapping it up. And I'm also having a look at the number of cancellations, and they are also going up. I've been touring the country speaking to real estate agents from all over Australia, and they're all saying the same thing to me.

Leading Indicators: Pre-Sales And Cancellations

Tom Panos 1:24

The best way to describe it at the moment, it's like there's a hot air balloon up there. So the market still appears to be okay, but there's a little hole in that balloon, and the air is coming out, and it's being fueled by number one, interest rates going up. Number two, noise on capital gains tax, and noise yesterday of negative gearing. In addition to that, inflation numbers still don't look good. So there's no sign at all that, hey, uh rates are

Headwinds: Rates, Tax Noise, Inflation

Tom Panos 2:04

going to come down. And I think overall, people are getting cagey and buyers are dropping off. So you've seen how vocal I've been in recent weeks about this issue of capital gains, because it sucks that you've got the big banks, the big four banks, the Business Council of Australia and the government teaming up together, protecting the big corporates, knowing that if you want to actually get a big cash grab, you don't go hit mums and dads, you go off and hit the super big corporates. But you know what they're doing? Listen to what the banks said yesterday. Yeah, we think they should actually look at affecting the capital gains tax. There's only one reason they're saying that. What they're saying is, hey, there's a crocodile coming. Let's push the crocodile

Banks, Corporates And The CGT Push

Tom Panos 2:50

to eat them, not us. They don't want shares impacted because that matters to them a lot more than property. So I'm letting you know on Monday night I'll be interviewing Ben Kingsley, who's very heavily involved in this. He runs a podcast of Property Couch, but he's involved and has been involved in negative gearing meetings and capital gains meetings with various industry bodies. So that's going to be six o'clock on Instagram. You should watch that. Um I'm

Preview: Ben Kingsley Interview

Tom Panos 3:18

also very, very concerned about grandfathering. Because I'm convinced, like if they want to actually get money, if they want to get money, they're not going to get money unless they go off and hit people that have already made the big capital gains

Grandfathering Fears And Policy Risks

Tom Panos 3:32

prior to the May 7th budget. So that's why I'm really paranoid about what the Labour government is thinking about grandfathering. Because grandfathering, for those that don't understand, it means that anything you've got is carved out and is not affected by the new laws. But I actually think that there is a strong possibility that they might not grandfather it because if they want to actually collect a lot of money, they need to have people that have already made big gains, not starting from now. Um and that is what concerns me. It concerns me a lot. And it also concerns me a lot when I hear that there has been a number of politicians that have been offloading investment properties. But I've got to get more detail into that to see whether it actually is a sign that they're aware of what they're doing long time ago.

Tiered CGT Idea And Protecting Hold Investors

Tom Panos 4:30

But I have to say to you, I believe that there is a solution that we need to look at because if they are going to do it, if they are going to do it, which it looks like it's a done, dumb thing, I think what they should be looking at is what Ben is going to talk about on Monday night, and that is, hey, if you hold the property for five years or more, don't penalize those people. Penalize the short-term people, the short-term flippers, the ones that come in, fix it up. And let's be clear, if you do it within 12 months, you actually get no discount. You're actually paying the full tax. But what I'm saying, and what Ben is saying, is maybe what we should look at is year two, year three, year four, year five, where maybe you go, you know, it's 50% at year five, it's 40% at year four, thirty percent at year three,

Unintended Consequences For Rents

Tom Panos 5:28

something like that. But to actually not change things for the mums and dads, the nurses, the personal trainers, the hairdressers that buy investment properties, one or two to secure their financial future because they feel safer with bricks and mortar than actually crypto or shares. And you know what else sucks? Why are they just doing property? Why aren't they doing shares? Why aren't they doing the big money? Right? Because they're disguising it. They're disguising it as, hey, oh, we're trying to get property prices to come down. But you've done no modeling to suggest that that's gonna happen. And I've just said to you, there's the unintended consequence of you're gonna get increased rent. Like you don't have to be Einstein to know. Right? The minute you tax something, you get less of it. And if you're gonna start taxing investment properties, you're gonna get less investment properties. And if you get less investment properties, you get less properties for tenants to actually move into. So what actually happens is they've got to fight against other tenants on the remaining properties.

April Disruptions And Community Respect

Tom Panos 6:37

Thank you, Darren. But I'm just saying the truth. Anyway, so that's where it is. That's what I think they should be doing. And apart from that, I've got to tell you, I think Easter is a really tricky month. Easter is a r April is a very tricky month because I think that month we've got, what have we got? We got um school holidays, Anzac Day, Easters from various cultures. So I don't think it's gonna be a great month. And I wish want to wish everyone, I want to wish everyone that is celebrating Mardi Gras to celebrate it. And you know, I I always I sometimes sometimes when I I remember saying it last year, I said, happy Mardi Gras to those that celebrate it. And I had, you know, a person, you know, go off on a long tangent, you know, message after message on Instagram saying, oh, you know, on the one hand, you say that you're a Christian, and on the other hand, you're wishing people a happy Mardi Gras. Well, let me tell you, I am a Christian. I am a Christian, make no mistake. But I'm gonna say to you, I believe my faith and my scripture, and I believe in my conviction, but I also believe in people. I also believe in people. And in addition to that, I'm gonna let you know. Sorry. In addition to that, I'm gonna let you know that I've had people in the gay community

Closing Rally: Build Supply, Stop Deflecting

Tom Panos 8:16

that have been my Timo nurses for years. I've lived in areas that have been very heavily gay. And I've got to say to you, I understand the suffering and the pain that minority groups there, I'm not there to judge. You don't have to abandon your faith for understanding. I want to make that very clear. And I've got to say to you, if you're someone of faith, no matter what faith it is, and you're navigating through the space on Mardi Gras Day, maybe it's deeper empathy and not loud opinions that are needed. People are people. Anyway, I might even actually go down. My daughter's going down, I might go down with her and watch it. Having been there for a decade. Ladies and gentlemen, on that note, I'm gonna finish off and I'm gonna say it till Albo acknowledges it. Supply, supply, supply. Stop deflecting. You're 60,000 houses short every year on your target. Why don't you finish that job instead of trying to come up with other solutions? Because right at the moment, let me tell you, the Australian government looks like a group of bandits hanging around an ATN machine trying to steal money. That's what it looks like.