They Predicted WRONG! 🗞️ Real Estate Market Wrap

0:31 – Today’s reality: low clearance rates (3/8 result)
0:49 – Forecasts got it wrong… here’s why
2:47 – Tax changes incoming? What’s likely
3:29 – Capital gains tax: indexation explained
4:07 – Why negative gearing changes WILL impact demand
5:20 – The rental squeeze
5:59 – “Grandfathering” – who’s protected?

Transcript

Negotiating While Everyone Is Present

SPEAKER_00 0:00

So right now, if you pass a property in, right, and you go inside, the buyer turns around and says, Well, I'm the only one here now, right? And they take control of the negotiation, right? That's why in a market like we have now, if you're going to negotiate, you negotiate during the auction, not necessarily after the auction, because after the auction, everyone leaves. You've got the buyer there, you've got the vendor there, and guess what? It is a buyer's market, right? It is a buyer's market. Time for an electrolyte. You're absolutely right, Nick. Anyway, so I've got to tell you today's numbers. Let's go quickly go through them. It was three sold out of eight. And um one of those got sold prior. It's all hard. I mean, this was a decent result because homes like this don't come up on the market much. But I have to say to you, wow, the forecasters at the start of this year, or at the end of last year, everyone was talking plus plus plus. And you know what? There you go. Good to see you, Jimmy. Listen, and I'm not saying forecasters are not intelligent people, but let me tell you, real estate forecasting is not too dissimilar to forecasting at Crown Casino. Every forecaster thought in December that we were going to be having a marketplace in 2026 that was going to go gangbusters. Go, you can Google the reports, Google the name of the various, you know, proper analysts. They're not to blame, right? They don't have um Donald Trump's brain, so they can't control what's going on with the war. We've got double inflation, because we already had inflation before the inflation with the petrol, right? Then we've got next two weeks, we've got the greatest marketing campaign in the history of the world between Albo and Chalmers, who are gonna tell every person there that life is gonna get better for people that don't own real estate. We're gonna create social cohesion, we're gonna create uh generational equality, all that sort of stuff. Okay, so that's all gonna be, you know, negative stuff for property, and I think we've got to come to the acceptance that we've we're facing headwinds, right? And I also understand there are certain marketplaces, not those in Sydney or Melbourne, some in around around the rest of the country, and only those that are in the lower price point that seem not to have the headwinds that other marketplaces have, right? So, but I've got good news for you because I've got to say, right now, the latest intelligence that we have, because every day we get another press conference from Chalbo, uh Albo or Charmers and that, and now what's becoming clear is that um most likely in two weeks' time we're gonna have new laws with real estate and taxes, and most likely there is going to be a return of the indexation system that we had pre-1999. And I have to say to you, I've spent a lot of time with a calculator and a pen in the last week, it's not a bad thing. I'm gonna say to you, it's not a bad thing. If you're someone that holds property long term, the indexation method, which takes your purchase price up by CPI each year, at the end of 12 years, if you've got a property that you bought 12 years ago for 1 million and you know there's a CPI of around a cup, 2.5% roughly, it's probably going to be worth one, 350 based on the indexation, which means that you only pay capital gains tax of$150,000 in profit. So I have to tell you, I am feeling totally okay about going from the 50% discount on capital gains to the indexation method. The negative gearing is another story. The negative gearing will have an impact to real estate because a lot of the investors rely on negative gearing for their cash flow, which allows them to buy investment properties. And there is a strong possibility now that they're also saying that you might not be not only just negative two properties, they they're talking about maybe not negative gearing any properties if it's an existing property, and that negative gearing benefits should only come to new properties. I can see the logic behind that because if you create demand on new properties and buyers want those because they get taxation benefits, that's gonna force developers and builders to put the product out there, and all of a sudden you've got an increase in supply. So I do see the positives in that, right? I do see the positives in that. I still have a very, very strong view that rents are going to go up significantly with those changes. You tax an investment property, you lose that investment property, tenants have to fight for other properties, and by the time these new developments go through, we're talking years, so you're not gonna get that benefit. But the other side of it is I've got to tell you the good news is the language that Charmers is using is that it's highly unlikely that they're not gonna grandfather. And what does that mean? That you'll be safe if you already own it, you will not get impacted by the new laws, right? Other things that I want to talk to you about is um listen, I've got a headache because this auction was an hour and I got dehydrated, right? Um, and on that on that basis, I'm gonna let you know. I'm I'm gonna finish up. I want to remind all the real estate people here. We have the ARIC Real Estate Conference. Real estate gym members, you're gonna go see other thousands of other real estate gym members at the conference. So go and see your brothers and sisters and see some of the greatest speakers around Australia and the world. It's only three weeks away, and I want to let you know if you're a real estate gym member, you know, use that uh code, you get that special price if you're a real estate gym member. But apart from that, let me tell you, ladies and gentlemen, I put a video out yesterday about a deceased estate and siblings and family fighting. Well, let me tell you Did I have a classic today? But I can't talk about it because I think one of the people on there follows me.