David Easterbrook on What Melbourne's Bayside Buyers Get Wrong

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Welcome to Street Secrets. I'm Chris Bates. Super happy to be doing another episode on Melbourne. Got David Easterbrook in the house today. How are you doing? Good, Chris. Dave, we've known each other for a long time.

You've been guests on other pods that we've got, and yourself and Kim have been running a great buyers agency in Melbourne for a long time. We've referred many clients to you over the years. Appreciate you coming on today.

But people who don't know you, can you give us a bit of an understanding of when you became a buyer's agent, what you were doing before, what made you make the switch? And I guess just sort of talking through your learning since you've begun.

I started my life out in finance, like yourself, Chris, to a degree. But I worked for the banks. I worked for ANZ, Suncorp, Macquarie Bank. And then I did a bit of a switch and I went to the aggregators. So I worked with other aggregators like AFG and Plan.

And I met my wife, who at that stage was an accountant. And strange story is that she had a tarot reading when she was very young that said, one day you get into property. Well, believe it or not, it became true. But it was a process to get there.

So she started the company up back in 2009, 2010. As a husband working full time in banks and so forth, I had to work all weird and wacky hours to help her out to a point where it got to, it made no sense for me working for somebody else.

So I made the switch over in 2010, 2011.

And it's gone from strength to strength from then and lots of journeys up and down in the meantime, but started out in finance, which really was a fantastic, I guess, grounding to this industry.

I do like to ask that question because I do feel it's interesting just to understand the mindset before you sort of come in. What about Kim? What was she doing before you sort of started as well?

She worked for a large, large builder in their accounting firm, even though she won't like me saying this, but everyone called her the ice princess because you never got anything wrong. So numbers is sort of, I guess, in her DNA is probably the right way to put it.

However, it's strange how people change though, because property is not just about numbers. I know people talk about numbers all the time. That's the easy thing to talk about. It's actually about people. And even though she's an accountant, She's definitely the most personable accountant you would have ever met because it is people-based.

So that was her background.

It sounds like you both come from the numbers side. And I think a lot of people look at the property market as numbers, right? And often they're following yield or they're following what things looks great on a spreadsheet and they extrapolate it out. But you're right.

I think it's absolutely much more around people, right? People are driving prices. Is that what you mean by that comment? It's the human behavior that is driving the market more. Is that how you think about it?

The number side is so easy and it's history, it's past. And if our future was exactly the same as what our history has been, well, there's no such thing as speculation, it's known, right? And if you go back into numbers and you're just number, number, number driven,

Well, if that was the case, you can see the future. And that's not the case. We have cycles and these cycles aren't these beautiful five year or seven year and every single year it does the same.

It doesn't work that way because people's behaviour and society and our economics and political environment changes and changes everything. I mean, I'll give you an example about numbers.

Well, I didn't see anyone predicting the numbers to say, well, Perth's going to have 17 years of flat market and then all of a sudden it's going to boom from 2021 onwards. You know, I didn't see the COVID coming. That wasn't in the numbers.

You also don't see the fact that affordability is a big factor in all of these prices. Like, you know, 20 years ago when the average house was $400,000,

your income compared to what the purchase price was, was a very different kettle of fish. I mean, you could borrow and you could be still only spending 20% of your income on a property, whether you bought it for 400 or 500. But that's not the case anymore. And we don't have income growth.

You know, we do not have this base income growth that says we can continue. So you have these shifts in society and we have these shifts in regards to, I guess, you know, what people are willing to put onto these properties.

And now we have these new generations coming through who have a different belief system. It's not the same as a Gen X like myself, but you've got to take all that into consideration. And when you're looking at just numbers and numbers only, and just thinking that the history is going to repeat itself.

It's not saying you should ignore it. I'm not saying ignore it. There is something there where it might confirm a belief, as an example, or it might help out a belief. But it's certainly not the be all and end all.

And it absolutely is not some sort of rock solid guarantee that if you look at the past, you're going to tell what the future is. But that's my personal opinion.

You made some great points there. I always get very frustrated with the whole property clock sort of BS and they're all going around at the same rate. It's going to double. And I think you're absolutely right. It's a good property to perform well over the long term. Well, yeah, I mean, not really.

How does that property fit into the future? And you've got to really understand all those things you speak about, right? The demographics, the changes in buyer behavior. What are we going to want in the future? How is the city going to evolve? It's so much more than just those numbers.

But we're going to talk about the Melbourne Bayside sort of today. And it's a very interesting pocket. How do you sort of and are you guys a specialist in that area? How do you sort of think about your buying pocket and the number of different markets, I guess, within it?

Good question. Well, firstly, if you go back in time, without spending too much time on it, but if you go back in time, I mean, everybody came to Melbourne and wanted to live in the eastern suburbs and that was 30 years ago.

Bayside really started to kick off a long time ago, but effectively it's a different demographic and it's the demographics which is the biggest change or the biggest difference in Bayside. And I think within that demographics, it's very different to eastern suburbs as an example.

And as a result of that, you've got different asset types. So a lot of the core differences aren't that different. Like everybody wants houses. but you've got to be able to afford them. And if your location is so important that you can't afford a house, that's when these other asset types come in.

But again, as we mentioned before, there's all these other decisions such as, well, capital growth, et cetera, et cetera. But you can have all those points and belief systems you like, but if you can't afford it, you can't afford it. It finishes there.

But I guess the Bayside area really is, there's a lot of nice people. It's still an area you can go for a walk and people say hello in the street. And I think it's also a lot of people that want to live in an area like them. And again, this is about demographics.

You know, there's a lot of that. But Bayside really is defined as Nepean Highway and Beachside and Nean Highway. But it sort of filters to some of the other sides of Nepean Highway as well. I mean, Brighton East goes over the highway.

Bentley, you know, is Bentley a southeastern suburb or a Bayside suburb? Well, technically it's not a Bayside suburb, but you'll find that the biopools are the same. Brightonese, Bentley, they're all sort of in that same demographic or in the same sort of rough area.

And it really comes down to budget and price and what they really want for that asset type. But there's lots of different asset types. Everybody wants house, but there's townhouses everywhere. There's new townhouses, there's old townhouses. And we have one other asset type, which is very relevant in the Eastern suburbs, a villa.

We've got lots of villas. And we've seen the young people who can't afford the houses moving to these villas. And their history has been really interesting where they've sort of, you know, shot up, then gone flat, then shot up because they're like a little house. They really are.

They're like a single front where you've still got backyards and front yards and living rooms and connections to the outside. And so they're an interesting story. You'll be interested to see what happens with them moving forward because they're on small blocks as well. So there's a lot of them in Bayside.

And then, of course, there's apartments. And apartments in Bayside are... horrendous. And when I say apartments, I'm ignoring the three to five million dollar downsize. Sky homes. I don't even think they should be called apartments.

Normal everyday two bedroom, one bedroom apartments in Bayside. I mean, We've got a government that's just come out and made effectively all Bayside a residential growth zone to encourage apartment construction, but in areas where they're not even an in-demand asset.

I mean, if they had the more multi-million dollar downsize apartments, maybe, but developers can't make any money out of that. So it'll be interesting to see what happens in that space. I don't even think it's going to get flooded because you've got to be able to sell something to build it.

I think it's just recently, last week, some changes in Victoria around sort of zoning and sort of watch this space in 2026 and Sydney's going through probably the first time a massive shift in the way that they're approaching development in affluent suburbs. I mean, the Bayside area, it's an interesting one, right?

It sounds like in the past, a lot of people would navigate or gravitate to the Camberwells and the Hawthorns and the Kews. And just due to the private schooling often was just such an established old welfare and the bigger sort of green blocks. The Bayside, it's quite unique, right?

You obviously got much closer to access to water and even access to the city is pretty good. Have you noticed that a lot of people are going, I prefer the Bayside because of those access to water and they've still got good schools for the kids.

I'm happy to give up a bit of room in land, but I get access to water more.

Well, I mean, you're not really giving up anything. I would probably argue it's better on all those fronts. I mean, at the end of the day, yes, we don't have 2000 square meter blocks in Toorak, but most people don't have $40 million, $80 million to buy a property either.

You know, so the average person down here is spending somewhere between, say, $3 to $5 million. That'd be probably the normal. And $3 to $5 million...

You've got, A, even though you Sydneysiders think it's very funny when I say we have good beaches, but there is really nice beaches down Hagen, Black Rock and Sandringham and they're nice. And in summer, we actually have nice weather. So you can use it.

Our water may not be 26 degrees, but it may be still only 20, but it's still okay. But we also have fantastic train lines. Like the Sandringham train line is known as the number one train line. You know, it has the least amount of people on it.

It gets the city really, really quickly. So you've got shops, you've got water. And we've got city within an easy distance. And you'll find that a lot of people will still prefer to get a train into the city if they work in the city.

But even that concept of the city has changed dramatically. Melbourne, unlike Sydney, is not just CBD-centric in regards to work. If you get onto a map and have a look at a map of Melbourne via satellite view, you'll see all these white roofs everywhere. And that's industrial.

We have a huge percentage of our economy. 33% comes from our construction industry. And there's reports that it's close to 15 to 20% coming from our

effectively those warehouses that you see, our industrial area. And we have areas that are pitted all around Melbourne where people are working in high paid jobs, by the way, or they own the businesses, but they're not going into the CBD.

They're going into places like Moorabbin, Dandenong, Campbellfield, you know, so it's a bit of a different economy.

I mean, just on that point with the Bayside, have you also found that everyone wanted to be in a certain part of the Bayside and over the years they've started going a bit further south and a bit further exploring down, not just the Sandringham train line, that other sort of the Frankston train line, which was

maybe before, not where people wanted to go, but it's becoming more and more desirable, let alone access to water.

I mean, the sunsets down there, you've still got great train links and even getting out of the city on weekends, just very easy to get down to Mornington Peninsula when you're on sort of that Nippian Highway.

It's been an interesting journey. I'd probably say that process you're talking about happened back in 2017.

And effectively, if you look at the prices in places like Bow Morris, Mentone, Blackrock, they're just as expensive. So it's not like you can sort of go to the next suburb and all of a sudden you're taking $300,000 off the price.

You know, it's Hampton to Bow Morris, you know, you might be talking a few hundred thousand dollars, but they may be different assets, maybe a bit bigger. So you're not gaining much by pricing price-wise by going down there, even though they're cheaper.

So I'm not saying they're not cheaper, but they're not significantly cheaper. You're not taking a million dollars off as an example. And then you come to this natural boundary and that natural boundary being more dialic. And from Mordialloc, if you go for a drive, it looks completely different.

Mordialloc, Aspinall, Edith Vale, Chelsea, they look completely different. They're not Bayside. They're out of Bayside. Don't look the same. They're not same housing. Hasn't gentrified anywhere near as much. And that big pricing push came in 2016, 17, 18, maybe 19.

And then it's been sort of flat, you know, so it's one of those things where people go, well, from now paying $2 million, 1.6, 1.7, 1.8 in Edithvale, Aspendale. And this is not everybody. And this is where some people take my words out of context.

It's not everybody, but there's a lot of people who go, well, if I can spend 1.8, I might as well spend 2.2 and be Bo Morris BlackRock. So that sort of holds it back.

Or the other alternative, if you or I were there with our family and I've got two young little kids, do I want to go to Edithville, Aspendale? And let's say, for instance, I worked in the city or do I go to Bentley? Yes, it's not Bayside, but it's just over the road.

It's the same sort of price. It's much closer. I can get an express train. Yes, Frankston line, but it's still fine. And I'm in the city in 18 minutes. So it's not just down. I would probably say there's more out that's really happening before it goes down.

Yeah, it's interesting you say, right? So I think these are one of the things that great buyers agents do is basically help clients not get pigeonholed in a certain pocket and really good at understanding value in different pockets and alternatives. And I think that's where you can create more opportunity for yourself.

So you're not looking for a needle in the haystack. be, you can actually open up a different lifestyle you haven't considered, which you might actually love.

If you think about that sort of pocket, you mentioned there that Mordialloc shift, which is a natural barrier, obviously got a natural barrier with the ocean or the bay. You just can't build any more houses here. And obviously you're talking about zoning there as well.

And obviously high density apartments has basically been wasting land in some sense, and it'll continue to waste land. So there's a real limit on supply, particularly when you take off like the Nepean Highway as well. Basically, no one wants to live anywhere around that as well.

So what are some of the danger zones? You mentioned that sort of understanding the difference in the more dialect there.

What's some other things, obviously in higher density apartments, but other things where people come into the Bayside and then they kind of make some mistakes that they go, oh, if only I bought this different type of asset here, I would have been much happier and had something that sold much better.

Well, recently, so we'll talk now, I'd probably say it's the unrenovated houses is the big issue because then people go, well, I'll renovate. And in 2019, I'd sit there and go, good idea.

But today, by the time you've bought the house for X price and then you renovate, it would have been cheaper just to buy a renovated house. And it's not just the cost of what they think is the cost when they firstly do numbers.

is by the time you open up those boards and then all of a sudden you've got to do the subfloor and then all of a sudden you see there's a little bit of rising damp in one corner.

And I mean, I don't know if you've been to a nursery recently, but you can almost go overseas for the price of maybe a few plants. The cost of plants has just gone through the roof, but it's the cost of doing anything. And then what most people do is they don't do it.

And if they do do it, they don't do it properly. And there's sometimes these properties that have been unrenovated. And I'm not saying don't buy them. I'm just saying it depends on what type of personnel you are.

If you're doing it yourself, it's going to be a very different cost than if you don't know the difference between a Phillips head and a screwdriver. You're going to have a problem. Because the cost now has got to a point where it's not about money.

It's about, well, is that really the right value? Like, do you change over what you're looking for? Because you're going to live in an unrenovated property probably for the next five years. And then you may then go stuff and I'm going to sell it.

And I think this whole unrenovated property, when really it's a family with two kids, they're young kids and you're living in a house where there's no dishwasher and it's 1960s kitchen, you might be in a great location and go, I'm in a great location, but you live in the house.

don't live on the street you know you don't walk out the front and go i love this street when you're going inside a house and it's you're not happy you're not content and you just want change all the time you know it's not a lifestyle where you you're really happy about and so i think that's sometimes getting into be a bit of a real problem and people's expectations and what they can and can't do i also think the other issue you're finding is going to townhouses versus houses

Now, if you're buying and you're going capital growth, the most important thing, I want to make money out of a property, et cetera, et cetera, et cetera. Well, if you can afford it, go to a house. Absolutely. But if you can't afford it and you're an owner occupier, there are some nice townhouses.

Now, are you going to make the same amount of money? No, I do not believe you will, and I never do. That's just my personal belief system.

But if you're an owner-occupier and you want to be in a location and you've got a nice property, it can be a great option, but not if you're thinking, okay, no, one of my big drivers is that I need to make money out of this property, which I agree with this belief system, if it's also a stepping stone.

You go, okay, well, I'm 30 years old and I want to be living in a X amount of house when I'm older. Well, then that would be the worst advice in the universe because you're so far behind the eight ball.

But what if you're 45 or 50 and you go, I'm quite happy with this? Well, then that's an owner-occupier choice. It could be a good choice to be in that area as opposed to buying an old house, spending more than what you needed to. And so that's changed.

You know, I wouldn't have had that conversation. I wouldn't have said those words, you know, six, seven years ago.

I think it's a really good point. You've redirected it from Bayside, but I think this is a national sort of challenge. It's absolutely the case in Sydney, the other parts of Melbourne as well. And when the cost of renovation and the risk of costs also blowing out and

and the ability to actually finance it. And do you want to finance it at that new cost? And can you afford to do it? Have you got the buffers to do it?

There is a bit of a belief and overconfidence in the past of I'll just buy it and renovate it and flip it. And I think in the current world, it's really easy to overcapitalize or get stuck in a property where you're a bit of a prisoner.

You've got the mortgage, you've got all the stress of a mortgage, and you've got to keep working to keep paying the mortgage. But you're in a house, like you say, when you come home,

that you really need to renovate and it can cause a massive divide in families and you basically bought the wrong house. It's probably a great investment. You've still got good land, but you just haven't got something that actually suits the life stage you're at.

And people can burn a lot of time and you've got so much cost to buy. In Melbourne, they love to charge stamp duty at the highest rate. the cost to sell and then you have to get out.

The townhousing is an interesting one because you made a point at the start and you said there's townhouses and there's townhouses. And how do you think about that, though, when you're navigating someone to look at this world? Because there is a huge variance in the quality of them, right?

And you've got to be a little bit easier to assess the quality of the house, I would say. But you've got to be extremely careful when you're moving to townhouses, I guess.

Well, I mean, I think this is also the difference between good buyer advocates and bad buyer advocates. I mean, we are in the industry of property. And so how can you be an industry expert if you don't understand property? That's number one.

So in regards to what is a good property, what is a bad property? Yes, there's floor plan and there's fit outs and those things, but there's also construction. The main thing of what you're buying is construction. And it's not that difficult to work out.

But my point about townhouses is we hardly buy townhouses. And my point is about, I think that's where it's moving forward. And I think it is a matter of where people will start changing moving forward. Historically, we're going to try and get people into, I'd probably prefer someone buy a smaller house.

if that makes sense, like a 500 square meter site as opposed to 700, but with a house they could live in for longer.

So the townhouses are moving forward, but on the quality of townhouses, this is half the issue because you have mum and dad, John and Ginny, who believe that they're, or maybe a developer,

who is not that experienced, who are buying a block of land or they've got their own block of land that they bought in 1983 for $43,000. And then they go to a builder and they put two townhouses side by side. And of course, they just look at those numbers.

But of course, these townhouses are veneer, they're blue board on the top. And even in Bayside, you can still get that because it's all the pretty fixtures and fittings that buyers look at predominantly.

And that veneers that you're looking at, and I'll give an example, West Facey blue board veneer might have a nice little pretty render on it, might have a nice little timber board.

That on the second level of a property with West Facey hitting West all day long in the summer means it's an absolute cook box and it's boiling hot. And in winter, it's just freezing cold.

And you can tell what the difference is when you're looking at windows and you're looking how thick those windows are. But it's not just the window glass. It's the sealant around the window, around the window frames.

When you're looking at the roof of the property and what sort of insulation is in those, you can find out. We have building inspectors that we work for for 16 years. I know what they look for. And like when we put through an instructions to an inspector,

We don't have to put in there what's in the roof because we want to know that because that adds to that livability of it. The problem with townhouses, there's so many of these cheap box townhouses, which by the way, they might be cheap in regards to construction.

They're not cheap to buy and they're not cheap to build now because the expensive ones are now so expensive you might as well buy a house. And if you also consider the most important fact, townhouses are not going up in value, generally speaking. The agents can't sell them.

The agents, if you look online and just look at data without opinion, they take longer to sell. If you speak to any agents in Bayside, they might run with one buyer. One buyer. Now, they're not going to tell the buyer that, but they're running with one buyer. Maybe two if they're lucky, right?

So the demand's not there clearly. That's evident. And then if you then look at, well, okay, with these particular townhouses and the quality of those townhouses, how long? Are people buying it because they say, one day I want to live in a townhouse? They're not. It's almost like, well, it will do.

And real good quality townhouses, as I said before, are too expensive where people go, well, might as well buy a house in a different location. So we're in this moving target, which I don't know if there's an outcome. I don't think there will be a happy ending to it, in my opinion.

Yeah, I think you've just highlighted that you obviously got your houses, you've got the tick the box of whatever one wants, right? The aspect and the road and the street line and the street face and the neighbors, et cetera.

But I do think when people buyers are trying to navigate because budget's constrained, they are looking at townhouses or looking at villas, or they're maybe even moving down to the apartment. And I think this is where

The future buyers have got to be really careful because they just didn't have to focus on buying a house before and knew that that would just do their heavy lifting.

You've got to sort of, as the market evolves, really try to play because I do think there's people that are winning that market and the people that finally they've lived in a new townhouse. Yeah, that might have been a nice one to live in or not, but

When they go to sell it, potentially the buy pool is just not as strong as other assets. So obviously the Bayside and Melbourne, I don't like to talk about two evergreen topical things, but I think the Melbourne market is the best place in the world to live. Melbourne had that pre COVID, right?

The summers are amazing. Australian Open Grand Prix. It was all there, right? And then COVID's hit, Mojo's got sucked out of Melbourne and Melbourne's never going to come back is the story, right? But is it really just like a fire in your mind that everyone's just sat on their hands?

Affordability from a metric point of view has got much better in Melbourne and people just haven't felt the need or the desire to upgrade because they've just been, I guess, still a bit down in the doldrums, a bit under the COVID sort of weather and they haven't felt this FOMO if they don't upgrade now.

then they'll miss out. So the market's been frozen a bit in terms of prices or where are you seeing it in the journey of it?

I think it's a series of things that happened. Firstly, our government down here, not to get into a political conversation, certainly hasn't helped the process out. But it's not just that. It's also the fact that Perth and Brisbane started the boom.

Investors in Melbourne have got equity, like we see now in Perth and Brisbane. And now we see these investors in Perth and Brisbane buying in Melbourne and Sydney, which never happened before.

So we get WA investors now almost on every second day, which I can tell you 10 years ago, I probably would talk to one. And so you had a number of things happen. Those markets boomed. So what did the Melbourne investors do?

Melbourne investors sold up their Melbourne property and they bought in Brisbane and Perth. It's actually a very, very good choice when you think about it. Congratulations to them. But of course, it took that stock away. When it takes that stock away, we're taking away demand.

When we take away demand, we don't have as much pressure on prices. And it doesn't take a huge percentage to be whatever you want to consider to be a balanced market. I'd call that 70% to 80% clearance rates, et cetera, et cetera. And we've sort of been just balanced.

And balance doesn't make very good headlines. It's not good clickbait. Balanced. Boring. no one's going to click on it to read that article. And so then in addition to that, you also then have course, yes, we increased our land tax.

And if you think about how much the land tax was, you know, it's called $1,000, not exact, but it's called $1,000. Does that really make someone go and sell an investment property?

Well, they may say that's the reason why they're selling the investment property, but most people wouldn't sell an investment property because there's an extra $1,000 expense or even $2,000 expense or whatever it may be. It's usually because there's better options somewhere else, which there has been. No questions about it.

And then in addition to that, you then start to get a culture, a feeling where people go, well, you know, is it going to happen? And I listen to the media, I listen to everything else. And if you're buying here for investment, it's different. But if you're an owner-occupier and you live here,

Well, you are able to transact without, you know, of course, having to pay too much more for your new property. But I'd probably say in regards to have things improved, absolutely not. Our prices haven't gone backwards. I don't know too many areas where it's gone backwards. It's just either stay flat.

But we're buying properties today at the same price as 2021, which is the peak.

If you go to places like Yarraville, as an example, very much 2021, now pretty much the same prices. If you go to Bayside, 2021 to now, prices are definitely up. You put in their four bedroom family home, you're paying more, but not a lot more. And I believe that everything goes in cycles.

And once everyone else has their little run, and this run happens over in Adelaide, this run happens over in Brisbane, and the cycles just sort of will eventually happen. When? Don't know. Don't have a crystal ball. but I think people still need homes to live in.

The investors will come and go, but let's say they account for 30% of the market.

Yeah, it's interesting, right? I think you've made a good point. Flooded the market with apartments. A lot of investors got burnt there, I guess, in Melbourne. You're right, they're not selling because of the land tax. They're selling just because they've been poor performing investments.

They finally decided to bail on that because they've got mortgages, let's say in Sydney or whatever it might be, and they could finally get out. And you know what? Even the people in Melbourne are like, oh, I don't think this is working for me.

I've got equity, I'll go and buy a house in Brisbane or Perth or whatever it is. And so, yeah, you get a lot more listings, a lot more sort of negative. But I think you're right. The owner-occupied market, though, obviously that drives the big booms, right, particularly in house prices.

Do you think it's just the fear of where the height in 21, then obviously rates went up through the roof, affordability obviously gets stretched and borrowing capacity gets stretched. A lot of other cities have still kicked on, but Melbourne was going from a higher base, right?

Like Sydney, it's a similar story in some sense. But do you think it's just waiting for though? There hasn't been this fear that if they don't upgrade now, then they won't be able to

sort of do it like it's just really needs that almost FOMO to kick in and then be like, oh, actually, you know, we are going to have to do an upgrade. We're better off doing it now versus in 2030 or something.

I think they'd do it anyway if it's an owner occupied home. I just think that cycles are natural and normal. And I just think we're just going through a cycle. But we do have an issue with our government. So not a political conversation.

It's an environment where I personally think that that's affecting things 100%. And I do believe that you have to understand these political environments to be realistic and go, well, why is that making a difference? Because it gives confidence. But the other part to this, even more than political, is interest rates.

Like you can buy a property in a different state, which might be one and a half million. Well, I challenge you to go to Sydney and try and find a one and a half million dollar four bedroom, two bathroom house on 600 square metres.

But the point is, is that it also comes down to affordability. So when you start looking at this rates and affordability, it's the number one biggest driver. It's the absolute biggest driver. And we've got so much proof of it. Look at COVID, 2% interest rates, people borrowing like no tomorrow.

And so they will spend more. And I think at the end of the day, though, those rates are so ridiculously unnatural that we really are at a natural rate now. You know, let's call it almost 6%, 6% thereabouts.

You know, if you go to one of the major banks, so you're getting 5.75, 6%, you know, it's around that rate, right? It's very normal moving forward that that's the normal rates. I mean, that's what the Reserve Bank's trying to pretty much make sure we are sort of paying thereabouts.

And so when you start thinking about that, you start going, well, we've also had no income growth. I mean, there's reports to say that our income is very similar to what it was in 2010, plus a little bit. And now we have higher purchase prices.

If you look at it at a graph and a curve, I don't think you need to be an economist or in property. The rich will get richer. Absolutely. That will definitely happen.

But that middle ring prices tough to move because you've got to have the income to service a $2 million debt times four or five times income. That's a million dollars in income. to once you put in your car loan, your credit card, et cetera, et cetera.

Maybe it might be a bit of an exaggeration, but it's a big income you need to borrow these multi-million dollars worth of property. But that's what I think has happened.

In terms of your role and obviously the business involvement, we're talking 15 years, right? If not more.

And you've got a number of buyer's agents now, which I do think that's one of the big advantages of firms like yourself is that you can cover more ground, you can see more open arms, you can have more conversations with agents and agencies, and you've got more of established presence and the buyer's agent, the agency knows your firm, particularly not just because you've been around a long time, but you're also very much in the market.

But when you think about some of the learnings The things you do in 2025 that you didn't do when you're a buyer's agent for five years. Do you feel like every year you're getting quite a bit better?

And what's some of those bigger things that mistakes I guess you made early on that now you just wouldn't make them?

Looking at external factors, why things will happen. probably also taking a lot more time in understanding what someone really needs. And that's not what they say. They might come to us with certain budgets and different requirements.

And I think you have to have the care to maybe have some of the tougher conversations up front. And if you have that, you get a better outcome. And sometimes you don't know what you don't know.

And for us to assume that somebody comes and says, this is what I want, this is what I need. Now, some of the times that's correct. The problem is you don't assume it.

And I think what has happened probably in the last, say, 10 years is that care factor and making sure we really understand purpose in this whole process. I mean, we do what we call a fact find, which I'm sure you know those words extremely well. I haven't guessed where we got those from.

But we do that fact find so we can ensure that we're not making assumptions because it's very easy to make assumptions. Someone calls up, oh yeah, I'm not there after. I would probably rate ourself on that.

Some of the other things that I guess that we do better now than we did in the past also is using each other as sounding boards.

Because, you know, you may think you understand what the situation is, but it's amazing what happens when, for instance, I may run it off one of the other advocates or Kim and go, hey, look, this is a scenario. I just want to sound it off.

And you get slightly different opinions and it's learnings as well. And I guess that's also made us a lot better because we're a lot more considered. You know, you're also not looking at transactions.

Whether someone buys that property, another property, takes one month, takes six months, whatever it might be, it's about the client's best outcome. Genuinely, not just words that sometimes people can use. It's genuinely, you know, you don't not really make any difference whether they buy today, tomorrow, next month, whatever it might be.

And that care factor means you also are willing to let things go. You know, you can play bluffs. You can probably play the game better because at the end of the day, whether the outcome is a purchase or not a purchase. And this is not the case for all properties.

Like you've got some owner-occupiers who just want that property full stop in a story because then it comes down to the communication with them and the honesty with them so they understand the situation. And I think they're the things that we have got really good at.

elevation from a, I can get the job done, a validator, sort of facilitator. I'm good at getting the transaction and the deal done to actually, I think I can do this a bit better and moving more and more up into sort of a genuine trusted advisor. I think it does take years.

I think you've got to constantly be challenging yourself and looking at the client outcomes and going, oh, maybe I should have had that conversation. I felt like a should have pried a little bit, ask them a few more questions, have those difficult conversations.

And yeah, actually, it's a bit of a thing that actually helps your business, though, in the end, though, because the clients are way more aligned to what you're trying to buy.

They're not self sabotaging each other and you're all aligned as a team and you actually get a better outcome and you don't let that rabbit run away when it when it's there, right? I think that's what the best advisors do. And it's okay.

Obviously, the difficult conversation may lead back to where you were anyway, but at least you've explored that avenue and just haven't assumed that what they've said is the right. And you've dealt with that early on. I think that's absolutely what a lot of the great buyers do.

And the sounding board things are interesting because there's always different views on the agents games. What are they playing? How should we play this one? The client's saying this. We do that internally as well. Look, our strategy team will do that on clients.

Ben will often call me as I'm thinking about this, what do you reckon we should consider with the client? And I think it's a really powerful benefit because it's so stressful, the property market.

You have to have that real conversation with the client, high level of trust, because sometimes you really have to put the pedal to the metal, right? And everyone needs to trust each other.

And timing, like, you know, when you talk about the one percenters and so forth, it's not just understanding the game, but also understand the timing. And timing is art, not skill. And you can teach skills. It's very hard to teach art. And sometimes that timing is based on, again, a thousand different factors.

And if you have the client and they know their brief, they know what they can buy and they know what they can't buy and you understand them entirely, when you do find a good property, you can go. We need to act quickly and these are the reasons why.

Now, acting quickly doesn't mean that you have to keep following that through. You have to have a fluid plan. It's not about ego because things can change because there's other people involved and you have got no control over, full stop in the story.

And so if you have a fluid plan and you have no ego, you get a better outcome sometimes. You hope more times than not. But you can't always get the best outcome because you can't control other people when talking about property. And what is the right outcome?

Well, the right outcome for some people is to secure the property. That's the right outcome. That's the only outcome they want, right? Well, there's ways to do that. Then the other outcome to other people is fair and reasonable price with the right terms and conditions. That's the right outcome.

But at the end of the day, it's understanding those outcomes, having those conversations with people that are mature enough. And they will listen if you've also been able to prove that's what you're doing.

And I think sometimes it's not just proof in regards to well past, it's also, again, some of that care factor, that morality, ethics. If you do all those things, you do the right thing, the right thing happens.

Yeah, and the right thing I'll have for you from a business point of view, the reason why you've been around for so long is great clients stick with you, they refer to you, they come back when their life changes or their brother or sister or kid or parents need help, that you're sort of there.

And I mean, it's just such a, you know, it sounds obvious, but that's obviously a great business strategy as well, right? It's just looking after your clients. I think you've said around the timing, I mean,

When a client falls in love with a property and they know it's a good one, they've been looking for a while, you know it's a good one. But that's where you could have got a little bit of air out of the balloon, right?

Because you've now got to figure out how do you actually secure this property? And I think that's when a lot of clients get called out because there's ten different ways to try to secure it. Like you said, one way is just go and pay whatever you want for it.

But is that right strategy and are you going to regret it one day? So yeah, I think that's a huge value that you guys do.

I'll tell you one thing on that part, Chris. I'm always amazed when people go to a property and they tell the agent their whole entire life story and purchase story. I don't get it. I've never got it. I don't get it today. I still don't understand why other people do it.

And if there's a psychologist out there that can explain it to me, I'll be very grateful. But the whole conversations to agents, what we get as buyer agents, we might ask an agent, hey, who's on the property? They'll be able to tell me the details.

I'm talking like what properties they've been to, how many properties they've looked at, and give me the whole story on almost every single one of these buyers. You're thinking, but what's the benefit in those people telling the agent any of these things? They believe there is a benefit, but there's not.

And again, in a negotiation, whoever's got the most amount of information wins.

And so I guess that part of this industry is always baffles me where I think even if people used us just for the fact of playing the game right and maybe not talking, saying the right thing at the right time and not having to give away things, is huge.

I mean, we do a lot of commercial. In commercial, the first thing a commercial agent will do is, what's the purpose of your purchaser? What are they going to do on the property? Number one. And so from that, they then start to build a bit of a profile.

And they say, OK, well, it's a doctor. And they're going to be doing a medical center. And this property was $3.5 million. Now it's $4.5. And same thing goes for an auction campaign. Oh, well, doctor. They've missed out on this property, this property, this property. Tick.

All right, now I need two or three other people to bid against them. Whereas really, that person was smart. Don't talk.

Been guilty of this many times and I've worked with buyers agents every time we purchased and they always tell me to shut up because I absolutely find it hard to sort of hold back. It's just in my DNA. But you're right.

I do think it does shoot yourself in the foot because when they're so understanding of what you want and what you're looking for, they know how much you really want the property, right? And they know how much they can flex you. And it's so hard to control that.

And I think just as that buffer, if you know you're that type of personality, let alone all the other reasons you use Visage.

And that's one of them is just to give yourself to someone else who can take over when you know you're not the right person for it, as well as all the other benefits. Thanks so much for coming on today, Dave.

You know, as I've sort of said at the start, really respect you guys on the Bayside. You've really sort of owned that pocket for a long time and any clients working, you'd be super safe.

So thanks so much for coming on. Thanks, Chris. Been a pleasure.

Thanks so much for listening today. We hope you got lots of value out of it. If you'd like to speak to our guests today, there's links in the show notes on how you can get in contact.

And if you're buying your first home, upgrading, renovating, or need any finance-related queries, obviously we'd love to help. There's links in the show notes to us as a mortgage broker, and we look forward to next week's episode.