Episode 185 | Are rural properties still a great opportunity | Matt Knight, Precium

With current movements is buying rural properties still viable?

Matt Knight, prolific rural buyers agent of Precium breaks down the numbers and answers our regional based questions. Matt Knight made his own sea change 14 years ago, now has helped clients in a similar position to purchase their regional property, covering an area from Wollongong right down to Batemans Bay. 

Covid is back at our doorstep will this new wave of infections push more buyers out into the outskirts similar to 2020. Will the domestic migration of last year catch up to buyers as they question if what they bought is what they’ve got? And how much gas does the rural market have left?
RELEVANT EPISODES:
Episode 173 | Buying in Byron Bay: Overhyped or shrewd investment? | Michael Murray
Episode 125 | Innovation in auctioning: how are we selling now? | Damien Cooley

GUEST LINKS:
https://precium.com.au/

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in July 2021.

Veronica Morgan: COVID has provided the impetus for overnights across the nation to up stumps and move to the coast or country. And for every success story, you know, those people who have been able to realize their long-held dreams, there will be others. You realize it's not for them. And then there's the impact on the towns they moving to. Is it possible they could lose the very attraction that drew the urban refugees there in the first place.

Veronica Morgan: Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on here can be taken as personal advice. We always recommend you engage the services of a professional.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free fall or forecast report, which experts can you trust to get it right? The elephant in the room.com did I use

Veronica Morgan: This week? We're talking to a regional buyer's agent who after making his own sea change 14 years ago has created a business, helping others make the move to the south coast of new south Wales. Matt Knight from premium covers a huge geography from Woolongong ride down to Batemans bay. And we're keen to understand how these regional markets have changed over the past 12 months, the impact on prices, how communities affected and whether he believes that these changes are sustainable. Thank you so much for joining us today.

Matt Knight: It's a pleasure to be here and thanks for having me, Matt.

Chris Bates: Thanks for coming on. I guess the last couple of years have been interesting to be a buyer's agent in the regions and particularly regions where people are running away from the capital cities too. Can you please just talk us through pre COVID the top of bars that were sort of heading that way? What really happened last year, but also the real change in maybe 2021 has things shifted potentially in a different direction.

Matt Knight: Yeah. And that's, that's a, a good, big grinding set of questions. Chris, I'll start, I'll start with the first section maybe, and you can redirect me as needed, but I think pre COVID what people may or may not realize, because recently there's been so much media about this whole thing of leaving the city. Yeah. But pre pre COVID, that really was already an established trend.

Matt Knight: So as Veronica said, you know, I grew up in Sydney, I'm at a choice with my wife and two children to, to exit the city 14 years ago. And in a number of people I know have done the same thing over the years, even in those younger age brackets and for people who are in the last 10 years or the closing stage of their career, retiring to the coast is not new, it's been happening for decades. So, so that trend to move here from, from one of the capital cities or to move to any stretch of coast that's or countryside that's ideally that's within a couple of hours shooting distance from one of the capital cities, you know, the coast north and south of Sydney, the coast, north and south of Brisbane, the coast, east and west of Melbourne. They're all very much established areas where people have been heading for a bit of a lifestyle shift for many, many years. Yeah.

Veronica Morgan: So that's not new, but what you're saying is that the, the age or the demographic is

Matt Knight: Changing. Yeah. We'll look definitely the folks who were willing to move at a younger age pre COVID, I think were more aware of how mobile they were. So there were a few people who are in coding or software who had already established a work from home arrangement with their employers or people who owned businesses and were sort of free-floating digital nomads or entrepreneurs. They're the kind of people who were already moving unless they were service workers, such as teachers, police, nurses, and they've got really portable jobs. So those kinds of people, and of course, trades who can work in any area pouring concrete, you know, carpenters, plumbers, electricians. So th there was a smaller subset of people who were willing and able to relocate with young families. But I guess the, the thing that happened with COVID is that the average corporate worker, all of a sudden discovered a freedom from, I guess, being tethered to a CBD in the, in the way that they had been.

Chris Bates: And so a different demographic of people or a different class of worker became geographically more flexible around where they can buy I a lot of anxiety, I guess. So pre COVID, you know, 2019, you know, young family that maybe it's corporate life in, in Sydney, but wants to escape to somewhere in the south coast, but they just couldn't really make that move. You know, there was a bit of anxiety once I needed another job, what happens if I lose my job? What happens if I have to do the commute five days? Or how am I going to manage it with kids? And the commute was a lot of those sort of worries, stopping people, doing it in 2019. And that completely just went off the radar in 2020. And is it coming back in 2021, if you notice any shifts this year,

Matt Knight: I think pre 2019 question is that, that by volume, yes, there would have been a lot of people who would have liked to have left the city and didn't, but realistically, that probably are not the kind of people who would ever have picked up the phone and called me. I think they make those decisions before they get to hiring a buyer's agent, but the ones who'd already wrestled through those issues and decided this is worth it anyway, are the kinds of ones who would call up. And they were particularly focused on hugging the train lines and getting an express stop on a train station, mixed with a good beach, because it offered the combo of the commutability with the lifestyle. So they were there, but people had to fight a bit harder to find the perfect blend. Yeah, I think COVID, it did a few things. One is it forced people to realize, Hey, I am working from home like it or not. And I probably will be for a year or two it's sort of now, or never like, if I'm not going to try this thing now, when am I going to try it?

Matt Knight: And so it pushed a whole lot of people into that Carpe diem, like let's seize the day and have a crack at something type Headspace. So I think that's the psychology that shifted in 2020. Yeah. I definitely think people have come off any initial panic. People are being much more pragmatic and thinking longer term. Now people are realizing that they will be spending time in an office, but they'll also be spending time working from home. And I think people have accepted that there'll be a blend of that reality for their working life. And everyone's blend looks a little bit different.

Chris Bates: So do people go further, they stay close to the train stations, you know, maybe there's the rules and north of Wollongong and then maybe down to say Kiama sort of area. And then they didn't really want to go further than that. I want to just say, you know, easy commute. And then in 2020 that potentially went a lot further and more inland, but now they're going back to wanting to be close to the train station. Is that what you're saying? Yeah.

Matt Knight: Look, I think that's a fair comment. And I think the answer is it depends a little bit on how people are trying to predict, how often am I going to be in the office versus how much am I going to be working from home? So literally last night I had a call from a couple who are based in the Northern beaches and the fellows in marketing. And he said, I've pretty much now confirmed with my agency, that I will be only required once a fortnight. So he's going to spend one day a fortnight in the office and they're letting him work from home for the next year or two, the rest of the time. So that gives him a great deal of freedom around what kind of a commute he selects because that company and him have formed that decision and put it in writing. And he's now able to basically make a choice based on a one day into every two weeks in commute. And people are willing to travel a lot further once a fortnight than they are.

Veronica Morgan: If you've got any sort of metrics on that, how far?

Matt Knight: Well I've had software coders who work from home, who's moved down to Merimbula that's five and a half hours drive from Sydney. Yep.

Veronica Morgan: And then someone who's got to go once a fortnight. What sort of, is there like a pain point? Is it Austria? It's three hours too far to go.

Matt Knight: Yeah. So if, if you're thinking about getting there every single week, then I think probably 90 minutes to two hours is about as much as people want to tolerate. And it really needs to be only once a week at that level. I think if it's, if it's daily or every second day, then they're still looking for that kind of one hour, 60 to 90 minutes, one to one and a half hours to topping out. So a lot of people will say, 90 minutes, we're talking maybe from the CBD really is probably crime or isn't it? I mean, yeah. Going into sort of bury or now rent it to Jarvis bay. It's in the twos. Yeah. You really, once, once you down at the J bay and further south, you really are in the twos. Yep.

Veronica Morgan: For anyone who doesn't know what I mean, there is

Chris Bates: Road potential changes that are making that commute shorter. And so people are sort of also saying they're willing to go further knowing that in this time these communities will get better because of road upgrades. Yeah. It's a factor. I think it's not a big enough factor to, to be a standalone reason for people to move. But when they're adding a, when they're making a pro and con list, it's another pro to add on that side of, yeah, we're going to do this. And for those who, who don't know, the two road expansions that Chris is talking about is the Albion park bypass, which is taking out the worst bottleneck in the Southern half. And it's terrible. I literally, once a week I spend 25 minutes sitting in it and I know Sydney folk will think 25 minutes. What are you complaining about? But that's th that's the travel about one kilometer along a section of straight road.

Matt Knight: So that needs fixing, it's being fixed right now. The other one is the barrier to Bomaderry jewel carriageway section. And that's taking out a very narrow strip of road that was pretty slow and pretty dangerous. And it's turning it into a very, very cruisy section of, of dual carriageway. And look, I think both of those road improvements will take something like 15 minutes, maybe closer to 20 off the trip south.

Chris Bates: Yeah. My view is that if you're going to leave, you want to go for something special, right? Whether it's land, whether it's a view, whether it's a pretty special building, you know, are you finding that a lot of people are thinking if I'm going to go, I don't want to reduce my purchase price too much. I'm still willing to pay almost Sydney prices, but I want to get something special. So the top end or the more scarce or assets of that lifestyle shift have gone up a lot, but then the sort of median and sort of the bottom end, haven't gone up anywhere near as much. Have you guys real life sort of actual case studies where you've seen that, okay.

Matt Knight: I think it's happening at all levels of the market. I've had clients who came out of, you know, fairly living on a fairly busy road in the guts of Western Sydney. And they're really happy to be able to buy within one or two kilometers of, of the beach in a fairly working class suburb of Woolongong for, for, you know, five, six, 700,000. And the, the fives and sixes are kind of gone now that was last year. And so they're not necessarily chasing a view, they're chasing an affordable equivalent to say a Western Sydney property. So at the bottom that has happened. But certainly the, the big talking points on the coast have been what's happened at the top of the market. So, so those beach fronts, the ones with the panoramic water views, the acreage with the panoramic ocean view have gone absolutely kind of crazy in terms of prices. And there's been some very big numbers paid for some of those ultra premium properties with

Veronica Morgan: Those ultra premium properties. So pre COVID, how many buyers were really in the market for them? You know, did they sit on the market for some time just looking for the right buyer or were they always, they always had that sort of element of scarcity, which meant there was always going to be a number of, and I would imagine typically a capital city person, or there maybe I'm wrong on that too, who would be a typical buyer of these properties and how long would they typically take

Matt Knight: The really high end stuff? And we're talking kind of 5, 6, 7, 8 million on the south coast, which may or may not be high end, depending on what part of Sydney you're from

Veronica Morgan: Pretty expensive. We'll go there and I'm in Sydney. Yeah.

Matt Knight: So, so down, down here, those are what we call premium numbers. And down here, the people who buy them typically have some kind of a, they either have an existing real estate empire, or they have a business that's gone, gone a bit ballistic. And that the volume that I seem to have noticed in recent years is people who have some kind of an online business interest. That means that they're now their net worth is, has gone up towards 10 or 20 million and they can afford to do something like that. So if you're asking where's the new money coming from, that's where it seems to be well beforehand. It was, it was more, I guess, more those established well-financed families, your Eastern suburbs, you know, them beaches and people who've got assets

Veronica Morgan: That was second properties. They weren't primary homes, right? Yeah.

Chris Bates: You noticed a trend around that because the whole work from home sort of scenario, it means that you don't have to have one home, I guess, you know, in the reality you could have two homes, right? When I'm in the city, I live in the east or the Northern beaches, but then Friday to Tuesday, I lived down the south coast and maybe kids schooling can create issues there, but have you seen a rise in the second home? Not so much a holiday home, but actually just a true second home.

Matt Knight: Yeah. And I think, I think once people have their kids past a certain age point, they start to feel very fluid about that. So a couple of my clients who have spent those kinds of numbers, buying something with a big ocean view on acreage, looking over and gong, those clients have teenage kids who are finishing off high school. Then they're certainly not selling the Sydney property or moving their kids out of those schools that they're saying, this is a second home. Whether you call it a weekend or whether you call it up, Hey, there's a lockdown let's disappear for a month and walk it or not that's happening. Right. Of course. So, so people are coming down for a month at a time to do work. And when there's a series of meetings on they're going back to the city and they're feeling much more fluid because those, those particular clients, I guess, are the ones who really have, I've heard them complaining the most about being unable to travel to Europe or travel to the states. And so I guess they're taking the budget that would have gone to Aspen or to, to Switzerland. And they're saying, well, that can finance, you know, a property pull up.

Matt Knight: I know it's tough, isn't it? I mean, I'll convince them that as process rise, especially if you weren't expecting your property to be worth a lot more in the future and you haven't got other assets to lean on as you get closer to retirement because you haven't been able to, or whatever it is, and the communities are shifting, which is what Veronica was mentioning in the intro. But are you noticing some of the locals potentially saying right now is the time to go further south, go where we, what we think the real escape from the escape, or, you know, people cashing in because the price is arising so much. Is there a cohort thinking about doing that? Yeah, so there's, there has been a, a group of people who are moving to the deep south, kind of the Merimbula Tura beach down towards the border with Victoria.

Matt Knight: And they're citing that it's just too crowded up, up north in the Shoalhaven and in the Illawarra and the climber region. So there are some people who are seeking real, absolute peace and quiet and pristine, empty beaches, and they can still find them if they're willing to travel further around the coast. There's a small group of people doing that. I think there's a group of locals who are cashing in, in terms of running businesses and doing very well out of the new clientele that are arriving. I mean, there's a young fellow about a K from my places who's just graduated high school, finished his study and sourdough and opened up a cafe. And he's absolutely killing it.

Matt Knight: People that dropped fibrillar driving from miles and miles around to buy his bread, you know, it's, it's, it's amazing. And so there's these people who are starting boutique businesses doing really well because of the demographic shift. There are people who've had enough equity to degenerate to, to buy a beach house and run it as an Airbnb. And the Airbnb returns are off the charts right now. Won't be forever, but they are right now. So there's all kinds of people doing different things. And to facilitating the work from home, sort of the.

Chris Bates: Coworking space, right? A lot of coworking companies are talking about the hub and spoke model, I guess, you know, the CBD to all over the city, basically little coworking hubs. Have you seen much movement along the south coast where, you know, coworking places have opened?

Matt Knight: Yeah. Yeah. So I had a small one pre COVID with a couple of business owners that just organically evolved accidentally. Right. But then for other reasons, they moved out of area and that was a big space. So I, when COVID hit, I shut that down there. There's another one that's probably a lot more deliberate and more professionally run in, in Milton that popped up last year. So these, these are happening in regional areas, particularly, probably the areas where there are some of those computer based service workers hiding. And they just want somewhere to go sometimes. Yeah. Cause, cause you can be a bit isolated or a bit, a bit boring if you're, if you're working from the same home every single day. Yeah. If you don't get

Veronica Morgan: To escape, cause this is the thing, isn't it, we need

Matt Knight: Some social, then it's some social interaction and some people crave that more than others. Yeah.

Veronica Morgan: But apart from anything else, you take yourself wherever you go. And I guess what I'm wondering is, and I know myself, you know, there's certain things I love about living in the city. You know, there's the convenience, there's the coffee, there's the bread, there's the wine bars, et cetera, et cetera. There's all the, all the, the things that I view as being good. And I often think about tree change at some point as well because, you know, I, I believe it or not, I like to pick all, you know, I like to do those sort of, you know, those romantic idea of what people would do if they they did that escape from the city. But the thing is that when I look at areas, I look for areas that have that sort of urban blend, you know, I don't really want to leave the, the metropolis.

Veronica Morgan: Right. And I guess that's, what's the case with a lot of these other, these, these country towns where they're bringing in, or they're, they're starting to have a flavor of the lifestyle that people like or the convenience of people like in the city, but of course, and that fundamentally does change the vibe of the place. And so for those who are purists to really like country town, to be a country town, you know, they're not going to like that. Whereas the urbanites like me they'll love it. So, I mean, is this a problem or is this just evolution?

Matt Knight: I guess you're asking someone who's part of the problem, whether it's a problem. Cause I did it 14 years ago and this is the fascinating conversation that, that I do have with the second and third generation local farming families, when I get to meet them and talk with them, you know, how do you feel about this stuff? You know, the whole, like the anger around this issue was first, I guess, talked about by Bernard salt on the bar and by kind of concept, you know, that you'd be to move to Byron bay and then said, no one after me because you recognize my paradise. But they moved there right before, before they decided that the next person moving there was going to somehow change it. So I don't know what the answer is. And most of the local farmers who I've spoken to, I mean, I spoke, I was on a paddock two weeks ago talking to a, a farming family. Who've owned a property for 120 years. Wow. And, and they are looking at selling because they realized that the price of real estate has eclipsed, what they can do by, by herding cows. And it's like, well, how long are you going to keep hurting cows for, for X dollars when you can sell your property for 20 X dollars, but

Veronica Morgan: Then who hurts cows and where are they going to hurt them? Because we're still letting beef. Oh,

Matt Knight: Geez. I know, I know. Well, these were actually dairy farmers and so people are still want to drink milk. So there, there is, there is some interesting, I guess, wrinkles that could come from too much of this sort of transformation because we do actually still want to do things like, you know, eat and drink

Veronica Morgan: Shopping as that sounds. Yeah. Yeah. I mean, as a society shoe, I was listening to some, you know, some news articles this week and the developers saying we'd just, they're selling out of land in house, on land packages and the outskirts of Sydney and even admin angle and places where 80 K's from the CBD. Right. And they're, they've got ballots to try to to manage the demand for landfill is people that want to build their, you know, their dream home on a handkerchief. And you know, and the solution that develops has got to release more land, got to release more land. I'm like, don't you get it that this land, a lot of this is farming land, you know? And so what we're talking about here, you're talking about that extends not just in the outskirts of our metropolises, but we're talking right down in the sea and tree change belts now. And has that land gone up in value because it's been raised

Matt Knight: No, it's gone up in value because of the opposite. So, and the, and the thing I actually respect is that our local councils have said that dairy and prime agricultural land is sacrosanct and we're actually not going to turn it all into residential housing. And the farmers are all happy about it because they've got a hundred acre blocks that they're not even allowed to chop into, into two or three blocks or lifestyle like ridges on 10, 10 acres. They have to keep them as a hundred acre, lots with one dwelling. But what that's done is put an ultra premium on those properties. And so even the like land Rover brigade, the Northern beaches, corporate money that comes down to buy those hundred acre, lots with a home on it. They're, they're adjusting the property out to a local farmer. Who's going to run the cattle and they're just using the home as a holiday home. So there's that, there's all kinds of interesting developments that happen. But the premiums that are being attached to the agricultural land down here is precisely because they won't chop it up.

Chris Bates: I mean, the pros and cons of people making that shift. I guess what Veronica was talking about there is, yeah, I don't want to leave because I still want to have the lifestyle benefits of living in the city. But that may be one thing that stops people sort of making that shift. But there's, there's some other things that you think that people fantasize about this sort of move, but there's still something holding him back. Maybe it's kids schooling, maybe it's family, maybe it's friends, but there are other things that you think that this tree change is not going to go at full speed because the lifestyle is something it's missing down the coast.

Matt Knight: Yeah. Look, I think the, the definitely people coming from the city expect a certain standard of dining and have coffee and have basic sort of shops and infrastructure as a, as a starting point. If that's not there, there are a whole lot of people who just won't touch an area and then the better, the better the food or the coffee, the reputation is in a micro location. The more pool it has. So Benlysta Hedland, which is sitting in between Mollymook and narrowly beach that has [inaudible] restaurant on the end of it. And it has another two quality eateries and some great coffee or within about one kilometer. And I've had, I think, three clients in the last six months who rang up and said, the brief is we want to be able to walk to those three properties, to be able to eat, to be out, to eat and drink. And if we can walk to the beach, that's a bonus. But those, those places are actually where we want to be within walking distance. So we draw a circle at 1.2 kilometer circle and say, well, within 20 minutes, you can walk to these three places if you're in this area. And then that's our path.

Veronica Morgan: That's hilarious. So that's just taking absolute inner city sort of mentality to the country. So gold. So really you sort of got to take a punt. Any investors or speculators are going to take a punt on with where the next restaurants are going to be opened up. 

Matt Knight: Yeah. And then look, there are some, there are some families who were very much into doing research into the local schools and they are picking areas based on school results. And that's happening. People are, people are jumping online and checking reviews and checking results and that plan scores. So, so certainly in, in Woolongong, that's always a part of a new client's conversation when they're relocating out of Sydney, which of the good schools, which are not the good schools, which is the one we absolutely have to avoid. That's a big part of setting a location brief when someone is moving to a new region, for sure.

Veronica Morgan: Wando and so what's a good school. What, how do they judge it by whether the kids look neat in their uniforms or whether the NAPLAN scores or whether the, you know, they've got a high proportion of kids go to university or whether there's drugs or I mean, less drugs or more drugs or different type of drugs. I mean, do you know what I mean? How, how do, how are people saying, look, how are they quantifying? What they, they,

Matt Knight: I think they're making their best attempt to quantify all those things. So I think they are looking at net plan scores. They are looking at university entrance rates. And then they're checking. Is there any evidence of a real drug problem? No, it's probably. Okay. Is there evidence of a great deal of public housing immediately surrounding the school now? It's probably. Okay. So those, those general demographic checks that people can do, they're doing, working out whatever they can do to try and firm up those assumptions, but there's still fuzzy there. There's no way to perfectly measure it. And what about some of the integration to the community? Because you might have, you know, especially at different stages, the community matters more, I guess, to different people. And it may, how are people sort of making these lifestyle shifts in time of actually sticking around? Are you finding that there's these new ways that people have, whether it's that Facebook groups or something like that, but you know, why is it a people that really sort of connecting with the community much easier than they would have in the past and making that transition away from their friends easier?

Matt Knight: So when, when families come with young kids, they almost have an inbuilt excuse to connect with other young families. And it happens around the preschool. It happens around the primary school or the high school. Obviously COVID has been a bit different because the schools have really had a base, a bit of a schizophrenia relationship with parents because they're being told, don't let, don't let parents in, let parents in invite them to assemblies. Don't bought them to assemblies. So that's been tricky this last year or two, but pre that if a family's coming with babies, toddlers or pre or school aged kids, that's a really a natural way for people to connect. They connect around around sport, they connect around local churches. So I can only speak to my experience. And that is my encounter with the south coast was a very welcoming one. I found that we immediately met people and fell in love with the town and the people of the town, not just the geography and that's continued.

Chris Bates: And we're a part of a number of community groups. And we enjoy connecting with people. And yes, there's some turnover, people move here for 5, 6, 7 years and go, actually, this isn't working for us anymore. We're going to move back to where mum and dad are in Melbourne or Sydney. That does happen from time to time. But by and large, it's, it's been a pretty sticky experience. We've got a lot of friends who either were already here or moved here at the same time. And for me, it's, I can only make personal choices. Like if I'm here, I want this to be a better place. So I I'm, I'm the president of my local high school PNC because I want my local high school to function at its best level and I'll do whatever I can to make that better. So for me, that that's, I get great comfort in knowing that I'm doing what I can in that area. Not that it's much, but it's, it's just, you know, a little thing. And I do see that the parents who come here deliberately with an intention to be a part of a community, they make choices about making that community better rather than just rather than just taking or just consuming, which is, you know, that's nice.

Chris Bates: One of 5 million versus one of 50,000. Do you know? You can't know where to hide, I guess, and also a way to make a difference in the community rather than now. Yeah, just the number, right.

Veronica Morgan: I was going to ask you about that, Matt, because I was wondering, you know, it's not successful for everybody, you know, when they move out of the city, they often there's unrealistic dreams that are not met. I I'm sort of putting words in your mouth now, from what you just sort of said there, that it requires an effort to actually make an effort to go beyond yourself. If you go somewhere, you can't just go there and expect it all to be handed to you on a platter. I mean, how often do you come across people who've regretted the move that hasn't been right for them. And what would you say would be some of the common factors?

Matt Knight: Historically the common factor was how cyclical the, the local economy was. So, so the people who were friends of mine, who, who left 6, 7, 8, 9 years ago, it was actually in a, we had a building downturn and the place was very quiet. And the Australian economy, wasn't, wasn't really booming either and neither were real estate prices. And so, you know, if you're, if you're a carpenter or a plumber or a tradesman and you can't get work here, it's pretty hard to feed your family, but you know, there's work somewhere else. So it's pretty attractive to move. So that, that did happen. And right now we're in, in the middle of a boom. So that's, that's not the case at the moment, but some years ago that did occur.

Veronica Morgan: So you'd say that was more economical. Are there other reasons?

Matt Knight: Look, I think there'll be some families who just miss their extended connections. If they've had a crack at going in and then realize that, you know, grandparents or aunties or uncles or cousins are several hours drive away. And there are some people who really crave that on a more regular basis. So definitely I think there'd be people who are, who are seeking connection and they move away from the community is just too hard. And they actually moved back because they realized how much they miss that community.

Veronica Morgan: If you like, what you're hearing here, please share this episode with others, you feel would benefit. And while you're at it, why not leave us an iTunes review five stars, please. Every review helps make it easier for other people to find us and hear what our amazing guests have to say. We love hearing your questions and we're planning more listener Q and a episodes. Please send your questions in. You can send them via the website, which is the elephant in the room.com.edu or directly via email. Two questions@theelephantintheroom.com.edu. You mentioned also it's booming down there at the moment, and that's not just as a result of COVID because of course there was devastating Bush fires down there, beginning of, well, the end of 2019, beginning of 2020. And that's also an impact on the rental market or the availability of rental stock, but also the actual people renting. It was some, it was at 500 families or something that were displaced in that time

Matt Knight: In, in the shell Haven. Yeah, if you add the entire coast, it was closer to a thousand, but in, in the, in the patch within sort of 40 minutes, north and south of where I am, it was about 500 families. And they're, they're established local families who lost homes, who then were immediately thrust into the rental market because I literally only know of one or two families who left the region. So most people said we're staying and we're rebuilding, or we're going to buy something, you know, that maybe isn't quite, quite so exposed to the Bush. And some of them absolutely just wanted to rebuild where they were. They said, this is bad, it happened, but we're staying. So, so those 500 families immediately, you know, just crushed the rental market from what was sitting at around 1% to zero. And then there were families who even after that happened to were basically homeless until till some, some owners of holiday homes said you can have our place for a year. So, so definitely there was some nice community communication that happened amongst networks to solve the housing crisis, because there was certainly no way that that market forces could actually fix that in a short term.

Veronica Morgan: And that's been sort of like the perfect storm for property prices.

Matt Knight: So hasn't it? Yeah, because those 500 families are literally, they're probably 60% of the way through finishing their builds and exiting into their own place. So, so they caused a very short, sharp shock to the rental market. And then COVID came as a second wave. So we've had almost, we've had a sort of a half a percent vacancy rate here for probably almost two years now. Plus you go people, paper moving, they're sort of,

Chris Bates: You know, check out before you actually buy down there. Just people moving out of home.

Matt Knight: Um so rents have been growing at sort of 10% plus per annum.

Chris Bates: Yeah. So, I mean, I guess what we've noticed before 20 19 20 20 people did want to move to the regions and we'd always ask them, okay. So if you did leave and you can't afford to buy ultimately where you really want to be in Sydney, but if you did potentially move, what other areas would you consider and what people would say, you know, central coast or the south coast or blue mountains, et cetera.

Chris Bates: But very few people actually did. You know, it was a handful over that year that actually went against the grain and said, no, no to Sydney, I'm going to do the same change last year. Absolutely. It was completely the opposite. People said, my preference is actually to move to these locations rather than buying Sydney, but we've seen it kind of flipped back the other way this year, where a lot of people are saying, well, I would like to move for example, to a VOCA, but now it's 1.7 million and it's not a million anymore. Or I would like to move down the south coast, but Hey, there's very low listings and B it's super expensive now. And I might as well just buy an apartment in the city. Have you seen a shift in terms of a drop in people willing to do it because it's got more expensive and you know, the concerns about return to work. Have you started to see these fears start to jump in and people go, you know what, I'm not going to make the move because it's not that much.

Matt Knight: Definitely. I've had some clients who, who came on board with the hope of buying a really amazing beach house in the Northern suburbs of Woolongong. And they, I tried to warn them and they work in for a rude shock about prices. Yeah. So I've had clients with a $2 million budget trying to buy into the rule in Austin Mir, and they've been unhappy with the quality of stock they could get for that money. And I've actually had had one or two who said, you know what, we're not buying here. This market's too hot. These prices are too high. We don't see value. We're actually going to go and buy on the sunshine coast or we're going to go and buy in suburban Sydney.

Matt Knight: And so we've had, I've had a few clients who, because of the low stock levels and the price growth have decided that yeah, yeah, the value isn't there. And at a certain point, you know, money does talk like, you know, everyone wants something, but if it's too expensive, then they just, they quickly move from FOMO to sort of depression or resignation. Then that's not the market for them.

Chris Bates: Yeah. It's that sort of fudge factor. Isn't it. When you get to a certain price point somewhere, if I'm gonna spend this, maybe I should look at the suburbs and some of your demand starts to wane at as after big price rises. And so where those people are going, are they going further south? Like, are they saying, well, I'm not going to buy into rule, but I'll buy climber or Jaron gong, or, you know, even pass Jarvis bay, you know, you know,

Matt Knight: So that was literally this last night's inquiry was a family from the Northern beaches who were referral from a friend who, who I purchased into Austin, me. And they said, we can only afford Winona, which has four suburbs south, but that's, but we've visited enough to know we're happy with it. So we will go there. And if you happen to find us a bargain up in through Austin mere, great, and basically said, there's not a mid ones budget for what you've just described. We can't have it. So, but, but you can have it further south. So there are people doing that. And there are other people who are just saying, this is more expensive than my area in Sydney. This is ridiculous. I'm going to do something else. And then I switch

Veronica Morgan: Interesting. I think the people's perception of value and it obviously, you, you probably put pop people into various buckets, but that idea that if I can't afford it, then that's not good value. That's not good value, but I can't afford it anyway. But also, yeah, yeah. But then there's that idea that, okay, well it, any coast of do, you know, okay, well, this coast is out of my reach. So let's just look for another post versus the, the reality that people are just going there for affordability reasons. And so therefore if it's unaffordable, I'll stay where I am. So I guess there's, there's quite a lot of reactions that are possible to the fact that prices are rising as, as high as they are. Do you think that they'll stay? I mean, I guess particularly north of Woolongong, you're talking about there through all and ask me or places like that.

Veronica Morgan: Like, that's, that's pretty unique in the sense that you've got a good train line. It's really on a good day. Even a drive on a good day is an hour to the city and that's a good day. I get that. But, but it's, it's possible, you know, and certainly that train line is a very, very good train line. Are those prices now there for good. Do you think, I mean, I know it's ridiculous to ask you to predict property prices, but do you think now that there's a, there's a good foundation under that area to say, you know what, this is it, this is now got a sustainable demand for property here that we can't see is going to change because of, you know, needing to go to the office an extra day of the week or, or any foreseeable change.

Matt Knight: You're right. That is ridiculous to ask me to predict

Veronica Morgan: Properly. I feel comparing that in what, I guess what I mean, a better phrase, the question that if you're, if there's going to be a continued migration or demand in these areas away from the major region, the major metropolis and even to Woolongong, right? So, so you say, right, people are going to make this decision to live further away from Sydney and go for the beaches. And but they still need to have a reasonable commute or these suburbs now effectively like a satellite of Sydney in that they'll always have this demand because the further away you get you, you do compromise significantly on that accessibility. And also on that stretch, that particular stretch along there, you we've, I've had this discussion with you before Matt, you know, there's an escarpment that actually stops. There's only so much land, you know, there's only so many properties. It's, it's V talk about scarcity when it comes to property. It's, it's very limited. Am I answering my own question here that potentially now it's, it's reached a threshold of demand that, you know, you could see to be fairly consistent in terms of its attraction to buyers. I

Matt Knight: Absolutely do think that so the, the bluest chip areas with the best beaches in the, in the majority of homes, having a water view along that stretch of hillside, which is absolutely constrained by a big cliff and an ocean. So there is literally no supply coming into that market. And the council has no will to rezone those freestanding homes into high rise apartments. And geotechnically, it's not even safe to do that because they've had landslides coming off that cliff. So they're never going to do that, right? So you are absolutely going to see sustained demand for those areas because of their proximity to Sydney, the amenity and the desirability that they offer. I think when you combine, you know, retirees, when you combine cashed up locals, and when you combine the Sydney, sup's, I think you've got just too much demand for a very small number of homes to see any great price drops, especially when you cut that supply down, because a lot of the houses are too far up the escarpment.

Chris Bates: I think that, you know, you get light issues. And there's a lot of, we were just down in Bambara couple of weekends ago, just on Airbnb. We've stayed in our sphere about a month or two ago as well. I actually love it down there, but you know, the train line is pretty noisy and a lot of houses are pretty close to that train line because there's not much land anyway. And, you know, I personally, I wouldn't want to be buying near that. And then there's a few busy roads that sort of, you know, are quite big in terms of number of housing stock. So if you took out the busy roads, the ones around the train and the Scott, and then you cut that housing stock, the ones that don't have those problems, ultimately, then there's no compromise, right? You've got the views, you've got the beach, you've got good schools down there and you've still got the train into the city when you need.

Chris Bates: And I think that's a different price bracket now where people would say, well, I'll have to compromise moving down there, but now they're like, well, no, I'm not making any compromises. I get everything I want. And it's still affordable when I compare that to comparable properties in Sydney. So you're saying sort of, yes, it's had great growth, but ultimately could have a second wave where people still see it as good value compared to comparable properties in Sydney.

Matt Knight: Well, I've had a few clients come down with three and $4 million budgets wanting that precisely because they tried to get it on the north side, Interra go and a VOCA. And they realized that they actually couldn't have what they wanted on the north side. And they realized that they could either, there might've been a 10 or 15 or 20% differential in the quality of that piece of real estate for the equivalent thing on the flip side of Sydney. And there was no difference in the quality of the beach. And there was no difference in the other things that they were looking for. So they, you know, with, with that budget of say three to 5 million, they, they could actually get what they wanted with no compromise and be a million bucks better off for the, for the real estate that they'll buy

Veronica Morgan: And have a better commute, Terrigal and VOCA is miles away from many, any train. And there's a long way to the highway too. So the freeway, yeah, that's right.

Chris Bates: Because the airports in the south, like, I think that makes a bit of a difference as well. Like if you, you know, you live on the south coast and you want to go down to Melbourne for a weekend, or you want to go to Adelaide or you want to go overseas, it's much easier to get to Sydney airport than if you say living in the central coast. The other thing is that then either government's been talking about it for 30 years, but you know, the FCX freeway, which I think they're calling the MCX or something, Matt you'd know this better than me, but ultimately there's going to be a new freeway from south of Sydney all the way through to the national park at some point, is that your sort of prediction over the next 10 years that that's all going to be sort of done?

Matt Knight: Yeah. Look, I certainly don't want to predict the timeframe of what the RMS is doing because they, they have frustrated many smarter people than me before. I mean, I drove through Miranda a couple of weeks ago and saw some, some actual prep work for actual roadworks, which is like, we've been talking about that since I was a kid growing up in the shop. Yeah.

Veronica Morgan: Did you, I didn't know that cited. I grew up in the Shire too, which is sort of one reason why I've always exactly right. Yeah. It's one of the reasons I have a fondness for the the Northern suburbs of Wollongong too. And as we're having this conversation, I'm ruining the fact that there's been many times when I thought, you know, what, it's time to buy something down there and identity. But I'm curious too though, you know, so we we've established, we agree that those Northern suburbs of Woolongong yet, they're pretty much set there, there it's all built into the price now and potentially will be for a, for now on where are some of the areas though, where you think, you know what, this is overinflated, there's nothing really to sustain prices in these areas when the sort of frenzy goes out of the market and you don't have to name towns, but I guess what I'm keen to, to hear from you, what are the things that you look at and think, you know what, that's got nothing to hold prices up once this all dies down?

Matt Knight: Well, I think the, I mean, his, I can only go off history and historically the far south coast has just been a lot more cyclical. So it'll have a great boom when the boom's on. And when I say far south coast, I really mean kind of everything from Maria and the rumor down,

Veronica Morgan: Because this has it's about

Matt Knight: Four and a half sort of Batemans yeah. Depending on where in Sydney you're leaving from, and whether it's a Friday afternoon or not, these numbers have a fuzz around a bit, but, but certainly Batemans bay has direct line to Canberra. So vitamin spies a little bit, pretty much as to the, of its own drum because when Sydney isn't visiting, Batemans sometimes Canberra is. And so it's a fascinating little town, but south of there, you almost need either Canberra or Sydney to decide that where they're willing to drive that far and either way it's hours and hours, like more than four hours. So then you end up with these booms that do happen. And even like, just a couple of weeks ago, we had a very well-known Sydney hotelier buying into neuroma in a pretty big way down there. And talking about that, as you know, maybe the gentrification of neuroma is about to arrive now. So these things happen. But then we do typically, if you look at the price graph back 30 years, we have had some chunks of 5, 6, 7 years at a time, which is a long time where there's been no price them. So they are cyclical markets and every regional or remote market tends to be more cyclical or more, more flatter for longer than compared to a more consistently in demand capital city style market

Veronica Morgan: Point though, we're down the coast where it's closer to Melbourne than it is to Sydney. It is a long road. I've driven it a few times actually, but it does that matter. Does that change? Are they buyers from Melbourne that come north?

Matt Knight: Oh, absolutely. There are. But once you're in the, in the kind of Eden to Merimbula stretch, you're a long way from anywhere. And if you have to commute regularly for work, you're jumping on that plane. That's the interesting thing.

Chris Bates: We've got a few clients in Canberra that are doing quite well with the business owners and things like that. And absolutely, you know, they're buying holiday homes in the top end of the Batemans bay area. And you know, and there are things that the, or locals in those communities, if they're doing well, would want as well. And so a lot of people had the money in Canberra definitely goes to that patch, but we've also had an exec in Sydney that can basically control his own diary. That's bought down in Burley and jumped on the plane to Sydney when he needs to, we haven't had clients down to move to Merimbula, but that's right.

Chris Bates: There's these regional airports that still give you that access to the Sydney CBD if you need to, or Melbourne pretty, pretty quickly. And so you thinking that potentially that's the only thing that'll keep, you know, yes, you might say the more cyclical because of the commute, but if they've got an airport, maybe that's the saving grace. If air flights, their plane tickets sort of state affordable,

Matt Knight: The airport seems to be a draw card for a small select group of people and they are cashed up people. So they drive some of those premium property transactions. But I think the volume is more going to be where, like, I don't actually see that that far south coast is going to draw a big pool of young families who, who need to sustain jobs connected to cities, because it is a bit at the remote in and less technology keeps progressing to the point where it's just normal to work from home for a heap of service workers, in which case maybe they can do that.

Matt Knight: But until then, it's really only going to be retirees that drive the volume increase of, of humans in those towns. And that, and that really depends on the right developments and then the right pool of buyers to decide that yeah, you know, the far south coast is lovely to the beaches are pristine. I guess the question mark is, do they like the climate? Is it too cold in winter? That's right. And there are some that move to Coffs and port Macquarie or up towards Byron and because they prefer those warmer winters. And then there are some who, who seem to like the cold and they're moving to the far south coast or the Victorian coast, or even Tasmania because they, they like it, you know, chilly and moody in the winter and they don't mind putting a jacket on.

Chris Bates: Yeah. I mean, that's the thing, isn't that if you're going to further, you guys, South Dakota gets, and so people as a limit on you know, people are willing to go down there as the bushfires had a mental shift as well. I mean, after the floods in Brisbane, people own a bar near the flood zones, but from what I hear everyone's buying the flood zone, you know, as this sort of Bush fires in distant memory now, or are people still conscious that, you know, climate change and these things that will happen again,

Matt Knight: We want to say we're smarter than that, but I just actually have seen a crazy rush towards people building in all of the places where all the houses were burned. And so there's areas that are counterintuitively being gentrified by a whole lot of high-end insurance funded, new building stock. And so where there was a fibro shack is now a 600, $700,000 build. Yeah. I mean, Tathra was just three easy. I think it was, we went down near Merimbula Y camping and, you know, it was just after those fires down there.

Chris Bates: So it's like was 20, 20, but even in 2018 or 2019, there was big fires down there as well. Right. So it's not just a warning warning 10 year event. It's probably more likely every couple of years or even every year,

Matt Knight: It's probably one in 10 on a grand scale in each location because the, the, the actual vegetation takes that long to grow to a standard where it can burn that hot. Yeah. But the, you know, definitely the existence of some bushfire every third or fourth year is, is probably to be expected in any area where there's a great, a great deal of Bush. And we're seeing these, these hottest summers

Veronica Morgan: And we have such short memories

Matt Knight: We really do in the same vein. If you go to a property dumper, oh, look, the most recent kind of mistakes or, or problems that I've certainly had people sign on. And I've tried to be as brutally honest as I can, about what they can have for a certain budget. And they've come on and said, yes, yes, yes. And then they're still expected to buy something 30% under what those figures are. And so people who think they're moving to the south coast and buying an acreage on the fringe of Milton, getting five acres and a perfect cottage, looking over rolling grain, dairy country, into the ocean with a, with a water view, if possible. But I want to be two minutes from the best cup of coffee I've ever had in my life. And I think I can have that for 600,000

Veronica Morgan: And I don't want my view being built out. Yeah,

Matt Knight: Yeah, yeah. That's exactly right. So there's still an element of that. And I'll have had a couple of people engage the service for auctions, and I've tried to warn people what's happening in the market. I was at an auction in Doris on Saturday, which is a little surf beach Hamlet in between Ulladulla and Bateman's bay. Yeah. And the clients specifically said, we do not want you to tell us, you know, what it's worth or organize a building report or tell us why we should, or shouldn't be buying it. We know everything. We just want you to go and put your finger in the air because it's a lockdown and we can't leave. That was literally the brief. And I did it even, even then I told them you better have a million dollars because I think this thing's sales selling in the nines. And they had, they gave me a max bid of eight 30. There were, there were Audis and Mercedes everywhere at this auction. And yeah, they worked, they were outbid by 150 K and it sold in the mid nights. So people still, still seem to think that some houses should sell for last year's prices or three years ago is prices and are optimistically ignorant in some ways.

Veronica Morgan: It's so funny. It's just like, well, you're ruining my fun. You know, like, I'm sorry, but I've finally decided that I want to do the soreness where everyone else to clear out of the ways I can get what I want for my price that I want to pay is also

Chris Bates: That, that fear of meeting the market. Right? And you're worried about whether it's sustainable, et cetera. And people try to second, guess it, you know, putting their view on the market, on the market and hope the market then meets their view. But the reality is that you've got to meet with the market he's in. So that's a cracking property and that's what the market is paying today. You've got to come to that realization pretty quick because the market doesn't stop. You know, if you wait three, six months to figure out that the market's higher than you expect, then you know that nines, it could be 1.1, right. And you've completely missed that opportunity. And so it's that, that fear of meeting the market is quite dangerous because that could also completely go out of grasp. It could have been in their budget at nine 80, but now it's 1.1.

Matt Knight: Well, they're not even possible. And that they've just missed the boat by not willing to sort of meet the market well, and that's honestly, I try and I try and explore both of those scenarios with a client. And I say, look, you know, do you still want to win when I'm first taking a client on, because I don't want to take someone on if they only believe the market will go up. So I want to say, well, let's, let's, let's imagine that next month, this market peaks out. And then there's no growth for the next three years. Are you still happy that you bought something? And then on the flip side of that, let's imagine that you didn't buy and prices jump another 15% like they did in the last six months. You know, are you okay being out of that market? So those hypothetical scenarios it's really tricky for, for, for us to know Veronica, I guess I'm saying as, as sort of buyer's agents, how to help people unpack those future scenarios and then help how to help people work through their feelings about that, to then arrive at a decision of, I'm happy to buy this property for this much money and I'll take full responsibility for what happens next.

Matt Knight: Like to me, that's a, it needs a big challenge and people are all trying to second guess things. And I'm most comfortable when a client says, we actually we're buying this for us, or we're buying this for the long-term and we don't care what happens next year. That's the best position to be in. I think as a buyer,

Veronica Morgan: A hundred percent agree because, you know, and it's like the process that we take our clients through in working out what their maximum, you know, their walk-away prices. We're not sitting there trying to predict the market. You know, it, that's irrelevant. We're actually focusing on your requirements, your needs, this property, how this property sits in the marketplace, what the marketplace right now is dictating. It's probably going to sell for, you need to have in order to buy it. If you want to buy it, you know how far you should push yourself based on a bunch of research that we've done it. We're not sitting there saying, you know, you're buying this because you think it's going to be up 20% in six months, you know, w we're not doing that. That's not part of the conversation. No, because yeah, we fully believe people should be buying for the long term.

Veronica Morgan: It's just ridiculous to be buying property and knee jerking around. But, you know, I have to say that I did some research on properties that had sold within 12 to 18 month period of being purchased in a market, you know? And you just think what on earth has changed? And it's, it was quite a lot of properties without trying too hard. I found 50 properties in Sydney and I wasn't really digging too hard. Right. And there are plenty more that I didn't even cover in this research. And I just think there's that many people that have made a mistake by buying something that they really didn't need within 12 to 18 month. And then we're put in a situation where they had to sell in a falling market. So, so I think that long-term focus is really, really,

Chris Bates: Yeah. I mean, it could be the wrong property that they bought, or it could be, you know, personal situations like divorces and breakups are quite common out there. So that caused a lot of people to, to flip houses in short timeframes. So, but you're right. Look, I think at Heights of market, when there's that frenzy in that FOMO, you get either people were willing to sit on the sidelines or people were just going and buying, you know, out of desperation. And neither, I think it's a good option. I think you just, what we're noticing is a lot of people are saying, well, always second guessing the market, whether it's 20 17, 20 18, 20, 19, 20, 20 this year. And what they don't do though, is they don't keep active in the market. So they completely give up and they switch off the apps and even going to any options or looking at viewings.

Chris Bates: I don't think that's a good option if ultimately you really want to enter the market or do an upgrade, but also they don't get their finance ready. They just, they don't know exactly what their maximum is that I know if they, how their self-employed income is going to affect things, they don't know if they sold that property, how that would change things. And you gotta be super up to speed with your current situation, with finance plus to stay in contact with the market. Because if that perfect property comes on, which may only be a few times a year, if you're not watching it, then even when you do want to enter, you could be waiting three, six months, and then you miss out on that one. And so you can't just magically make it happen when you want to get it on your timeline. Yeah.

Matt Knight: And I think that's, that's a good point. And certainly knowing what you can afford, I think is just like so important for anyone with any brief, because I've seen so many people come across her in the last 12 months on that particular issue. They don't know what they can afford. They've come in too low and they've completely missed all the stock that they really wanted. And then three months later they've gone, oh, we found another $200,000 and we can buy a property now, but we even, maybe didn't get a property as good as what we would have if we'd started with that budget. Yeah. So getting your finance right is critical, absolutely critical. And then working out what are the real deal breakers, because if it's all about that one location, you can actually fix houses, right? Like you can renovate, you can rebuild. There are things that are fixable and changeable in a piece of real estate.

Matt Knight: And then there are things that are absolutely not changeable and the location is one of them. So you should really try and work out what are your deal breakers? Because it shouldn't probably be the color of the tiles in the bathroom.

Chris Bates: Awesome. Natty on that really appreciate, it's a really interesting conversation that like people move into the regions is going to keep on shifting some emotion to say what happens in the next 12, 18 months, whether they lose a bit of steam, if the top pancakes going, or if the middle and say, bottom end of the markets gets a lot of that affordability driver. The people that, you know, say the sub 1 million market, if that's still kicks on, because a lot of people look at it comparable to Sydney, but with a lot potentially different or better lifestyle.

Matt Knight: So thanks for coming on you and me both. I'm super interested to see what happens next. And it'll be, it'll be fun to talk again in a year or so.

Chris Bates: We want to make you a better elephant rider. And this week's elephant rider training is

Veronica Morgan: Let's have a quick discussion about lockdowns. Now we are recording this in Sydney. When we are in lockdown, Melbourne's had four lockdowns since the beginning of COVID potentially there'll be a few more until we can get enough as vaccinated. But interestingly enough, there's, there's all these assumptions that people go into a lockdown with. And I know the first time around everyone went into lockdown thinking the, you know, property, market's going to fall off a cliff and doom and gloom, right. And you know, I had some clients that had to go on hold because of the industries that they are in and had a number of others that sort of suddenly haunches for a little bit. And then others went, you know what? Life goes on. I still need a home, et cetera, et cetera. And so we started then borrowing property and moving through that lockdown.

Veronica Morgan: And those people were well-rewarded for their faith and just being pragmatic because let's face it. The market is, you know, had unprecedented growth ever since. So you know that first lockdown entering that with all your preconceptions and basically Millie, everyone was wrong. Then we go into this lockdown and obviously Melbourne's had its various lockdowns and we're going to this lockdown. And almost immediately, what I see is complete opposite. I see buyers thinking, oh my God, if this lockdown goes any further, there's going to be a shortage of stock. I'm got money burning a hole in my pocket. I might've sold. I might have whatever I've done. I need to buy an, I need to buy. Now some of the offers that I've been seeing on properties that are on the market have been, they've gone right to top shelf immediately. It's phenomenal. It's and I've been blown away and we're only sort of waking a bit into it.

Veronica Morgan: And I'm saying to clients, look, this is, this is very frenzied. This is FOMO on steroids now. And what are these people thinking that we're never going to have another property come on the market? I don't know, but it's this it's amazing. It's like the toilet rolls coming off the shelves, you know, are we all really living with this, this low level of anxiety that, that when something happens like this, where it just dials up to 12, you know, so I guess my, you know, my take on this lockdown is, you know, is good for business in many regards. But it really is a short term thing. And we should not be making long-term decisions, knee jerking, because all of a sudden we've, we're locked in and we make a call of what may or may not happen in the property market in the next weeks or months. We have to think. Long-Term

Chris Bates: Yeah, I think I've walked down is actually when people get their life admin in order, and we've seen a massive number of people who have sent loan documents, you know, is what we need to get you moving, you know, weeks and months ago. And all of a sudden they come out of the woodwork and say, yep, we're ready to get going now. And so I think that's, what's potentially happens in lockdown trait mode, buyer demand, and potentially also in winter as well. People started saying, look you know, we, we want to do an upgrade or we really want to enter, and we want to get prepared for sort of the spring. And I think a lot of anxieties, you know, the, over the Christmas period, the Sydney market and the Melbourne to a certain extent took a huge jump right over that period because you had low listings over Christmas and then huge increase in demand and potentially a 10% jump over that sort of three months. And I think the worry is that that could happen again. And so, you know, have some of your clients that people, I just need to secure something I don't want to get to spring and not have anything can be still in the market in three, six months time. Because listings probably are starting to drop off. Are you saying that Veronica in terms of new listings are starting to really wane at this time of year? Or are you surprising

Veronica Morgan: You a bit? Okay, so we're recording this in July, so it's the middle of winter and normally listings will slow down through winter anyway. And so normally, yeah, you do have a bit more competition on property in winter for that very reason. So that's however, our June was a busiest. You never know. So there was actually more stock on the, you know, and, and when I say more stock on, you know, I got a caveat that by saying good stock, right? Because it can often be a lot of stock and it's garbage. So when I, when I look at June, I think w we were very busy with quite a lot of very good properties coming on the market. So it's good because it suits our client's requirements, but also good because it's a good caliber of property. And so that's a little loud out of season and unusual.

Veronica Morgan: So I think in this sort of COVID world, you know, we can't necessarily rely on typical patterns. And so I think w the buyer, the agents that I'm talking to at the moment, they're saying that, you know, like there's not a lot of fear amongst owners in terms of whether they're going to get their price or not. And there's a lot less fear around or uncertainty around the online auction space. I tell you what, as a buyer, I do not like online auctions. And if you have any doubt as to why then go back and listen to Arab. So with Damien Cooley, it was released in probably a year ago, maybe in August, August, September, last year we released we talked about online auctions with Damien. And so, you know, there's that sort of fear of, I won't get my price. If I do it online, there isn't that a lot of agents like, you know, I've got no problems going online.

Veronica Morgan: We went online and looked at this price. We got this amazing price. So it is very different. The reaction to the online auctions now. But I do think because of the open house, so that's not the issue with people listing their property. Now, the issue with people listing their property right now is the efficiencies of getting the maximum amount of people through to inspect agents. The legislation in new south Wales is that when new south Wales is that only one person can go through the inspection at a time. Now it's actually ridiculous because that means a household full of people. So mom, dad, two kids in the car together, living in the same household, drive to the property together, but can only go and inspect it one at a time. So that's a bit really ridiculous, right? So I think there's a slight oversight in the legislation.

Veronica Morgan: One group on household group at a time it'd be more appropriate. So when you, I'm talking to agents the same, they're at open houses for four hours because they're lining up five and 10 minute inspections for people. And if you've got four, people need to see it. That's, you know, 20 or 20 minute inspection. And then somebody runs lights, as on, sorry, I'm running a bit late on. So you'd lost your five minute time slot. The actual efficiencies of getting the most amount of buyers through a property is nuts. And the agents are really already over it, right? So they are going to discourage people from listing. And it's because of that, not because there's fear in the marketplace. So that's going to result in a bit of pent up supply for sure. But what you're saying, Chris is that a lot of people are actually getting their finance applications in, in this time. So there's potentially some more fresh demand at the market as well. And so it does sound a little bit like the January late January, February property market may kick off all over again. Once we're at lockdown,