Billboards, Trust Accounts and 588 Empty Homes

Episode 14 open: Peter back from leave, Kasey on a flat Sydney market

Kasey McDonald (00:08) Welcome to Before the Weekend and we're up to episode fourteen on this fabulous Friday. Good morning to my co-host Pete. How are we today?

Peter Schravemade (00:19) Yeah, living the dream. I was off on annual leave this week, so I I'm feeling rather refreshed and ready to get back into it. Are you

Kasey McDonald (00:27) Amazing?

Peter Schravemade (00:28) you know the hangover that you get after you've been on holidays where you get back and there's like a million emails? That's where I am right now. Yeah. Pretty much.

Kasey McDonald (00:31) Yes. Right. You're in that, huh? I spent the week in Sydney actually, you know, kind of out seeing customers at events. So yeah, a great, a great week for me. But I think definitely what we're hearing, or probably reading in the media around kind of that slowness in market. I definitely feel in certain locations of Sydney, many of the agents are following that sentiment. They're feeling it. They're kind of now looking at how do we get back to basics. I think Tim Lawless mentioned it in one of our first ever episodes around that, you know, this type of market, you know, you've you've got to know how to negotiate and you've got to know how to be that true real estate agent. So yes, they're all they're all very much thinking that. So it was kind of great though, like to to hear and see some of their own feedback while on the ground.

Peter Schravemade (1:33) Yeah. So market feedback from agents is that it's pretty flat out there.

Kasey McDonald (1:37) Yes, absolutely. Definitely, definitely flat. But a lot to unpack this week. I guess we'll get straight into probably story one. A bit of a kind of different marketing plot in terms of a billboard that we've seen in the eastern suburbs of Brisbane here.

Wynnum agent's 'we chose David because we hated him the least' billboard

Peter Schravemade (1:56) Yeah, have you seen this? Did you see it on the news? It was covered pretty prolifically from the domestic news. I think largely because of the nature of it. But for those of the the listeners or viewers, if you're watching us on YouTube who haven't seen it, there's a billboard, an agent, I think he's out of Wynnum, the Wynnum area in Brisbane. And he's been using unusual tactics. I mean, l look you using social media tactics. Or some kind of unusual tactics is not unusual for real estate agents. Every single one of them is trying to, you know, get the next thing that that creates a bit of interest. But I think one of the reasons why this has gone forward is the foun it's a founding principle has been using self-deprecating humour, which is very, very great. I l I actually it's my go to is self-deprecating humour.

Peter Schravemade (2:46) If you don't know what that is, that's not taking the piss out of somebody else, although I do do that on regular occasions and I I'm sure you know about that, Kasey. But self-deprecating is the ability to laugh at yourself to go, like, you know, I'm an idiot because of this. And then but you know, the example of of this one is that this particular principal from Wynnum put up a billboard that says we chose David because we hated him the least, which is which is pretty funny. In a market where real estate agents are on the nose. And like just to compound this, to compound this in my local social Facebook group, one of the real estate agents used a fairly prominent large franchise tactic of writing on a handwritten piece of paper to the homeowner, please give me a call, James, and a phone number.

Peter Schravemade (3:39) And, you know, just on a it was just handwritten on a piece of paper into a letterbox. I've seen this done many, many times over the years before it went wild on social media, people shouting it out as being a grubby tactic. Deceptive, not telling them why you're calling. They might think that their cat got run over or anyway, it that went nuts. But the general consensus out of that, the point I'm trying to make, is that people just frig friggin' hate real estate agents right now. Like it was such vitriol for such a small, you know, misdemeanour. And it, you know, he was on there. He actually went to apologise before the post was taken down by the admins. But people hate real estate agents. This guy has just thought he'd put it out there and go, We were hated the least. We were the best of the the idiots. And that I'd like yeah. Yeah.

Kasey McDonald (4:25) Best of the bunch, whatever presented themselves. Yeah. Yeah.

Peter Schravemade (4:29) So I like I get it. I I found obviously the review he put up there is not real. He he actually is up front about that. I think this guy, I haven't met him, but he's a bloke from Britain. He's come over. He used to be a former police officer, from what I understand, and now he's running fairly successful real estate agent, from what I understand. So, well, what are your thoughts?

Kasey McDonald (4:50) Yeah, look, I think in life's can be always too serious, right? Like you and I well, you more than I have a little banter at each other. I think you definitely have cracks at me more often than none. But but in saying that I

Peter Schravemade (5:04) I'm not sure about that.

Kasey McDonald (5:05) don't know, in saying that though, I think look, you know, a little bit of humour and laughing at yourself is actually okay. But I think it's not, you know, to to to this particular point. He hasn't done it. This is not the first time that he's actually done this. He's done a he's done another billboard. I think it read, call the agent who's next to the bins in the car park by the train line. So I I don't know where that kind of one was going. But you know, I certainly found a little humour in the one that was just presented. But I think as you

Peter Schravemade (5:38) I think he's implying he's a drug dealer in that one, but I d I don't

Kasey McDonald (5:41) maybe, potentially, maybe. Yeah, maybe. But I think, you know, we all or everyone in real estate tries to find what is that new kind of marketing plot? What what's a new way, a new avenue? How can I get people's attention? And I think we saw another one of those this week, right? The fake theft that came out. Yeah, I that was that was from Melbourne, I believe. Yep. Mm-hmm.

The fake open-home theft stunt in south-east Melbourne

Peter Schravemade (6:07) Yep. South-east Melbourne. Yep. Tell do you d did you see it? Tell me about it.

Kasey McDonald (6:11) Yeah, so I saw the post and obviously, you know, came up through, you know, Instagram, that it was this, you know, photo of this beautiful blonde woman and it says urgent help needed. Jessica Thompson, you stole from our home. So this fo phot photo of the female kind of right saying that she stole from the home, right? Yep. Mm-hmm.

Peter Schravemade (6:27) Well, just just pause pause Yeah, but just pause on that. We see that type of post all the time in social media groups. Does anyone recognise these cretins who stole from our yard, right? So we see that and she's preyed on that so go on.

Kasey McDonald (6:48) Mm-hmm. Yes. So then they've utilised that imagery that we always see. And everyone then pays attention to that. Right. And they've done that. And through the imagery and the videos that they've used, what it's actually meant is that a marketing plot has worked because it got eyeballs on it. You and I are now talking about it. And so are many others who sent me also their image saying, my God, look at this. And it was actually just a marketing of that property. And and the agent has come out publicly to say that it was all done on purpose. Nobody sold from the home. It was just absolutely that marketing angle of how am I going to get eyeballs on this? I need to sell this home and I need people to be able to see the imagery and look through the imagery.

Peter Schravemade (7:38) Well, I'm gonna give you another point of view. And I think this is on both of them. So well, largely on the first one, I found that funny. And I I like the fact that my response was humour. So I'm I'm like, okay, lighthearted joke. He's taking the piss out of himself. Fantastic. Yeah,

Kasey McDonald (7:53) Hundred percent. Yeah.

Peter Schravemade (7:55) all play to you. This second one, that was not the case. I did look at it. I looked at it before it was sent to me by anyone. I looked at it and I switched off after I realised in the second slide that I'd been catfished and this person hadn't stolen from the open home. Firstly, I was looking at it from a Before the Weekend angle. If someone stole from an open home, where you post it is not on social media. So I was looking at that going, is this a stupid agent? Or, you know, like, is this a story on a stupid agent? Or is this someone who's actually stolen from the open home? And that that would have been sensational. And then when they went on to describe the first view as being spanning living interiors and they put the real estate speak in there, I switched off.

Peter Schravemade (8:36) I was like, okay. She's used that as a stunt. So you like this the thing with all of these, and I'm not just highlighting the the second one in particular. I take I I take umbrage to it because I think people walk away thinking, yeah, I've eyeballed it, but I'm not gonna call now. Like you you made me feel dumb, you've made me feel stupid, off you've you've catfished me on something. So we're starting from a deficit of trust. And this agent exacerbates that to get hits, to get clicks. The end result is you gotta sell a house, right? So if if most of the people are walking away with a negative experience from there, do you think that they're calling that agent to buy that house? And the reality is, I think most people look at it going, well, that's a cool pony trick.

Peter Schravemade (9:29) But does it actually translate to views for the house? And like I've seen this before hundreds of times, like so many. So many times where there's it's clickbait, but is that clickbait actually turning to return on investment? And you know, the strange thing about all of this is like getting all of those views is great, but I never see on the tail end of that, I never see somebody going, you know what? I got I think she said half a million views, and as a result of that, I think we got 15 extra offers, and therefore the house is sold at a higher price. I don't hear that secondary bit. So any kind of marketing is not good marketing. The person who said all press is good press is is incorrect. It depends on what what what that person walks away with. And and I I think in a you know, the first one, the guy was p preying on the deficit of of trust or the the fact that we, you know, we have a low reputation as agents.

Clickbait vs return on investment: half a million views, but did it sell?

Peter Schravemade (10:28) He was laughing about that in a self-deprecating way. I think most people looked at that and thought it was funny. I reckon he's going to get calls because of that. People are going to go, hey, agent who I hate the least, come and appraise my house. You know, like I can absolutely see that happening. I can see the majority of people turning off on this one going, I've been catfished. Another real estate agent deceiving me about. I don't know. I don't know. That's that's the way I look at it.

Kasey McDonald (10:52) Well, that that they were the types of messages that I was getting, flooding my messenger of like, look at this, like what a bit of a turkey to kind of think that this is a great kind of marketing idea to do, especially when there's so much now out there about the misconduct and and the lack of trust that the consumer has in us as agents. So you're 100% right, like no one said anything positive about the second one, but everyone did that I have spoken to. Including actually someone locally in that area who's a real estate agent, actually thought it was really funny, drove past and said, I'd actually call off that billboard. So it was, you know, there definitely was humour in the first one, but there wasn't there

Peter Schravemade (11:32) Yeah. So so different.

Kasey McDonald (11:35) was a borderline, I think, of the second one.

Peter Schravemade (11:38) So different. And it's the response. It's the response that the humour invokes. You know how when you hear a really dark joke that you shouldn't be laughing at, but it's pretty funny. And we shouldn't be laughing at it because we're politically correct and whatever else. But what's the intention of the humour at the back end? And and like hers was to get clicks. His was taking the piss out of himself and and getting calls from it. And I think I think yeah, it's a great example for r if you're an emerging real estate agent, I think if you were going to follow one. There's you know, there's there's been edgy. Yeah. I I actually think I I've always been on the line of edgy as far as marketing's been concerned. A lot of my marketing ideas, you know, that not all of them land. And I'll I'll give that to to people, to the person, especially in the second one. She might have tried a marketing plan and maybe it's landed, maybe it hasn't. Maybe all the on unwanted attention. Like, can you even imagine responding to the comments on that? You'd have to hire a person to do that. So I I don't I don't

Kasey McDonald (12:37) All right. Yeah.

Peter Schravemade (12:39) I don't know, it's covered. But we should move on. Let's go to story three. And this is this is one from yesterday. I don't know, I'm a bit fatigued by the Office of Fair Trading, Consumer Affairs Victoria, Office of Fair Trading Queensland, all of them coming out. But the New South Wales government published results of a statewide intelligence-led intelligence. I love the way they're putting this for.

NSW trust account operation: $200,000 in fines and 34 businesses on notice

Kasey McDonald (12:58) Mm-hmm. Intelligence-led, yeah.

Peter Schravemade (13:00) Intelligence-led operation targeting agencies at higher risk of failing trust account obligations. Now, trust account obligations in every state that I have seen are they regarded as the most heinous of crimes. They are the ones that are, you know, that penalise this is where jail sentences are handed out. So what what they came out with was more than two hundred thousand dollars in fines, thirty-four businesses on notice. You're facing potential licence suspension. I doubt it. I I think a lot of those notices will be you know, there's been a trust accounting, a minor transaction that is explainable or this is, you know, something that we can figure out. Forty one overdue audits. Well, that might be because of the mountain of paperwork. Thirty two Yeah, that's right. Thirty

Kasey McDonald (13:48) Yeah. That's required during an audit. Yeah.

Peter Schravemade (13:52) two warnings, three industry bans. Well, the industry bans is a good one. So they've obviously found something there. That's that's big. And I would say those three industry bans line up with the $200,000 in fines. They normally go hand in hand. A six mandatory training orders. That's somebody that we we discussed this not long ago. There was a New South Wales guy who didn't realise that he had to operate a general account and a trust account. Do you remember this? As I actually I actually think this is part of part of this.

Kasey McDonald (14:23) Part of that is they'll they'll rolled all I think a lot of those yeah into one. Yeah.

Peter Schravemade (14:25) They've rolled it all in together to say we're doing something. But it's interesting because who of who this has come from. So the Minister for Better Regulation and Fair Trading, Anoulack Chanthivong, I think is his name, Chanthivong. This is the same guy that that Tim McKibbin came out and said he needs to resign. And he needs to resign because we have no dialogue. The industry has no dialogue with this guy. He has released. 488 pieces of new regulation this year. And he is arguing, Tim was arguing that he has in in effect created an unsafe workplace for property managers in particular, who cannot keep up with 488 new pieces of regulation. And every time he does it, he doesn't control consult the industry to to go, this is what's happening. So very, very interesting that that guy didn't respond to the rec the calls for him to to resign, but has stepped out going, you know what, we've pulled out a big smacking stick and this is what we've done to the industry. What kind of message is that sending to you, Kasey?

Minister Anoulack Chanthivong, Tim McKibbin and 488 new regulations

Kasey McDonald (15:31) Yeah, I just I don't know, like this government just seems to be heavy handed, right? Like it it doesn't matter what it is. It's again, I kind of look at this as okay, yes, as as the real estate agent, we have to do these things, we have to do the audits. It could be that we have legitimately made a mistake, as you mentioned. So yes, okay, we might need to undergo some additional training. And some things might have changed that has meant for that mistake to happen. But I think without, you know, he's coming out heavy-handed and doing this and making this incredible strong enforcement action and throwing his weight around, but won't actually sit down and look at all of those 486 changes that have been made to legislation. More importantly, consulted with the people in the industry, working in the industry, who can then understand how to roll them out, what's how to best implement them, whether or not they're even the right things to be adding.

Kasey McDonald (16:28) Within to the legislation. So I feel like I feel like we've just got a government sitting back making rules, however they feel it is, or the or people, right? Like these are people. And just trying to throw their weight around with no kind of understanding, but no intent to even understand, I think is the key here. And it's been proven because he just won't even sit down with Tim and talk through any of this to kind of say, how do we actually make this work?

Peter Schravemade (16:57) You know, sometimes I wonder when I see these things whether it would be better if we had a union. You know, I I'm not a fan of unions and largely because of the amount of corruption that has has has emanated from that area. But you know, when you speak to people like the teachers union, for example, or in the universities, they swear by the unions. They say they protect their jobs and do a bunch of other things. And I'm not saying that the Office of Fair Trading isn't is not they they they do it sorry, the offer. I'm not saying the Real Estate of Institute the Real Estate Institute of New South Wales do not do a good job. They they certainly do. They advocate on behalf of but you know, I'm wondering whether we rebranded that to a union and started s throwing some political money at at lobbying against these guys, whether all of a sudden we'd get a bit more interest. Yeah, but the it's just curious.

Peter Schravemade (17:50) In any other industry, if like if this was to happen in education, if I was a teacher. And somebody did this to the teaching industry, the unions would be out in arms, we'd be seeing strikes. You know, I've never seen a real estate agent strike yet, because that meant that means that they're not getting paid. But just the inequity between the ability for old mate to come out and do this while not having a dialogue, while not consulting the industry is yeah, it's it's quite incredible. It's a bit of ib i quite dazzling to be honest.

Kasey McDonald (18:26) Yeah, definitely. Yeah, it's yeah, look, you know, I I don't really know what my take is on it. I think our REIs are there and they're doing absolutely an amazing job. They're really trying to advocate and be the voice, you know, for for us within the industry. But, you know, I also appreciate that it's difficult for them because they've got a government who clearly is not listening. But more importantly, doesn't want to listen, I think, is the key here. So yeah, I think anyway, we'd let let's move on to our to our next story, I think. What what do we got next on

Peter Schravemade (19:01) Yeah, yeah, yeah. So

Kasey McDonald (19:02) the list?

Deposit flicking explained: who keeps the interest on trust money

Peter Schravemade (19:03) well, so last week we raised the the concept of def deposit flicking. And if you didn't hear episode thirteen, deposit flicking is when i it in most standard transactions you've got a seller and you've got a buyer, and they will agree to put any kind of deposit that's related to the transaction, normally from the buyer to the seller in into a trust account. And that trust account can can be at the r real estate agents, it can be at the solicitors, which is rarely the case. Normally it's held by the real estate agent. And the common industry theme is that we want to hold it to protect our commission in the case that it goes through. If it's with the solicitors, we then have to go back and fight for that. But the the concept of tr of money held in trust is that it's held until any kind of dispute is resolved before it's taken and used, and then you have to fight to get it back, right?

Peter Schravemade (19:54) That's the the concept, and that's why in that previous thing. Money's being held in trust is viewed as such a s a sanctimonious area because that's normally where real estate agents go wrong. They do the wrong thing by misappropriating trust trust funds. Well, deposit flicking is the practice of storing it somewhere else. And and one of the largest reasons that it would be stored somewhere else is because of the interest accrued in it. So if you think about not not just standard houses, which might be 60 to 90 days or 30 to 90 days in settlement, and that money sits there for three months and accrues interest. When you look at developments which can go on for three to four years, money sitting in there, like let's say that's a 10% deposit that's sitting in there or 20% deposit sometimes, that is a lot of money that goes in there.

Peter Schravemade (20:48) And typically, who who who claims that interest is the is the question. A lot of the development contracts have you know, allowance for that, but it's still not the full value of of the money that goes there. And so it's been interesting. A business model was put to me not long ago about deposit flicking. Like, why don't we start a company where we agree to hold these deposits? And b believe me, it's not just as easy as that. There's a lot behind that concept. You know, firstly, all of the financial obligations you've basically need to be one step short of a bank in order to do that. But let's set up an account where we can hold it. We're gonna take that interest ourselves and we, you know, we just get the parties to agree that it's held there. Now what happened is Jared Zak of Dott & Crossitt, which is a legal firm, ha had come out and said they don't like the practice and they believe it's unlawful.

Agency Settlements v Jared Zak: what the Supreme Court actually said

Peter Schravemade (21:50) And the the person that was doing this Agency Settlements is called a law firm by owned by Riverstone Partners. They they tried to, I guess, I don't know whether it was an injunction, but they took action against Jared Zak of Dott & Crossitt, saying that you you know, you're not allowed to say that. You you you basically I think they said that you're not defaming me, but they put an injunction because they said, Look, you can't say it's unlawful. And the judgment came out this week and said that there are many voices in in in the debate and very little is to be gained by silencing just one of these voices. So the the the the judge actually said, look, there is a debate going on about this, and it would be stupid to say one side cannot say this about the other, because there hasn't been a you know response.

Peter Schravemade (22:41) They it did actually say in the settlement that Agency Settlements has demonstrated a good arguable case that Mr Zak has contravened the Australian Consumer Law. But the judge said that he did not consider that to be the balance of convenience favours the grant of interim relief. So he's not off the hook yet. He's just saying that there is a debate going on about this. It hasn't been tested, hasn't been tested legally. We don't have regulation for it. So I think this is still out there. And interestingly, Tim McKibbin of the REINSW came out this week. He said, Right now we're in the dark and we don't know whether something's compliant or not. And his position is to be cautious. And and that's where I think it would be. But here is where I think it all boil boils down to. So I might have lost you with all of the all of the terminology.

Peter Schravemade (23:32) But if you're if you're a buyer, Kasey, and I'm a seller, by law, and I think this is where actually Jared Zak's media team reached out to us and and asked if we were interested in having him on the show. And when I responded yesterday, we haven't been able to get him on the show. So that would have been an interesting one to to throw it to him. We just haven't been able to tee it up in time. But I I think my my understanding of it, and I am not a lawyer. I this is just just my layman's understanding of it, is that if you are the buyer and I'm the seller and we agree to put our money in X, whatever X is, we're allowed to do that. It's your if we've both agreed, if both parties have agreed, we're allowed to put it in X.

Peter Schravemade (24:19) And I think that is the argument at the moment. Now, that doesn't mean that everyone should run out there and go, right, we're going to put our money in a in a in a bank. There's a reason that trust accounts have existed for so long and have been, you know, the Office of Fair Trading view them as being so serious when when people breach that because that money should be held in trust. So wherever X is and wherever you're putting it. Needs to be pretty ironclad that if there's a dispute amongst the parties, and we all know that disputes arise out of anything, you know, like found termites at the property after settlement or whatever, then you need that trust account to to back up your claim or your argument, etc. So, you know, where where I sit is I I personally think that regulation will come in and out out out ride this practice and say, no, it must be held in trust, a prescribed trust account, and this is what that looks like.

Peter Schravemade (25:20) Because I I I think, and again, I I don't know for sure, but I think the interest from the money held in those trust accounts actually goes to mediating a lot of the disputes that go on in the real estate industry. But we'll follow that one down. It's an interesting one. It feels to me as though a tech company as a conveyancing company has found a loophole where they can claim the interest rather than it go to federal sources. And I think you will see that loophole close pretty quickly. But then there's been a stash between the conveyancers, one saying I don't think it's lawful. And I've just got the money through at the moment. So Property Services Statutory Interest Account has 180.5 million received in the financial year 23 to 24 with an account balance of 315 million. So this is not small bickies.

Peter Schravemade (26:15) The account nationally backstops the Property Services Compensation Fund, which pays out when an agency steals trust account money. So that's where that interest goes to. It actually backstops our industry. And yeah, it's as to whether people can put it where they want with an agreement. I still think that they're that might be the case, but I don't think it's going to be there. And I will throw just as a closer on this, I'll throw you back to Tim's point, which I think we're in the dark and we don't know whether something's compliant. And his position is to be cautious. I think they're very sage, wise words, do you think?

Kasey McDonald (26:50) Yes, absolutely. I think look, the consumer's got really no idea what's going on, but at the end of the day, they pay to assume that that's going to be somewhere safe and it, you know, and they can agree that it can go to wherever that safe place is. You know, but I just think that we're actually having a very, you know, a technical argument or a debate over something that's just a really simple promise of to what we make. We're going to receive it and we're going to hold it in trust. And now we're kind of debating about whether or not that actually happens. So yeah, I think yeah.

Peter Schravemade (27:23) Yeah, and and whether you would like to earn interest off the money that's in an account or not, the one thing that you want to do is get your deposit back if things go bad. So you know,

Kasey McDonald (27:27) Money or not, yes. Yeah. Yeah. Hundred percent. Yeah.

Peter Schravemade (27:33) one should well and truly outweigh the other. But you know, what do I know? Let's I do I do. I I come from central well,

Kasey McDonald (27:35) Yeah, definitely. I don't know, you might know about this one, the termite bill. You do know about the termite bill.

A $32,000 termite bill and the Victorian Section 32 disclosure

Peter Schravemade (27:45) I come from central Queensland. I know a thing or two about termites. Like we

Kasey McDonald (27:47) Too much. Yeah.

Peter Schravemade (27:49) It was almost at the stage where we had to start training agents to identify early warning signs or things that were evidence of termites. And I mean, train as in above what you'll hear a lot of old older real estate agents go, I can spot termites a mile away. The reality is you can't. They they can eat out at a whole house and you wouldn't know what's there. But you know, we we actually did training on this. Our our principal at the time said it was so serious in one particular area of the farming area that we operated in that they actually took us to a house and showed us how concealed it could be and to look for some things. Like in one of these houses, the wall, the drywall, the Gyprock, would actually move when you pushed it. And that was because all of the the termites had eaten out the inside of that. So we actually went to an affected property and we had a look at. Walls that weren't affected and those that were and look for for warning signs entering, leaving the property, all of those kind of things. But the with this story, you want to set it up? What are we talking about?

Kasey McDonald (28:52) Yeah. So building and pest, actually the inspection company posted about a Victorian client who bought their property relying on what is called Section 32 in terms of a building and pest inspection. So the vendor signed the section 32 saying that she knew that there was no termites and answered no to the material facts, right, of that of that statement. After settlement, the neighbour of of that now new buyer, added them to the local Facebook group. And I guess this is a whole thing about what you put on social media, also matters. And she scrolled back and saw that there was a post written by that seller in regards to asking about what to do if there's termites in their property. So what's I think come out of this is that then a statement has been made within that post saying that because the I guess that statement, the that Section 32, that materials facts form was only between the vendor and the agent. Therefore then the vendor in selling it was right in her assump it was right in by her ticking no in that forms. But in fact, you and I both know that that is incorrect. So do you want to talk us through the section of the act, Pete?

Peter Schravemade (30:11) Yeah, well, I mean, I I wouldn't again, this is another area I wouldn't claim to be an expert, but they're they're saying that the the buyer has settled. So Section 32K rescission is gone. That right only runs until the purchaser accepts title and possession. Which is an interesting one. I know in the US when this happens, so these these are called this is called a disclosure effectively.

Kasey McDonald (30:38) Yes, pretty much, yeah.

Peter Schravemade (30:39) The 32K for those who are listening and they're in out of the states, we've got a Form 2 here in Queensland. That's effectively a seller's disclosure saying somebody was murdered on the property last week and the body was over there, and we know about that. And we're disclosing that to you because if you buy the property, you know, the intention is that you you can pull out of that contract. The contract's one thing. In the US, if this had happened. There would be a civil case against the person for making a false statement, which led the person to make a decision. So whilst I do agree with the the the the inspector that came through afterwards and found it was riddled with termites. And honestly, for the videos that I've seen, thirty two thousand dollars worth of damage she got out lightly. This was a fairly small it had a like a wooden floating floor.

Peter Schravemade (31:37) I don't know what the sub sub flooring was. I don't know whether it was on stilts or whether it was brick or whatever, but I could see that it had a a floating wooden floor and then a bit of a gap until the what was underneath it and it was riddled with termites. So she basically lost her living room floor area. They had to gut that and and go and replace it. And yeah the the building inspector said, well that that thirty, he falsely said that the 32K is just between her and the selling agent. That's not correct. It's a disclosure for the period of the contract. And if something's found during that contract, the person can pull out if the disclosure is found to be false. But what happens if they've lied about that and and fur, you know, it's somewhere else? Again, I am not a legal professional, but my understanding is they can go and sue the person.

Peter Schravemade (32:28) And you know, that have to be making decision as to whether that 32K was worth suing for. But it sounds like she's got some pretty strong material facts there that suggest that the per the seller did know about it and has intentionally deceived her into a contract to me that always sits in a civil court. And I'm wondering whether I from last memory, small claims was up to twenty five thousand, wasn't it?

Kasey McDonald (32:54) Yeah, I think so. But I think as well,

Peter Schravemade (32:55) I yeah.

Kasey McDonald (32:56) just even in from a Victoria standpoint, I she'd be probably waiting for a long time for the this to even be heard.

Peter Schravemade (33:04) Yeah, well maybe if she went to VCAT, but she might just go straight through the courts. Like honestly, I I think i I'd be serving legal notice if it was me. Again, no not a lawyer, but I'd be serving notice saying I I'm very interested in hearing your side of the argument and why this bill shouldn't be on you. Feel like you've deceived me in a contract. I mean, you can't you you shouldn't be able to do that. And that's exactly what the section thirty two was there. So you know, like I d I actually don't think this one's on agents. But the one thing that does come out of it is if you're a purchaser and you're looking at a property, you need to absolutely do your own independent building pest and or or here's the other thing is the vendor refused an independent building and pest inspection.

Peter Schravemade (33:50) Now, as a purchaser, that's a big red flag to me. If a if a purchaser says I'm not gonna I'm not gonna let you, I'm not gonna allow you to send through an independent building and pest inspector. That's a big red flag. But this person has purchased it, they've got it. Yeah, they've found the problem. To me, it looks like a civil case now that sits outside of the 32K. But it I wasn't aware that the 32K only existed for the contract, but I suppose once title's issued, then it becomes another the issue of another another court, right?

Kasey McDonald (34:23) Yeah, absolutely. Yeah, and I guess, you know, you make a good point. I think in one of our earlier episodes we had, you know, something similar where there was a sale that went through and

Peter Schravemade (34:31) Yeah, I remember that.

Kasey McDonald (34:32) you know, you know, there was those the the buyers, it was on, you know, national TV as well in terms of that, you know, these things weren't disclosed and now they're having to ful you know, the bill, I think theirs was onwards of over a hundred thousand. But you know, what came out of that, of course, is that you need to go and get your building and pest report. Now appreciate that this vendor said, no, I don't want that to happen, but that is absolutely a red flag for buyers out there. And I think I saw something as well, just to quickly add on to the end of this, is something popped up in my social feed and we were chatting about it in in a couple of episodes only just recently around the the body corporates and when you're buying through the strata titles about reading.

Strata buyers: ask for 12 months of body corporate meeting minutes

Kasey McDonald (35:15) Reading things and there's and there's a gentleman that has just come out actually who's bought and he's made a a ver a a video on social to ex to this same extent of saying, you know, that when you are buying in strata, don't just say, can I have the I guess a copy of what maybe I'm going to have to pay and what's included in that. He went to the get your meeting notes, asked for them for the last 12 months. Read them, actually understand them, you have got a right to ask for them. So I think it's yeah, there's kind of those two stories we've, you know, previously covered that kind of brings back to where does the responsibility lie? And unfortunately as a buyer, but in this case I don't believe there was an agent involved. I do believe this happened between vendor and purchaser independently. Is that right? There was an agent. Okay.

Peter Schravemade (36:00) No, there was there was an agent for her to be filling at it. Yeah, there was an agent. But it interestingly in this instance they haven't pointed the finger at the agent because the agent's pointed to the form and gone this is a great example of actually where that 32K has got them out of trouble. Because the agent's gone, look, I honestly I knew nothing about it. And as evidence of that, here is the 32K that you saw, which sa suggests that they have signed something saying that they didn't know about it. So you know, a great example of what that disclosure is actually there for. That in that instance it's protected the purchaser. In the last one, the I'm pretty sure the ladies that own that termite house thought that the real estate agent had been unconscionable and he was saying we hadn't we we didn't know anything about it.

Peter Schravemade (36:46) So yeah, very, very good differentiation. And I did see that strata ma title one. If you're doing a search in body corporate and you don't any kind of strata title and you don't do a body corporate search that dates back twelve months. Because the things that you find in there is the the swimming pool has a hole. There's structural defects in the in the building, which I think is is in his instance he's not saying. But basically his four million dollar purchase, he was going to spend more than three million in order to retain that. And so he was almost giving it away. But that that is a trap for young players. Any any kind of strata title, you need to have a look at it. Let's move on. So we had our RBA decision. Yeah. Well, is it

RBA holds at 4.35 per cent as ANZ tips Sydney down 9.9 per cent in 2026

Kasey McDonald (37:23) Yes. Well I guess the the news of the week. The news of the week, right?

Peter Schravemade (37:28) Is it really like I don't I don't know if I'm becoming a bit desensitised to this, but the the RBA held at four point three five percent. I I didn't expect them to raise this one, but I think we are going to see a rise before the end of the year with maybe two of them. But but the forecasts, the property forecast for the thing to come out of here. So w we've got ANZ, ANZ Bank saying Sydney will be down nine point nine percent over twenty twenty six. And they are predicting four point fourteen point five percent into twenty twenty-seven. Now that actually that's not funny. That's catastrophic for anyone that's bought under the five percent first home owners grant. They they will be in negative equity. If that happens, they'll be in negative equity by ten percent, maybe some of them.

Peter Schravemade (38:17) That's a lot to come back from. So, you know, you got a two million dollar house, you're down potentially if if it's fifteen percent. You're going to be down what, almost three hundred thousand dollars on that two million purchase. If it's ten, you'll be down two hundred thousand, which will sit under your loan. So you get it you're in an equit negative equity scenario. But yeah, look, it doesn't it's it it doesn't translate to to cheaper houses is what I'm hearing out of this, right?

Kasey McDonald (38:53) No, yeah. I and that's I think been the sentiment that's come out that it's not this policy is not working. It's actually

Peter Schravemade (39:01) It's not working at all.

Kasey McDonald (39:02) it's not working at all, but it's it's actually going against each other, is what many of them are saying. You know, I guess all the banks are predicting slightly different things in terms of, you know, where we're going to be positioned. But you know, I think I think Nerida Conisbee came out to say that falling house prices doesn't mean the cheaper housing, as we've discussed. And the CPI, the headline is that the CPI is at 3.8% and the housing inflation at 6.8%. And so the largest single contributor is electricity at 22.4%. So with and that's like obviously with rebates ended. And to be fair, in that first month of that rebate ending, we certainly noticed, you know. That that peak, right? In in our bill immediately, that you sort of go, wow, where am I going to kind of find that extra wasn't budgeting for that? You know, construction costs are up, rents are up, vacancies low. So it's, yeah, they, they're definitely working against each other. This is not creating the supply to get the people into housing at all.

Peter Schravemade (40:13) No, and and I'd I'd like in every single time you've seen a market fall, generally rents will fall with housing prices. They fall in in concert that or or one closely after the other or before the other. But this is not the case. That's that hasn't happened. And the other thing I think the unheralded outcome of this that the you know, most of the governments I think are at the moment, most of the state governments are Labor. And one of the things that things that I think those governments will be having very, very concerned discussions with their national Labor counterparts behind closed doors is that a large portion of the operating budget for the states comes from the s the stamp duty on houses every time they're transacted. And they've effectively ground that to a halt. So they've killed the golden goose that was that was feeding them.

Peter Schravemade (41:04) So I I think there are going to be a lot of state governments that start to feel a pain before long and Melbourne, I mean Melbourne is it completely in the toilet. Like if they were it weren't before, with all of the the debt that they've racked up over the Commonwealth Games, the train saga, the CFMEU th corruption that appears to be that's been alleged, all of that missing money that's gone through there, all the way back to Dan Andrews and the and the the COVID scenario under the current Labor government now they're not getting income from houses being transacted. And so you know, I can only imagine the pressure that that just keeps heaping up. And that that's not even been discussed. Like when we're talking about the supply and demand issue, it's like everything's ground to a halt and it's i it could could actually be the perfect storm.

Kasey McDonald (41:56) Yeah, look, I think the key here is cheaper and more affordable. You know, that stopped meaning the same thing. But to be fair, we've made building costs, right? Like so to build it's more expensive. And now we've made it less attractive to invest here in Australia, but we've done it all at the same time. Right? So though I think the policy outcomes have certainly you know, not been an accident here. I I don't I don't know what they were thinking really, but it's definitely coming to the forefront that it is absolutely not working.

Peter Schravemade (42:34) Yep. And on on that same thing, the next story is on the Sydney Plan, which I'm gonna call it, which commenced yesterday. It's a twenty year framework from the Minister for Planning and Public Spaces, Paul Scully. But that they're saying that the plan is a final is now final and operational. Not every policy in inside it was announced yesterday. The 30 year capacity rule was flagged for 29th of July. But the the premise is Sydney grows from five point three million to six point six by twenty forty six, requiring at least eight hundred thousand homes and nine thousand, nine hundred and fifty thousand jobs. Yeah, councils maintain a rolling thirty years of feasible housing capacity. Do you understand what feasible housing capacity is?

The Sydney Plan: 800,000 homes and 'feasible housing capacity'

Kasey McDonald (43:21) No, probably dive into that, I think.

Peter Schravemade (43:24) Yep. The it's the portion of theoretical capacity that is commercially feasible for the private sector to develop to develop. So you have this area and it is feasible that or theoretically possible for that to be developed. So the costs of land, finance, labour, materials, taxes, and other key inputs is less one on what the h new home will sell for and provides the developer with a reasonable return. So there's that distinction. So this this is talking about we have a 30-year plan that has feasible housing capacity, we have the ability to deliver these houses, but the distinction between feasible housing capacity is actually delivery. And what we're seeing at the moment is delivery is failing. So the cost of land, finance, labour, materials, taxes is less than what a new home will sell for and certainly doesn't cover the rent. And so whilst they might have delivered the feasible housing capacity, the theoretical capacity doesn't match that. There's no way that these things can be delivered under the current you know scenario, under the current climate. So, you know, what do you what do you think there's even any reason why we should be listening to a a feasible housing capacity when the theoretical capacity doesn't doesn't deliver?

Kasey McDonald (44:51) Yeah, it just doesn't make sense to me. It's just like yeah, like you

Peter Schravemade (44:55) Nigh, night.

Kasey McDonald (44:56) know, the numbers aren't matching up. And and

Peter Schravemade (44:59) They don't they don't match up for anything.

Kasey McDonald (45:01) no, that's what I mean. I think for all of this and everything that they've kind of delivered, the numbers are just not stacking up. And what we've done in is the opposite to I think what they were hoping to achieve here. And so, you know, they're now not getting, you know, the banks are down. In terms of the loans that are are being written right. And the

Peter Schravemade (45:23) Yep. Yeah. Big big time.

Kasey McDonald (45:25) big time, right? So they're kind of going, well, wow. And of course, they're then looking at their profit, you know, they're looking at their

Peter Schravemade (45:28) Poor banks aren't making money.

Kasey McDonald (45:30) profit margins. The CEOs are going, God, I'm not going to get my, you know, millions and millions this year. I might drop and buy a million dollars in my salary. You know, but I think what what they've done, you know, it just has not stacked up in any way. Like nothing is just making sense. So yeah, I think

Peter Schravemade (45:46) Yeah. Well I'd I'd point I'd point this to I'd point this to no theoretical capacity or feasible c capacity is going to deliver if the commercial realism is not correct. So commercially this is not deliverable. And the other issue I take with this whole argument is that it doesn't cover the amount of houses that we're already in deficit. It just says these are the ones that coming. So to me it appears to be a a a press release for the sake of a press release to say, we're doing something about this. We've yeah, we've got enough corridors that could put a house if we could build a house there, but we can't build a house. You know, like it doesn't it doesn't make sense. So should we move on?

Kasey McDonald (46:30) Yeah. Yeah. Yeah. Look, I want to dive actually into a really positive. Yeah. I really

Jonny Warren's bid to fix Canberra's 588 empty public housing homes

Peter Schravemade (46:36) Well, this is a good news story, right? Yeah.

Kasey McDonald (46:38) want to dive into a a positive story. Cause right, like I think, you know, sometimes we can talk all this gloom, right, about what's going on and all the negativity. But this story this week is about a Canberra agent. He was homeless as a teenager. Have you seen this one on the on the news as well and through socials, Pete?

Peter Schravemade (47:00) Yeah, I have, yeah. I love it.

Kasey McDonald (47:00) Yeah, yeah. So he obviously you know, had a drug addiction as a teenager, was living on the streets himself. He got clean and thought, okay, I'm gonna get into real estate. That was in 2014, I think. And he's kind of, you know, out out with a Vinnies night patrol recently and saw young lady and her four-year-old on the streets. They had just that they'd been sleeping out of their car and he thought, well, you know, what can we do here? But I think the the key component of this story is that it's coming out of the ACT. So there's five hundred and eighty-eight vacant public housing properties in the ACT at the moment. 285 need maintenance before they can be tenanted. 3,650 people are approved and waiting to move in, right? But there's not even enough homes for that to happen.

Kasey McDonald (48:00) And so, you know, the priority of you getting one of those homes has extended out to now over five years. And so this particular agent is now, you know, looking to do something to support and get out there and fix some of these homes to ensure that some of these people can get off of the street and move in into this public housing faster. So I I just think this this is an agent who. Was in that position himself and has been able to obviously move forward and get out of it, but is now g now giving back. So, you know, we always talk about how we're not how we're not great people, right? Jo Jonny Warren, right? Let's name him. Yeah, absolutely. Yeah.

Peter Schravemade (48:37) Yeah, well let's let's let's name let's name the guy. Like this is yeah. John Jonny Warren of Jonny War- Warren Properties is a outstanding article because you know, we're

Kasey McDonald (48:45) Yeah. Yeah. Hundred percent.

Peter Schravemade (48:49) actually seeing somebody who who has come from that scenario turn around and go, you know what, I I can do something about this and I'm going to

Kasey McDonald (48:55) Not this, yep.

Peter Schravemade (48:56) do something about this. And from what I understand, he's he's taken out almost cut through all the red tape and is is going to deliver and it's something that we should follow actually, I think. You know, we we might try and get him on the show and see what he has to say about it. But if what I think I think what he's the the biggest thing is the and the biggest thing I don't understand is how those houses can actually sit there without the maintenance happening to them. Like we have that p pit of money sitting there. So why how is it that he could step in? Like it actually re raises a few more questions. If he's actually successful, he steps in and he starts turning these things over by renovating them and getting them ready for people to live in at by the way, he's he's getting nothing back.

Peter Schravemade (49:43) This is his own money, he's just throwing at it. So but if he he can actually do this, why why are they empty in the first place? You know, that there's money there for that. So I don't know in this particular instance, I haven't followed as to whether it's the ACT territorial governments issue or whether it's federal, my guess is it's probably state. But yeah I have no idea as to why this would be a problem at the start when we have that many people sitting there already approved for dwellings and we have the dwellings there that need renovation. I mean, admittedly I've seen some really, you know, houses in bad states and that might take a long time to get up. But some of them might might just need carpet and paint. So I you know, I I don't yeah. But I'm I'm really happy to see that there's a real estate agent putting his money where his mouth is, like and and doing something in society.

Peter Schravemade (50:40) Like imagine imagine you know, just for a second, you're an operational agent and that story breaks about you and you can actually go to the market. I'm not saying he's done this for commercial enterprise. It it sounds like it actually resonated. But I I would I would get that agent over other agents if if if that was what he was giving back to my community. I'd I'd I'd call it it'd be a donation.

Kasey McDonald (51:02) Absolutely. It just shows the empathy and the care, right? Like, and it just shows that he has a genuine passion to be helping people to achieve whatever outcome they need to achieve. And in this instance, it's about how do I help? I was one of those on the streets. And how do I help get others off of the street? Well, there's homes here and clearly we're not doing anything about it, right? And so I get it. There might be some of those that are a little bit more. That need a little bit more work than others, but I'm sure that there are some that just simply need a replacement of carpet, maybe some fittings, you know, maybe there's a few doors off or whatever it has happened. But it it might be a week's worth of work or not even, and a few days, get everyone in there, a few, you know, coats of paint, and we can actually start to move some families off of the street and into homes.

Peter Schravemade (51:54) Yep. Yep. And and don't get me wrong, like I judge a few awards aro around the nation. And and I'm under NDA. I can't mention specific examples of that. That's that's what you do when you sign a judge. But I do see on a regular basis, I judge a section called, you know, positive change in your community where real estate agents write in about what they've actually been doing. And there are others just like Jonny Warren who who are doing fantastic things in his community. So well done, Jonny. I appreciate what you're doing and and keep up the good work work, mate. It I it's a the best story that we've had in weeks, right?

Kasey McDonald (52:31) Yes, absolutely. Totally agree with that. Yeah. What's next on our list to chat about today, Pete?

Peter Schravemade (52:36) Well, here's here's one and we've been talking for weeks about the amount of hate generated at real estate agents w it and a lot of it undeserved. Like there was a st a song on the ABC that they they went live with, which was completely unjustified. It was almost all of the lies that are being spread by successor successive state governments to try and say to the tenant, We're on your side, we're doing the right thing, even though they're not building houses, which has created the problem that they're in at the moment. So we yeah, I think it was was it last episode or the episode before? We actually looked at those lyrics. It was pretty disgusting example of of assassination by media. This bloke, I think, is suffering the same thing. He he's what's considered to be a mega landlord, and I won't name him, but the guy grew up in housing commission in a small regional area, bought his first property at 18.

A 200-property mega landlord versus the Renters and Housing Union

Peter Schravemade (53:30) He says he has about 200 properties. Look, I every every time I've met these mega landlords, there is a a fairer chance of exaggeration there. But he says he has about 200 properties and he's worth about 150 million with roughly 60 million dollars worth of debt. Could be the could be the truth. Don't know, don't know for sure. But that's the figure that's in the public space. So on the third of August, the renters and housing union. Ever heard of these guys before? RAHU? Me either.

Kasey McDonald (53:59) No. RAHU? No. Nope. No.

Peter Schravemade (54:01) Nope. They published a release saying after weeks of fact-finding, door knocking, and consulting with tenants, it had discovered excessively high rents, poor conditions, and unresponsive agents. And issued to this guy a list of demands. Now, well, that's weird. I've never heard of anyone singling out an investor. Maybe they did a background on his portfolio. I haven't seen that list. It hasn't been published. So there's no properties, tenants. Photos or documents are being made public. Like to me, that sounds like a massive court case. So the the the gentleman involved posted this week that he'd had hundreds of, if not thousands, of abusive messages from people who have chosen to believe the misinformation instead of facts. Now, we don't know what is fact and fiction in this. So full disclosure, this is all alleged. He's accused the union of charging fees selling merchandise with hateful slogans and door knocking his tenants.

Peter Schravemade (55:00) Well, this is like I've never I've never heard of this before. He published his property management email in the video. And what does check out, so the things I did look at is the membership fees are zero to thirty, which is means tested. Merchandise does exist, including a rent is theft poster. Hateful is his characterization, and the door knocking has been confirmed by RAHU itself. So they're actually admitting they did the door knocking. So like I've I I am like, if this is not a witch hunt, I don't know what a witch hunt is. You know, is this not just the modern day version where somebody has said, You have you have lots of properties, you have been successful, stuff you well, like I honestly, if there's truth behind people living in you know, poor conditions, we we have an Australian Act. Do we not have legislation against that now? Has come in across the board where so there that's

Kasey McDonald (55:59) Yeah. Yeah, there's minimum housing standards or, you know, healthy homes, you know, but but across each of the states there's w minimum housing standards in what is now applicable of to and and very and very much outlines what you must have working and functional and in a good condition, before you can even have a a a rent or move into the home. Yeah.

Peter Schravemade (56:26) Yeah. Yep. I would have I would have thought there are other ways around this. So if I RAHU actually found that out, I would have fo I would have been supporting the tenants in in helping them issue breach notices or the like to get it

Kasey McDonald (56:38) Correct. Yeah.

Peter Schravemade (56:40) to get it fixed. But it it appears to me that both of them are running public so social media or media campaigns one against the other. It almost appears that RAHU have gone for a high profile takedown of somebody who has been successful in property that that that's what it seems to me. And this but you know, looking at this property investor, there's a lot of holes in his response as well. Things that he could have provided but hasn't yet. So I'm I'm not so sure I'm not so sure about either of the case or who is guilty and who is not. It's probably a bit of column A and a bit of column B, to be honest. But I don't know. I don't have the answer to that. It just seems like a public spat, right?

Kasey McDonald (57:18) No. Yeah, absolutely. And yeah, RAHU, that's a new one. So yeah, interesting to see. Never heard of them. Unl unless it's someone

Peter Schravemade (57:25) Never heard of them. I have never heard of them. I'm gonna but they're on my radar now.

Kasey McDonald (57:29) unless it's, you know, a change of name. I don't know, unless it's but anyway, I've never yeah, never heard of them ever before. Yeah.

Peter Schravemade (57:35) I don't Renters and Housing Union. Yep. It's an australian. Yep. It people in unstable housing, we fight for better housing.

Kasey McDonald (57:44) So yeah.

Peter Schravemade (57:45) Like they've got a fully fledged website. It's it's crazy. Like I've never heard of them, but they're on the radar now, so I'll keep an eye on what they're doing.

Kasey McDonald (57:50) Okay. Yeah, definitely. And look, this story has, you know, come up a little bit. We've spoken about it, but the self-managed super fund door I believe is now closed, right? In terms of being able to buy residential property utilising your super funds. And I know you know, this is something that you were certainly looking to do. But I guess what it's seen and you know, from the research, I think money.com.au put out some figures during the week in regards to this that 27% of SMSF investors buy residential. And now we're seeing a 26% pivot to commercial instead because that's allowed as a part of this. And only there's only 12% that certainly buy, you know, buy it outright. But 82% of Australians without it now see no reason to start one, right? So they're now, you know, I guess the investor side of things is looking at how do we now think of other ways we can invest, you know, but more importantly, maybe we haven't had a self-managed super fund. Should we consider doing that? Cause now maybe commercial would be a good option for us. So yeah, what's your kind of take on on where we're seeing this kind of pivot to?

The SMSF residential door closes and the 26 per cent pivot to commercial

Peter Schravemade (59:11) Yeah. Well, look, I'm not telling anyone how to invest their self-managed super funds. I don't even know how to invest mine. But the dilemma Yeah, the dilemma is real. Like it's absolutely

Kasey McDonald (59:17) Yeah. Yeah, I I know, right? Yeah. Yeah.

Peter Schravemade (59:23) real. So we started a self-managed super fund. And I'll I'll just tell you what my findings are. We've had our money in super all our lives because it's easy to put in there. And it was a couple of years back, I think it was about four years back, we we did an assessment on what it was returning, and it was around about three to four percent. And a lot of people will say to me, Well, you can change this up, you can go to self-managed super funds and whatever else. The status quo don't look at that. They they believe, they put their money aside. And I've always had it in the back of my mind that, you know, property investment has been a a great tool for wealth creation. So we went and created a self-managed super fund and we didn't action it. We you know, for those of you who don't know, that involved creating what's called a bare trust, not a B-E-A-R, it's a B-A-R-E trust. There's a there's a bit of money involved in it. I think it's between three and five grand to set one up. And then

Kasey McDonald (1:00:15) Yeah, yeah, there is. Uh-huh.

Peter Schravemade (1:00:18) every year you have to maintain that. So I think roughly that costs between one and two thousand dollars a year. Even with those costs, that money sitting there at the moment is returning us eight percent. So so with those costs, we're earning more money than we earned from being in a self-managed super fund. Now, for the self-managed super funds out there, I'm sure there are better ones and there. Actually I'm great mates with the REI Super one. I've never had my money in that. Maybe I should be re-diverting to that in in to in this time. But from where I sit, after that budget, I have nowhere to go with it. I I can't do anything. I can't put it in in shares because it's taxed too heavily. I can't put it in property. You know, we were ready. We we had our loan docs or our pre approval for finance.

Peter Schravemade (1:01:07) We're ready to purchase. I've looked at multiples now and it just doesn't stack up. It doesn't make it. So, you know, I'm direct evidence that there's no way like I could go to commercial. I think commercial in my area is oversaturated. I could go looking at commercial elsewhere and maybe I should be doing that. Maybe that is a way out. Look, it's just not what I know. I'm really good with residential typically. I've I've done very well in that area. So I I would prefer to stick to that or or return to a s a self-managed super fund. But I get I get it. I just I don't see I I understand that people are switching to commercial. Do you remember Jim Chalmers came out last week and said, there has been a massive increase in the amount of companies started up, like the ignorance, they are all creating companies so that they can invest in commercial.

Peter Schravemade (1:02:01) These are not this isn't these are not businesses that are being run, as he was attributed. That there are less businesses than there were after budget. These are people who are going to invest in commercial. And that tells me that very soon that market will be exhausted. I mean, there's opportunity in every market, but everyone's kind of going that direction. So like I I'm with people. I I think I'm with the most of Australians that are have their money and self-managed super fund, I'm kind of in limbo at the moment, not knowing where to go. So if you're if you're listening to this and you have the good oil or the advice, I'd love to hear from you. You hit me up. You can find me on any of the social medias except for their dating sites. I'm not on those.

Kasey McDonald (1:02:44) Yeah, but I look, it'd be nice to say, you know, if if that statement is true in terms of those numbers, you know, are are people I'm sure they are kind of looking at commercial. I definitely know like a yeah,

Peter Schravemade (1:02:54) They definitely they definitely are.

Kasey McDonald (1:02:56) I definitely know that many are looking at, well, now let's utilise that in terms of real estates. Let's buy, you know, that commercial space for my office as an example instead of you know kind of leasing those office spaces. I know that's definitely been a lot of conversations that I've been having around doing that as you know as to where they kind of take their business and the future of that. So yeah, in interesting times I think in that space. But more importantly, we we need to understand as investors what we are able to use those funds for. So maybe, maybe if we do have any one listening today who's in that space, yeah.

Peter Schravemade (1:03:39) We've been asking. We've been

Kasey McDonald (1:03:40) Please come

Peter Schravemade (1:03:40) asking.

Kasey McDonald (1:03:41) on, reach out to us, dive, dive in with us, talk to us about what it is maybe is coming, or you might, you know, or maybe there's other ideas you've got. So we can have our listeners learn what they can use their self-managed super fund money for instead of it. Well, it's nice if you're sitting it in a bank and it's making some money, but you certainly want to do something with it to certainly make some more money, right? That's the whole purpose of it. Yeah. Yeah.

Peter Schravemade (1:04:01) Yep. Yeah, well that's that's that's only yearly gains. Whereas if I'd invested in something like a property and that property was rising in price, then I have unrealised capital gains in the future. So yeah, or or in stocks or the share share market, what whatever it may be. Hey, we we need to move on. We've got one more story before we finish. This is very different. And and I've been saying for weeks that I I have been calling out the REA Group as not having released anything to do with the changes in search findings. So it is very much of my belief that the Australian consumer have changed the way that they go about searching for property. I believe that AI is a huge part of that search now. We don't have any stats on it. And that might be something that might be something for another one of my initiatives, which is the PropTech Colab.

REA's AI Search Trends report and what it leaves out

Peter Schravemade (1:04:56) We might might have to have a look at that and and run a survey through there. But interestingly, there are two group sets of numbers out last week or just the week before. The first one was the REA's financial statement in line with our reporting that came out. We we spoke about that last year last week. This week we see they released REA's AI property report. So number one, I can't find, and this is anecdotal, I can't find anyone that's using the REA's artificial intelligence to search for a property. I don't know anyone that's doing it. They have an engine. That that's there. They've coupled with ChatGPT to to use it. I've I've used it twice. I found it to be incredibly poor. Like very, very poor. Not just it would be better if you just went to ChatGPT and searched for property straight up or Claude or whatever your chosen one is.

Peter Schravemade (1:05:47) That's my take on it. But on the 11th of August, which is now three days ago, they launched NextGen Now, AI assistant, campaign assistant, etc. Walk through reels, plus plus plus an AI search trends report. So I can't find anyone using the A AI search trends, but they've released this report. And it says a few things. 59% state start wide is what they're saying. So li lifestyle or community narrowing. 41% start with a suburb, 59% start with lifestyle or commute before deciding on a suburb. Now, to me, that sounds like a cost of living pressure every single time the, you know. If I was to travel to your place right now, Kasey, I wouldn't get there till eleven o'clock because we now have peak hour traffic that kicks off here in southeast Queensland. This is Gold Coast, Sunshine Coast, Brisbane, at four AM in the morning.

Peter Schravemade (1:06:39) Four thirty is when it kicks in and it doesn't it sometimes doesn't relieve all day. But on a normal day it will end at eleven AM and so me living semi regional, that that would that would take me about a three hour commute to get to your house in Brisbane on what should be a clean every day of the week too. It's probably more like three and a half if I go and peek. But but put that to the side. That's why I think people are starting with lifestyle or commute before they narrow, because they don't want to spend surplus of an hour to two hours in the car every day. Family and schooling is the biggest lifestyle driver in 14% of all issue all sessions. Well, I don't. I don't think anything much has changed there. That's why we put on every listing here are the schools and the catchment zones that that are nearby. Thirty percent include a commute or a travel radius, late stage buyers. Forty percent ask about architectural style, conditional p potential renovation potential, like renovation potential. How have you ever asked about architectural style when it comes to purchasing a property?

Kasey McDonald (1:07:46) No. No. No. And I think renovation potential. I think every property

Peter Schravemade (1:07:49) Me either. Me either. So is probably

Kasey McDonald (1:07:54) has renovation potential. Like it's about right, like you,

Peter Schravemade (1:07:57) Exactly. Yeah, that's it.

Kasey McDonald (1:07:58) yeah, I don't know. That's very interesting that they've kind of positioned

Peter Schravemade (1:08:01) It it well,

Kasey McDonald (1:08:02) it like that.

Peter Schravemade (1:08:03) they've grouped in conditions. So what condition is the property in? Maybe they're looking at that. 72% refine at least once. Location is a common change at 45%. Now, all of this is out. You can go and have a read of it up on the REA website. I'm gonna get to the point straight away. And it's what is not included in this report. This is not an AI report. This is a a housing search report with one semi AI stat in it. Again, this is our nation's biggest portal, the most profitable portal in the world, like is realestate.com.au. They've released an AI report with very, very little pertaining to AI in it. So every number is a percentage of sessions. The report doesn't say how many people use an AI search. I think that would be very embarrassing because we have those numbers. There's numbers in the US.

Peter Schravemade (1:08:55) The NAR released 60% start with AI first. There was one out of the UK, I forget where this came from, but it was about 45%. And that was last year. So I suspect that's up around 50% for the UK now. We don't have one, but can you imagine if we were anything like the UK and the US, which we kind of are, where between 40 and 60% of our people started with AI first, the damage that would do to the REA Group as a national portal who who don't have a meaningful AI search that's attached. Now they're going to dispute that. They're going to say, yes, we do. But let me, I have I haven't finished yet because I I this I thought this repet this report by omission was actually quite a damning report. So it opens with millions of Australians are visiting the site and then says only for some AI is becoming part of that journey.

Peter Schravemade (1:09:48) So you can't tell if that's 0.05% or 30%. No number on that. There's no time period, no trend line. It's called a trends report, single snapshot, no baseline. There's no comparison. And this is a group that have PropTrack. So they know how to research, one would assume, but there's no comment on that the whole way through. The most commercially important claim has no number. So property seekers who are using AI are most likely to save, inquire, share, or inspect. More likely than whom? By how much? How and people who reach for an advanced research tool are probably already more motivated. That's a selection effect presented as a reason to change your copy. So, you know, nothing on on how the AI decides what surfaces. Filter search was deterministic. A listing matched or it didn't. And you could check AI retrieval is not clear.

Peter Schravemade (1:10:40) So the report is silent on ranking, whether paid depth products ref influence AI results and whether agents can audit a listing that didn't appear. There's not one word about accuracy or liability. There's nothing about the vendor, the person actually paying for the campaign. And also worth the passing mention, the state commute figures don't sum up to a hundred. So they're within state rates, answering a higher number of questions. And the ACT four percent is incredible for a commuter city, but I think that has to do with the fact that they have that portal there. So like I I look at this report and I go, There's a real opportunity to actually guide real estate agents on where the search is happening at the moment. And it it's not included in that report. There's nothing in that report that I'd be looking at going, hey, this is a really balanced way of guiding yourselves on how to how to move forward into the future.

Peter Schravemade (1:11:32) Like we've got all these agents, and you would have seen it, you've been to a conference this week. You would have seen these agents are are concerned about how they appear in artificial intelligence. Where we have enough evidence filtering through to us anecdotally as agents that we are now saying that how I appear in AI now matters. We've got a bunch of former website producers saying it doesn't matter. We've got the REA Group is saying nothing to see here. But I I I feel as though some there's a a switch that has been flipped here. And I suspect that REA Group has a massive chink in the armor, is probably not in control of the consumer in the way they want to be right now in this space. And I think they're trying to scramble to get that to happen.

Kasey McDonald (1:12:18) Yeah, I think you know, I I think this report probably is just I guess more just like a data set, right? You know, like you you've you've raised it is there's nothing really specific. It's not we as a part of this, we're seeing these times of the day when this maybe is used opposed to other times of the day. We're seeing then these locations. Like there's no, I guess there's no, I guess, deep diving into around how that has surfaced and where they've gotten these figures from, I think, is is what I'm hearing is definitely the message that you're putting out here is this probably was not AI. This is just them or the consumer going to their site and searching in the way they've always searched. Because they're not that's not how AI is doing the searches, right? Like we we both know if we're then utilising those external platforms.

Kasey McDonald (1:13:17) Gemini, chat, Claude, whatever is your favourite, you know, and then you're prompting them to what it is that you're looking for. That is not how you search on REA. The common consumer is not doing that. And they might be going to, yes, I want to filter. I want to see keywords, you know, and I think that's the thing that they are very they spruik about, you know, certainly in how and which agents are right, they're marketing ads. It's about what are the particular keywords. To ensure that that when searching is done, that those ads appear, but that's not AI.

Peter Schravemade (1:13:52) Yeah. Yep. It's it's it's very interesting. I I have a personal belief that not the majority, but just under the majority are currently starting with AI at the moment. And if that's the truth, then where you were spending your money as a real estate agent now starts to come into question. It it probably is more exacerbated by the fact that the market's flat right now. So, you know, we're hearing everywhere that it's dried up. Now could be a very, very, very good opportunity to go looking for other ways of trying to find that elusive buyer because you might be surprised at where they come from, or you may not be, depending on who you are. Kasey, we need to close out. But

Kasey McDonald (1:14:35) We do.

Peter Schravemade (1:14:36) yeah, I know I'm well aware that you've got to jump on a plane this morning. Such is such is your busy life. Just before I do, another good news story. First National's Rural and Regional Muster in Albury-Wodonga. Say that five times really fast. Raised twenty-five thousand for the First National Foundation with ten thousand dollars to Yes Unlimited. And that's a 40-year-old Albury not-for-profit, lead agency for specialists and homelessness services in the Sur- Southern Murrumbidgee. Delegates delegates auctioned items representing their own region. So look, one thing I'd like to highlight today is that this industry cops plenty of criticism, right? We always we're we're we're on that. I think we take ownership of that when it's deserved. And we've handed out a fair bit today. So here's a room full of regional agents at their own conference auctioning off bits of their own towns and sending $10,000 to a homelessness service in the town that they were spending.

First National's Albury-Wodonga muster raises $25,000 for homelessness

Peter's wrap: two threads and what people chose not to say

Peter Schravemade (1:15:31) So two threads, two halves of the show. The first half was what people choose not to say. An agent invented a theft and didn't tell you until the last slide. A media statement announced the court win and left out the part where the judge said the model probably isn't unlawful. A vendor signed a form saying she knew nothing about termites six months after asking Facebook group what to do about them. Forty-one agencies found time to lodge an overdue audit only once someone threatened their licence. Portal told the entire industry how to optimise for a system that it doesn't describe but won't describe. And the second half was about the distance between an announcement and a key in a door 700 homes approved in Sydney construction mid 2027, 14,000 homes unlocked. The gaps between the thr two threads, so housing supply and demand, are the same problem.

Peter Schravemade (1:16:24) Trust is what closes the gap between what gets said and what gets delivered. And this industry and the government's regulating are both spending it faster than they're earning it. So I I think all we've had a week full of counterexamples. But I want to I want to leave you or talk last. About a bloke who slept rough who was trying to get twenty families housed by Christmas and told everyone exactly what was stopping him. I want the First National guys to be forward. I'd love the guy in Wynnum who put a joke on about himself on a billboard to let us know how his return on investment is. And you know that that's the part that I'd like to I'd to focus on in Friday the fourteenth of August in this twenty twenty six year. What about you?

Kasey on the 'changed agent' panel, the practitioners and sign-off

Kasey McDonald (1:17:11) Yeah, totally agree. I think we absolutely cop the criticism. You know, we've been speaking about it for weeks about the the real estate agent and agency getting the blame for these housing reforms and what's actually going on in the market. And we always hear out there the the negative stories and the misconduct that we've done. You know, but kudos and congratulations to those agents out there that have morals and ethics and are working. I guess to support the community that they work in as well. And they're giving back to that community. They're humble, they love what they do and they're passionate about it, and they want to see this industry thrive in the right way. And for us not to be known for all of this negativity that's out there. So well done to all of you. And the event, I'd just like to, you know, make a final statement.

Kasey McDonald (1:18:06) There were three guys that presented. At the event that I was at during the week, Pete. And it's kind of it's called this changed agent. And, you know, one, it's hard to even get up there, you know, the same as Jonny Warren, right? You you you don't want this people to feel like you're the playing the victim and that you're sharing your story to kind of get all of that praise. It's about what is it that they've done to mentally shift focus, to be a better human, to support their community, you know, be a great, real estate agent and and do what is there. And out of all of those three stories, what I got was, you know, they they made changes, they made that they had mistakes, I had to make changes and for many different reasons. But all of them were so incredibly humble.

Kasey McDonald (1:18:52) They didn't, they didn't want the pat on the back of, I'm so, you know, you've gone from here to there and well done. It was more about the fact that they are, we believe in the relationship that we're building. We believe in what product is that we're selling. And we just want to get the right outcomes for both our vendors and our buyers. And that is exactly why we've chosen this industry because that's exactly what we can do. So it was just really nice to hear that there there is positivity, there is great things that we do in this industry, and well done to everyone who continues to do that and operate in that way.

Peter Schravemade (1:19:32) Yeah, I call them the practitioners. I call them the guys that have been in the industry for for some time and have have come to realise that it's not about greed and money and driving the fancy car or or having the watch on your hand. It it's more about the community that you're serving as a real estate agent and the privilege it is to be in the position where you're trusted with someone's most valued possession to execute a sale or, you know, a purchase if that's your thing or the rent of that. So you know, the longer the better we can focus on that and the more stories that we have to draw draw attention to the practitioners and maybe we should make that a segment, practitioner of the week or something like that, you know, to highlight the silent heroes or the superheroes that are doing jobs, even when they're in an industry that that or a a a climate that is sort of treating them very poorly at the moment. But wherever you are, whatever you're doing on Friday the fourteenth of August.

Peter Schravemade (1:20:26) We're delighted that you might have chosen to spend it listening to us bang on. It's it's always it's always humbling when we hear somebody come up to us and go, I really like that episode or thank you so much for doing this. I had someone describe it last week as water cooler conversation for real estate agents, so it's just great. I've been involved in some terrible water cooler conversations in my time. So I wasn't really sure how to take that, but I think it was a compliment. Kasey, safe travels today. If you're a real estate

Kasey McDonald (1:20:52) Thank you.

Peter Schravemade (1:20:53) agent or a property manager or any professional and you're out there doing your job on the weekend, all the best. I hope it is a happy hunting and a successful weekend for you all. On behalf of Kasey McDonald, myself, and the Before the Weekend crew, which is just us. It just sounds good if I put it in there, just

Kasey McDonald (1:21:09) Just us.

Peter Schravemade (1:21:10) us. We're wishing you the best weekend and happy hunting. And you can find us on all the streaming services if you haven't already.

Kasey McDonald (1:21:18) Yep. Happy weekend everyone. And that's a wrap on Before the Weekend.