Victoria's Auctions Go Quiet and Who Really Ends a Tenancy

Opening: five lost days, two fine days in Melbourne and the REIV Awards

Kasey McDonald (00:05) Welcome to Before the Weekend. And we're at episode 24 this Friday. what are what is the date today? I've actually lost. Is it the 18th or the 19th? Where 18th, 19th, 23rd. There you go. God, what a crazy week we've had. I have lost five days.

Peter Schravemade (00:16) It's the t twenty twenty no twenty third of October today, Kasey. You've lost five days somewhere in the ether.

Kasey McDonald (00:25) In the universe, they've disappeared for me today.

That that goes to show exactly

Peter Schravemade (00:30) Yeah.

Kasey McDonald (00:30) how busy we all are within the real estate landscape, Pete. and I know you're joining us today from Melbourne, right?

Peter Schravemade (00:39) Yeah, I am. I am actually the first two beautiful days I've had in Melbourne for the last three years. It's absolutely stunning

Kasey McDonald (00:44) Ha ha ha.

Peter Schravemade (00:45) weather. So I'm very thankful for that weather. But I've been down attending the Real Estate Institute of Victoria Awards for Excellence. Obviously, everyone dressed up in their finery last night. yeah, it was a it was a big it was a big night. Kasey, I know you've been to a few of these, but it was really good to see the Victorians.

Celebrating the successes of a lot of real estate agents, property managers, officers that were there. And there's there's some really good stories as well. I was on a table with with a lady, I think the business was called Home Helpers and they they were all about positioning people into ha into houses and yeah. Fantastic night, but there was a lot of discussion out of that night as well.

Kasey McDonald (01:29) Yeah, excellent. yeah, probably great to hear about the chats that you've been having. But today we've got a a f jam-packed episode. we've not got some, I guess, property management stuff to chat about in my little mailbag that I'll get to later in our episode. But

Peter Schravemade (01:46) Mm.

Kasey McDonald (01:48) today we're gonna focus on

some Victorian election shakeups and the three-strike backlash, of course, that's coming out. So no doubt that was a bit of a topic of conversation at the awards last night. we've got property managers thinking of ditching trust accounts, of course, payment scams. We've got some mergers coming out, again, AI photos coming through on our advertising. so lots to talk through. so let's kick in actually. I wouldn't mind starting with the Victorian

piece here, Pete, around the election.

The Victorian election: a Labor-Greens deal or Liberal-One Nation, and an industry that wants neither

Peter Schravemade (02:22) Yeah.

Yeah, well I think I think every time you speak to any kind of Victorian, you're asking them, What are you going to do? Something about that Labor government that's in power.

Kasey McDonald (02:30) Yeah.

Peter Schravemade (02:33) I mean, we laugh we laugh about it, but it's become almost the running joke across the country at the moment. You go to New South Wales, they're talking

Kasey McDonald (02:39) Yes.

Peter Schravemade (02:40) about the Victorian government, you go to Tasmania, they're talking about the Victorian government. I'm sure there are other governments worth talking about, but it's just because they've been on the nose for so long.

Kasey McDonald (02:50) Mm-hmm.

Peter Schravemade (02:52) And I think the the the the disbelief is that, you know, from last night is speaking to people is that there is still a way that they may find themselves back into power after I think it's twelve years of of disastrous

Kasey McDonald (03:08) Mm-hmm.

Peter Schravemade (03:08) ruling down here. The Victorians are you know, they they're just tearing their hair out. They don't know what to do about it. But

even even in that scenario, you know, the comments last night and it was from all across the room, was that there is a there is a play for Labor to reform government. And it was the two directions that are frightening a lot of the real estate industry alarmingly. Like we've seen a lot of chatter in the past week. We covered a few of them. I think the r three strike landlord ban

Kasey McDonald (03:43) Yeah.

Peter Schravemade (03:44) was proposed by a

a Greens campaigner down here and would be catastrophic for the industry. I've seen nothing but one expert after the other come through and say that is a ridiculous idea. That is, you know, you you clearly don't understand the housing market. But one of the biggest fears here is that that Labor is able to form a government with the Greens. And I think if that was the case, the property professionals in in in Victoria would would come under more duress than they currently are. And that's really saying something.

So that was the first one. I think the second one that I heard quite a lot was that the other alternative appears to be a liberal government coupled with one nation. and

Kasey McDonald (04:26) Okay.

Peter Schravemade (04:27) and a lot of people were expect saying that that was the lesser of two evils, but it really does I like I I just I've never been in a scenario where there is very, very little hope on on the negative or the positive side, or they just they don't seem to

view either of the options as being a a wonderful a wonderful option. So, you know, a a lot of people don't even know I'm getting the feeling that a lot of people don't even know who they're voting for at this stage. there's

Kasey McDonald (04:58) Yeah, interesting.

Peter Schravemade (04:59) a y yeah, 'cause there's a lot of people sort of saying, well, we'd almost be better off getting Labor back in on a majority if that was going to be the case. But then, you know, you just don't know if if fifty percent of the people vote for Liberal One Nation.

And then you've got that government coming in and and yeah, I d I don't know. They just seem to be torn at the moment. So f that's the first part. The November twenty eighth election nightmare, I think, is the big one. But yeah, then then

Kasey McDonald (05:27) Yeah.

The Greens' price: three strikes, landlord licences, a $50 million regulator, a two-year rent freeze

Peter Schravemade (05:28) the Greens are scaring the crap out of the industry here. So the three stroke landlord pitch, yeah, the industry has been in open revolt, I feel, this week. Some green tenants right spokesperson called Gabrielle de Vietri.

floated a fifty million dollar independent rental regulator. I mean, like we don't have enough regulation in there now. Landlord licenses, you need

Kasey McDonald (05:50) Mm. I know. I think there's like a hundred and f I

think I a hundred and fifty or whatever it is it was like there's still more coming, right? Like they've still got stuff that are then

Peter Schravemade (05:59) Yeah.

Kasey McDonald (05:59) coming through to March next year. it's like a hundred and fifty plus rental reforms alone, let alone what we've also seen across the sales side of the industry as well.

Peter Schravemade (06:09) Yeah, and then they've got this two year rent freeze and permanent caps tied to the property between tenancies. You know, the caps that they're talking about aren't effectively caps. and I I didn't really understand this, but I had this explained to me last night. They're tied to CPI increases. Now I'm not sure whether tenants actually understand what CPI increases are, but that's that's good for me. Like I'm I'm my you know, I'm keeping my property against

CPI increases at the moment. CPI me I mean the consumer price index is is constantly rising. I've very rarely seen it fall, but you know, they they're saying the CP you can tie it to CPI increases. And I I actually think that's a bad thing for tenants. It's not something I'd be advocating for tenants because there are instances where you can go against that. And if that tied to that, I think it'll just become the norm for landlords to okay

We're we're moving it up. We're moving it up now. That's what's happening. so look, they're definitely not laughing down here. But I

Kasey McDonald (07:14) No.

Peter Schravemade (07:15) see, I see, you know, just on that third strike, we got Michael Yardney who's in investment property. He tore apart the logic this week. It just the probably the best art argument for it. yeah, just unbelievable. Like everyone's been sort of ha hammering it back. But then there's other people saying that.

the cumulative paperwork crush on top of everything that they've introduced that as well would be would be very, very bad. I don't know. It's it's in it's in your space, I suppose, Kasey, being in the in the rental area, that three strike landlord push, but I c I can't see you would be a fan of it either.

Kasey McDonald (07:55) No, definitely not a fan. And obviously last week we touched on that, that there's many on the ground that certainly aren't either. So yeah,

Peter Schravemade (08:01) Yeah.

Kasey McDonald (08:01) I can probably understand why they're unsure and there's uncertainty for them in terms of where they're gonna land their votes. yeah, which, you know, doesn't provide the confidence that I think the industry is lacking at the moment, right? In terms of that direction. But one thing I'm actually really interested to

To hear as to whether or not this was a topic of conversation was around the auction changes and that the reserve prices. because we obviously have had Andy Reid on and talking through that and what it kind of meant for the industry and and his view on what that meant. But tell me, what were you hearing last night? What's going on in that space?

Auctions go quiet: seven-day reserves and a three-year low

Peter Schravemade (08:41) Yeah, it but look

hasn't hasn't been positive. In fact, I think Luke Banitsiotis, who is the former winner of the Australasian Auctioneering Championships, he was presenting Greg Brydon with an award last year. Greg Brydon took out the auctioneering contest, the Australasians, earlier in the year. So he had a follow up award at the REIV you know, at the REIV awards last night and he was referencing it in passing, saying that it had been, you know, a catastrophic week.

Four auctions there. Now, yeah, like I know we had Andy Reid on the program. He was talking a big game. He was saying, I think this is, you know, his he was putting it, he th thought it was his opportunity to demonstrate his value. But yeah, auction volumes have collapsed this week. I have seen I've seen on social media people turning up to auctions in open revolt against the auctioneer. I like I've seen video footage online of

of people telling the auctioneer how to do his or her job. I've seen a lot of them passed in or just not even get to the reserve that's down there. So I would have to say that yeah they they're down, I think they're down circa 60% on a three

Kasey McDonald (09:56) Yeah.

Peter Schravemade (09:56) year low. Cotality recorded less than yeah, less than 500 auctions down more than half year on year.

And the REA group recorded 452 down 60% to a three-year low. but yeah, definitely it is based on the reserves. So vendors are setting defensively high reserves seven days out. I th I I believe we raised this. I believe we raised this when we sp spoke about

Kasey McDonald (10:21) Yeah, we did. Mm-hmm.

The $2 million reserve and the $1.9 million market: why nobody sets a low reserve

Peter Schravemade (10:24) it. We were saying, what would be in your incentive to keep the reserve low? So you know, no one wants a low reserve because you basically have to sell it. Like, you know, you go into an auction, just

Just picture it. You think your house is worth two million and you're going into an auction, why would you set that reserve under two million? Like what what what incentive would there be? And I think that, you know, the the government was hoping that people that had put it at one point five and that that five hundred thousand. But what happens if you put it at one point five and someone bids one point five one? You've done you've done yourself out. What what happens if you put it, you still want the two million?

And you put it at one point eight one. And look, that was always the beauty of auctions is that on the day it would force the vendor to see reason and meet the market. Because the market, like right in front of them, the market is telling them it's one point nine. He set the reserve for two mil. He can't change it. So you know, but there's a hundred thousand dollars the difference. And and most real estate agents who've been in sales know this. The the difference between a deal and no deal is very, very little on the day.

Kasey McDonald (11:35) Yeah.

Peter Schravemade (11:35) and there's quite often that you can you can get the people to see reason, but with this auction reserve setting, like it just takes the fun out of it. It takes any kind of win, it takes the market out of play. It's basically the vendor dictating to the market what the market should be doing on that given day. And I this is why I've seen all of these you know, these these people pushing back. I yeah, I saw a an an auction.

on I I can't remember the details, but the people who were there were in they were they were saying you're not allowed to do this. It was like a he he is allowed to

Kasey McDonald (12:11) Mm.

Peter Schravemade (12:11) it. That's that's the you know, that all turned up. They were even more disappointed because that turned up on that same house. The reserve had been set at two million. No one could bid under that. And the government sitting there saying, happy days, you know, we at least knew it was going to be two million. It's transparent. Well

Kasey McDonald (12:29) Yeah.

Peter Schravemade (12:29) it could have sold at one point nine, you idiots.

Like absolutely

Kasey McDonald (12:32) Yeah.

Peter Schravemade (12:32) could have sold at one point nine, but it it's not gonna do that now because you forced him to set it and he can't sell it for under it. It's like it was absolute ludicrous. Like so I think we've seen the the tail end of that now. Andy was there last night. I didn't get a chance to catch up

Kasey McDonald (12:46) Mm-hmm.

Peter Schravemade (12:46) with him and I might I might hit him back during the week to see see how it's going. But look the the numbers speak for themselves. the the yeah, the the auction rates are down, people are going to private treaty, which

you know, was always Toby Balazs. He he that was his point, is that it's gonna force people back to private treaty, which is, you know, s in many cases no price on the property, make us an offer. So the auctions have effectively gone silent in Victoria

Kasey McDonald (13:16) Yeah.

Peter Schravemade (13:16) or they they're headed that way. And that's I I hate to say it, but I I I told you so doesn't sound great in retrospect. But that was that we we were both saying that. Toby was on the show saying

Kasey McDonald (13:28) Mm-hmm.

Peter Schravemade (13:29) that.

you know, so I I like yeah, I I feel really sorry for the Victorian auction. you know, especially in a year when they won the Australasians, like Greg Brydon, finally. I've watched him years ago. He's

Kasey McDonald (13:39) Yes, I know.

Peter Schravemade (13:42) he's like he's really he's really done well. It's been a dream of his. He's worked so hard to get to it, and now through no fault of his own, the Victorian government has come in to try and win votes and put this ridiculous law in that that could effectively spell the end of.

of of of auctions in Victoria. I don't think that's gonna be the case, but I think there's gonna be fewer.

Kasey: the Liberal Party's opening

Kasey McDonald (14:05) Yeah, well, I think now this is the time, right? Taking it back to that election piece. And now's a time for for someone within the Liberal Party to be listening and understanding

Peter Schravemade (14:15) Yep.

Kasey McDonald (14:16) maybe what they then need to go to, I guess, their campaigns with and bring out how what in which they might change. And they don't need to maybe change

Peter Schravemade (14:24) Yeah.

Kasey McDonald (14:25) all of it, because I think we both agree that there are probably some reforms and changes that have come into play that probably needed to be.

brought in, or maybe updated, but not everything needed to be. So I think it's an o optimal time for them to now be thinking, how can they bring a great campaign to market and be voted in?

Peter Schravemade (14:44) Yep. Yeah, agreed. Shall we move on? yeah, let's let's

Kasey McDonald (14:47) Hmm. Moving on. Yeah, definitely.

AI beyond listing copy: the Alto survey and "Using a brain to hold a pen"

Peter Schravemade (14:50) go to go to artificial intelligence. I mean, it's been a hot topic.

Kasey McDonald (14:53) Mm-hmm.

Peter Schravemade (14:54) We've kind of avoided it. I I wouldn't say avoided it, Kasey, but we haven't focused on it a lot because I think you and I are very acutely aware that there's a lot of tech fatigue that has happened in the industry in twenty twenty six. Everyone's saying that they've got some kind of AI and

Kasey McDonald (15:05) Mm. Yeah. and definitely around AI though.

Hmm.

Peter Schravemade (15:10) Yeah, that's right. I think there's a couple of things that have come out this morning that's w or this week that is worth talking about. So there's a UK

Kasey McDonald (15:18) Mm-hmm.

Peter Schravemade (15:18) Alto survey of two hundred and fifty agents and and that basically says everything we thought. In fact, that came out yesterday and I wrote an article in Elite Agent two weeks ago that echoed the sentiment. I I was I've

Kasey McDonald (15:33) Mm-hmm.

Peter Schravemade (15:33) kind of been of the opinion that most agents think of AI only when it comes to writing listing descriptions, right?

And I've been saying that's that's ridiculous because it could do so much more. And that's what this UK article said. one in twenty-five use AI for any kind of sales progression, so not many at all, and five percent use it for compliance. Well, you know, so yeah, I I'm not gonna harp on my article. This is not an ad ad advertisement for me, but I was talking about the advancement in an area called MCP, which is model context

Kasey McDonald (16:07) Mm-hmm.

Peter Schravemade (16:08) protocol, in layman's terms.

It's just a more advanced version of an API where you know, I see the that at least the technology industry is headed that that way. And and more my article was directed at at at property technology companies who I I feel who if if you aren't looking at that at the moment, you you're going to be a legacy software in twenty twenty seven. I don't think I said as much in the in the article. But what I th I suppose the talking point here is

number one, why why are agents not advancing their use for business development purposes? So Kasey, you run a you run a sales department, let's say. you've been using it for listing copy, but AI can do so much more than that. Like AI can run your social media, AI can definitely give you a leg up in the compliance area, AI can put together systems processes between different

different functions that you you take, like maybe a CMA, it could be doing that automatically. It could be trawling through your database looking for people who are likely to purchase in the not too distant future. And probably the biggest one for me, which was also in that article, is that AI can be connecting a lot of the softwares that in the past have not connected, which is the number one bugbear. So know knowing all of that and like I've seen that these are not things that are questionable.

These are things that are actually happening and more. Like AI in the area of video is becoming really great. And we've seen voice calling. We've spoken about it on this program before. But look, all of this is happening, but the average agent's still only using it for listing copy. You know, i is that is that because of the tech fatigue? Is it just that cooked, that done? Is it

A lack of curiosity. What what is it that leaves us in this in this area? I mean do you know?

Kasey: fatigue, fear and the privacy question

Kasey McDonald (18:10) I I think it's a combination of all of that, but also I think it there's a little bit that falls back onto the Prop Tech provider, around what are they doing. And we covered obviously what PropertyMe have launched and how they've looked to consider that. And I know there are other providers out there that are actually working on things. I know you work closely with another provider as well that is looking at making those

Peter Schravemade (18:32) Yeah.

Kasey McDonald (18:33) enhancements, but I think it's about

There's a cu there's a curiosity level, but I think everyone is exhausted. There is fatigue there around what it actually is and how it can use it. But I also think there might be a slight fear factor. and it kind of comes down to that privacy piece. It's that, you know, data sharing is what is it actually gonna do with it? Will it hack it? you know, what where will that information end up going? So I think there's kind of a that element.

about it, you know, kind of going in and maybe doing some of the aspects, which is maybe why everyone's just gone to let's just get it to do some photos and some copy, and maybe help us write a a strategy document as an example, or help us write emails. but that's predominantly where I see many people using it is just in that space. but they're not I mean, there are a lot of programs that have got things,

I guess built in right already. And it could just be with those chatbots, but it's that AI chatbot about well, how do I do this to connect that to then achieve this outcome? And many people aren't doing that to then understand how do I make my dashboards better? How do I get these results out of my CRMs? How do I interconnect it to social so that it does these five things for me on these days? So yeah, I think I think it's just a combination of of

Peter Schravemade (19:49) Yeah.

Kasey McDonald (19:51) everything. Yeah.

Open systems versus bells and whistles: chatbots, MRI, Realtair and the MCP deadline

Peter Schravemade (19:53) Just on one of those topics that you spoke about, like I I I definitely

Kasey McDonald (19:56) Mm-hmm.

Peter Schravemade (19:57) see a lot of the prop tech providers bringing out another bell or a whistle that AI

Kasey McDonald (20:02) Yeah.

Peter Schravemade (20:02) has done. So there's there's I think there's two approaches, two main approaches that prop tech providers have taken. One of them is to we're gonna open our system up and we're gonna allow connectivity everywhere. And I I actually think that's the right approach. That's something that should have been happening a long time ago, but wasn't, you know, wasn't happening. We we w we w in the previous lifetime

you know, two years ago we were doing that using APIs, all dead and buried now. If you're working on an API at the moment, you may as well stop it and start working on an MCP server because the it'll be irrelevant by the time you've made it. But the secondary part is, and I've seen this addendum, like I've seen this so often, you know, in the first I I vetted once I vetted a formerly large company known as a real estate chatbot in the industry, they applied

for funding in the REACH program. And and I I had a really frank conversation with the founder of that program who ended up selling his his software two weeks later. And I just said to him in all you know in all honesty, I can't sugarcoat this for you. There are 500 pieces of technology at the time there was and and about 450 of them have their own chatbot. But

You're going to look me in the eye and say that you've got the best chatbot and it's better than anyone else's. This, you know, you would remember back three years where it was all about chatbots. Like everything was about chatbots. And now that noise has died because everyone's got one. And what I what I think is that the secondary line for prop tech vendors is that they go looking for, we'll build another bell and whistle. People can come into our product and that can bolt on, but the

The bigger issue is that consumers now have choice. And so let's say that Bell and Whisp whistle whistle is a chatbot, but there's a better one in the industry. Well, they're not going to want to use the one that comes with your software. They're going to want to use the better one that's out there and they're going to want that to connect. And so less and less do I think it's about another pony trick within the prop tech that you're building. More and more I think it's about opening it up so that people who are building that software better than what you are doing can utilize that.

you know, their own particular flavor. And and we're entering what I what I am looking at is I think it's a a broader marketplace where, you know, rather than have all of these pieces of a of a a tech stack that don't talk to each other and don't plug in, yours will become irrelevant if it doesn't talk to the others and play nicely in the in the pit. And that's going to create a huge problem for some of the big ones in the industry who for years

have said our our tech platforms are the only only way. And like let's look at a few of them. Like MRI is a great example of that. Yes, they have APIs that plug in, but they have their own like they have their own software in there. And that software doesn't always you know share with others in the industry. Realestate.com.au got loads of software in there. They, you know, they believe Realtair is the only forms platform that you can use, you know, you should be using. But that's

That's not the case. There's so many other plums platforms out out there. And so it's going to be it more and more it's a case of which of these can you plug into. And the the longer it takes for property technology vendors to get a h their head around this, the worse it will be for their product moving forward.

Kasey McDonald (23:34) Yeah. And I think and like from the AI component of that, I think there's lots that we probably within the industry don't actually understand about AI, right? I think that's the curious piece probably here is that we do

Peter Schravemade (23:49) Yeah.

Kasey McDonald (23:49) just think it, let's be real, we we we're seeing it on the surface of that I'm need some help writing a better email or I need some help of you hashing up this strategy document for me, or hey, can you help me refine these procedures? So AI is obviously doing

that work to imp to improve it. but that's probably where we're only seeing on the surface level what AI can actually do. And we're correct. Yes. Yeah. That we're not understanding. Yeah. Yeah. I think there's so much around the

Peter Schravemade (24:14) Yeah, one small function of a of a of a greater of a greater piece. Yep. Yeah, and and it's probably

Kasey McDonald (24:23) tools we've got, around the automation that AI brings in, right? So it's about them understanding. What is it doing actually all in the background to make that tool

work that can then work with that tool can then work with that tool that then actually makes them more efficient.

Peter Schravemade (24:39) Yeah, and you you you you're dead right. And I think it's even in the way that we look at the technology that we're selecting. you know, are we are we looking for those bell and whistles or are we actually looking for things that will move the needle, give us

Kasey McDonald (24:53) Mm-hmm.

Peter Schravemade (24:54) more return on investment, give us more time to spend with our loved one loved ones, you know, facilitate the the processes through the office that we're in and and that's in in sales, in property management, in in buyers agencies and everything.

Enough AI talk, should we move on?

The shakeout: 15 to 20 per cent leaving, and ten-year hands in the room

Kasey McDonald (25:11) Yes, absolutely. What have we got next? we've got the National Agency Shakeout. so let's talk through this. We got

Peter Schravemade (25:19) Yeah, so

I'm this one came through from a REB podcast last week. So it was where

Kasey McDonald (25:24) Mm-hmm.

Peter Schravemade (25:25) the chief economist, I'm not gonna have a go at his name, but he he noted anecdotally that between fifteen and twenty percent of property professionals are are reportedly walking away from the industry as days on market blowout and listings get harder to convert. Now, we spoke

Kasey McDonald (25:41) Mm-hmm.

Peter Schravemade (25:41) very frankly about this last week.

it's certainly in the buyers agency area, but also in the sales agency area where it's just becoming harder to sell. I I also think that there is a you know, with within this, there's there's a modified feeling across the the industry. Like I've just I've just come from one state's industry awards, the same same names are there. These guys are all operators, you know, like.

There's a good chance that if you're in the room last night, you've been in business for I think Lucinda Hartley, who was the MC, made people put their hands up how how long have been in the industry and the overwhelming girth of the audience had been in the industry for more than ten years. And that's you know, that's as soon as I I think if you've been in the industry for ten years, you've seen at least one cycle. You know, let's go with that.

and you you're probably capable of holding it together. So the first part of this this section is we're seeing massive downturns or not massive downturns, but we're seeing real estate agents who haven't seen this before, remembering that we have

Kasey McDonald (26:52) Yes.

Peter Schravemade (26:52) had one of the best periods for selling houses that I have ever seen in my lifetime. a good five to six year run of rising property prices and we're doing really well. And now we've been forced to work really hard for what is

you know, what is effectively the same job. So

Kasey McDonald (27:10) Mm-hmm.

Canberra Commercial and Canberra Strata in liquidation

Peter Schravemade (27:11) there's that section, but then there's also in Canberra, I I see you know, we're seeing more liquidations. And we reported on this last week. Canberra commercials now in liquidation. the well that's on the back of the Canberra agent Frank

Kasey McDonald (27:25) Mm-hmm.

Peter Schravemade (27:25) Morella, who's been in the industry for a long Canberra Strata. you know, they're they're they're both in liquidation. I think we saw more liquidations

Did we not see four or five of them last week we were reporting on in episode

Kasey McDonald (27:36) Mm-hmm.

Peter Schravemade (27:37) twenty three? And we're seeing more and more of this in the bigger asset management class, in the bigger property property investor property area as well is the two. would you agree with that? Is that what you're seeing?

Kasey: investor lending down 40 per cent, and the agent who has never negotiated

Kasey McDonald (27:54) Yeah, I'm seeing certainly those probably on the on the first piece of the sales agents, you know, moving around. and whether that is as as I shared last week, actually, you know, kind of that merger. They've got a smaller size business, you know, the overheads of running that, staff costs, all of those things are coming into play. You know, we're not seeing those new investors come into market. I saw actually a new statistic. It's about forty percent of home loan, there's a drop.

Of about 40% nationwide of invest new investor home loans coming through.

Peter Schravemade (28:27) Hm. Yeah.

Kasey McDonald (28:28) So if if investors aren't buying, then we've got no new rental stock, so to speak, coming to market. And so therefore, then from a from a growth perspective, from a rental portfolio, how are you growing your business? You've got to then obviously entice others to switch. So our BDMs are needing to do more work in this front also.

And the same as on the sales side. so a lot of these smaller businesses and the sales agents who came into the market at what was a great selling period, as you express expressed, Pete, are now saying, wow, we actually don't know how to effectively negotiate a sale. A very good friend of mine actually did reach out to say that she's very concerned. and

wanted to know who would be the best person from a sales coaching perspective to help one of her friends who has never actually been in the industry through these downturns who have reached out to say I've I I'm struggling here. I actually have never

Peter Schravemade (29:27) Yeah. Yep.

Kasey McDonald (29:28) effectively negotiated a sale because I've never needed to. I've literally just gone it's for sale, gotten an offer, signed a contract. Like that's how easy it's been and now it's like I don't know what to do. How do I negotiate? And so that's concerning

Peter Schravemade (29:41) Mm.

Kasey McDonald (29:42) if we're hearing that on the ground.

Peter Schravemade (29:44) Yeah, agreed. Agreed. and i I I suppose it's a bit of a follow-on from last week as well, to, you know,

Kasey McDonald (29:51) Mm.

Peter Schravemade (29:51) in in the fact that there there may be some agents doing it tough. If you're doing it tough, the there are people to see. So don't let that

Kasey McDonald (29:58) Mm-hmm.

Peter Schravemade (29:58) be don't let that get in the way of of of you continuing and sort of just being you know, within the industry. There are people out there that will help you. let's move to what we've called Kasey's mailbag.

Kasey's mailbag: who really ends a tenancy - NSW Fair Trading's 85/15

Kasey McDonald (30:12) Yeah.

Peter Schravemade (30:14) Sounds like you're Santa Claus. I'm not I don't know don't

Kasey McDonald (30:16) Yeah, I know. I'm bringing the property management gifts to everyone every Friday.

Peter Schravemade (30:22) know that they're gifts. I'm reading this first story. I don't think it's a gift. What have you got in your mailbag today, Kasey?

Kasey McDonald (30:25) No, not really. Yeah. Yeah.

five, five stack stories. We'll get through them pretty quick, right? because, you know, I know there's lots been going on in this space, but just wanted to give everyone an update on the New South Wales Fair Trading residential tenancy data. And it's around kind of that termination space where they actually did a survey to release around wine, which people

Are being terminated and what those numbers actually look like. And just to give you a little bit of a data for this morning, you know, to keep your Friday all excited. But we've got 85% of tenancies have ended because the tenant actually initiated the exit. 15% were ended due to a landlord termination notice. and inside of that 15%, I just want to break it down for those stats.

About two-thirds of those were because the owner actually wanted to move into the property or because the owner was selling. And we've got 28% of that, 15% was because they probably they were moving family in instead of themselves moving in. So I guess the rest of those numbers are coming because of tenants actually breaching only 11%

Peter Schravemade (31:40) Yeah.

Kasey McDonald (31:40) due to rent arrears, which was probably a lower figure than I was actually anticipating. So

Peter Schravemade (31:45) Me too. Yeah.

Two in five property managers open to ditching the trust account

Kasey McDonald (31:46) some kind of some

data there for everyone to be looking at. the other stat that's quite interesting, and we know because we've got lots of changes around compliance and minimum housing standards, but only 10% were due to kind of that renovation or repair in the fact that it maybe wasn't at those standards. And so we've had to move tenants on to get those things done. So some numbers coming out of New South Wales around the terminations, which you know were quite different to probably what I was expecting.

Another article that actually popped into my inbox was a way around how PMs are actually thinking around trust accounting. And I know traditionally we've always managed a trust account. it's how in which we've operated. but many are actually seeing now the advantages of I guess maybe these not so much I wouldn't call them trustless because you know, behind the scenes there is still a trust account, but it's the way in which it's obviously.

eliminated particular words through these wallet type programs as well.

Peter Schravemade (32:48) Well it's not it's not operated

by them in there and you know, removes all of you know,

Kasey McDonald (32:51) Correct. Yes.

Peter Schravemade (32:53) they they still have responsi fiduciary responsibilities under the act, but

Kasey McDonald (32:57) They do.

Peter Schravemade (32:58) it yeah, but a lot of that is taken care of technology by technology through another provider who

Kasey McDonald (33:03) Yes. Yeah.

Peter Schravemade (33:05) who are holding it in trust. I I mean, yeah, we we spoke about this not l not long ago in the sales area.

Kasey McDonald (33:10) Mm.

Peter Schravemade (33:11) I think we called it deposit flicking.

Kasey McDonald (33:14) Yes.

Peter Schravemade (33:14) It's not it's not all that different. It's not all that different. There are differences there,

Kasey McDonald (33:18) Mm-hmm.

Peter Schravemade (33:18) but it's not all that different. I can see why this this would be popular to a property management company who have just been smashed with two thousand odd pieces of

Kasey McDonald (33:27) Mm.

Peter Schravemade (33:27) legislation and compliance by the New South Wales government, right? So

Kasey McDonald (33:31) Yeah, well, I think everyone's now reassessing, you know, what does it actually or how long from a timing perspective does it take us? And does our does our CRM or the tools we use allow us to be more efficient in this space? And it and maybe that isn't the case. And so it is, well, what can support us here? So is it the fact that we then don't hold it? Do we choose a supplier that can offer us some advantages here to reduce a human having to sit there and manually receipt?

Manually receipt. I know it's still done by the system, but there's still checking mechanisms. There's still pressing buttons for end of months. Whereas many of these other platforms now being released, it all does it. The tool does it for you. So yeah, interesting that we're now shifting our mindset and I think in a positive direction. Keep the good work up there about how you can shift the needle property management. Another one actually out of REINSW, I'll talk quickly on.

was around the payment redirections. and there's been some scams coming out and how and which REINSW is looking at this and Fair Trading and they've come together to put a national consultation group to look at how and which I guess scams are coming through and and in particular emails. And it's around I guess how buyers are paying the deposits, the releasing deposits. We've spoken on that as well before.

Tenants transferring rent and the owner strata levies. So they're identifying that those areas are where scams are coming. So it's not just through the emails, but it's about come those emails coming through and it might have particular ways in which those things can be paid. And that's how the scams are coming through. So an a working group has come together to review this. What's your take on that, Pete?

Peter Schravemade (35:21) Yep, good to see

good to see REINSW talking with the New South Wales Office of Fair Trading. That's that's what my take in on it is. as it as it should be, but I know it's I know

Kasey McDonald (35:28) Yes. One step one step at a time. Yeah.

Peter Schravemade (35:34) it's completely unrelated, but we've all we've been saying this year is they're not talking to each other. And this article says they're talking to each other. So if it's if it's correct, if it's correct, you got

Kasey McDonald (35:40) Yeah, it does it does, yes. Yeah.

Peter Schravemade (35:44) my thumbs up.

REINSW and Fair Trading on payment redirection scams

Kasey McDonald (35:46) Yeah, I I think, you know, for those listening as well, principles is really important here. One, you should be checking your cybersecurity insurance. What have you got around your privacy and data policies? What's your crime insurance looking like? So, you know, re revising that. But in I think every aspect, we need to ensure that we've got that phone conversation happening. If you do have

You know, a buyer, vendor, landlord, you know, changing bank details or requesting this needs to be transferred here, that phone call needs to occur to confirm that they are the correct information. I think that's the key key

Fouracre, Source Financial and InvestorKit after Dashdot

Peter Schravemade (36:22) Mm.

Kasey McDonald (36:22) takeaway here to ensure that we're not having scams. InvestorKit, they've they're a brokering firm and what they have now done is they've merged everything into be one, I guess, solution offering under

Their financial model. And they were the ones that actually have taken over the Dashdot, who we spoke about who've gone into liquidation. They collapsed and they have then taken over those assets and acquired the Dashdot loan book as well. But what they've done here is InvestorKit Group have newly formed and they're bringing together Fouracre Financial and Source Financial altogether, which has got accounting, wealth, financial, brokerage.

So they're bringing everything together to really understand or support the investor side here, to make sure that from a brokerage sense that they're able to get those loans to support wealth creation. So yeah, really interesting of this coming together to just create

Peter Schravemade (37:28) It's good.

Kasey McDonald (37:29) one solution. So they've already got all these customers

Peter Schravemade (37:31) Yeah. It's

Kasey McDonald (37:32) that they're working with, but across multiple businesses and now they're bringing it under one.

Peter Schravemade (37:37) Yeah, it's good for InvestorKit, but the you know, there's still no resolution to the mums and dads that lost all of the money in in Dashdot. And

Kasey McDonald (37:43) No, there isn't.

Peter Schravemade (37:45) you know, I'd kind of argue that that that even the even the the books that they pick up of the investors there will be slightly tainted because those people will will have had a bad experience with with investing. But yeah,

Kasey McDonald (37:55) Mm-hmm. Of course.

Peter Schravemade (37:57) it's it's good good to hear something c something positive coming out of that. you've got a

Kasey McDonald (38:02) Yeah, and I think just bringing together

their own investment strategy, I think, which is nice because there I'm sure many investors out there who, of course, you know, buy and sell and have decided to invest in the Australian property market for wealth, which is, you know, we we're experienced in that forefront. And now they've, you know, got s got an an ecosystem that can support them across all of those functions. So yeah, a positive news

Peter Schravemade (38:28) Yeah, well

Kasey McDonald (38:28) out of, yeah.

Peter Schravemade (38:31) It's super interesting because I've gone all from residential to commercial. So my my social media fleet feed is now flooded

Kasey McDonald (38:35) Mm-hmm. Yeah.

Peter Schravemade (38:37) with people who only one month ago were encouraging residential homes investment and are now saying that they're experts in commercial and you don't move that quickly, like you don't you don't go that quickly, but that's that's what I'm getting at the moment. So there's

Kasey McDonald (38:51) Mm-hmm.

Peter Schravemade (38:51) been a big shift in that area. You got one more in your mailbox, I think, and that's the

Kasey McDonald (38:53) Definitely. Yeah.

The Perth listing that showed the clutter and the AI staging, and sold for $1.25 million

Peter Schravemade (38:57) AI images.

Kasey McDonald (38:59) Yeah, I actually saw this this morning. I didn't have to have a little bit of a laugh. so of course, we've been chatting through for for many weeks now around the AI and those differences for your photo enhancements through your listings. And of course, it's you know your past experience, Pete. So I'm certainly not going to take away that I'm the expert here. But what I found, well, I I think this real estate agent in Perth has also done

The right thing and what we're sort of saying is that here's the kind of current photo and then here's what it could look like. And we've used

Peter Schravemade (39:31) Yeah.

Kasey McDonald (39:32) AI to enhance that so we can show you exactly the real life version. yeah. But ha have a have a look. Yeah.

Peter Schravemade (39:36) Holy moly, I'm look I'm looking at them now. We call that we call that clutter clutter removal. It's like it's like I'll

describe it for the people who are listening. It's like a hoarder's house. It's just full of junk.

Kasey McDonald (39:48) Yes.

Peter Schravemade (39:48) You can't see the floors or the walls or the and then they've removed all of that clutter and they've that they've beautifully virtually staged it. But it

Kasey McDonald (39:56) Ha ha ha

Peter Schravemade (39:57) is he's actually done the or she he or she has done the right thing because they have

Kasey McDonald (40:01) Mm-hmm.

Peter Schravemade (40:02) they've included

I mean even there's a bathroom in there. It's just crazy. The bathroom has like

Kasey McDonald (40:06) Yeah. You can't even see you

cannot see anything in the bathroom.

Peter Schravemade (40:11) No, it's got plants

growing out of the sink. it's it's like

Kasey McDonald (40:14) Yeah.

Peter Schravemade (40:15) and some of them like there's a bright orange wall in one of them, like just needs a coat of paint.

Kasey McDonald (40:21) Mm-hmm.

Peter Schravemade (40:22) it's very interesting. Well, and and I think the good news story about this is it sold it sold for above market. It sold at 1.25 million. So what

Kasey McDonald (40:29) It did. Mm-hmm.

Peter Schravemade (40:31) does that tell you? The the people have turned up, they haven't been disappointed because they've understood

Kasey McDonald (40:35) Mm-hmm.

Peter Schravemade (40:36) here is what the listing looks like, here is the potential.

And there's been a relevant disclosure in place that that is text, that is textbook, what I told them they should be doing. It's like, it's like someone listened to me.

Kasey McDonald (40:40) Absolutely. Yes. I know. 100%. And that's why when

I saw this, I said, I've got to actually bring this to my little segment today. Because it the listing went viral. And I think that this actually is proof in the pudding, right? That by doing that, you're not actually discouraging buyers. They packed out the inspections.

Peter Schravemade (41:01) Yeah.

Kasey McDonald (41:02) The listing went viral online. and

But they've done ethically the right thing. They and it does talk through the article that it was actually worse in terms of clutterage, and they had to

Peter Schravemade (41:15) Yeah.

Kasey McDonald (41:16) help get it to some kind of state, but it was taking too long and they needed to get it to market. So it just is what it was. So they went in and went, here's the photos of what it looks like today. And here's the potential of this home.

Peter Schravemade (41:24) Yeah, but but but what what is clutter? Like if

if I showed you a house full of clutter, Kasey, you and your husband would look at that and you would go, We can take that out. You know, like it

Kasey McDonald (41:36) Mm-hmm. Yeah.

Peter Schravemade (41:37) I'd go, Here is yes, here's what it looks like today, but if you spend one month working on this, you'll get it to here. You know, so

Kasey McDonald (41:44) Mm-hmm.

Peter Schravemade (41:45) assuming the building and pest inspection is all good, then I I like I don't I don't think there's there's that much of a deal. And

My understanding

Kasey McDonald (41:51) No.

Peter Schravemade (41:52) is they had that building in pest inspection. They were giving it to people as they walked through the front door. So perfect layup. Perfect layup. Yes, we know this is what it's got. Actually, if you want to see if you want to see a an agent who does this well, I know my good mate Brett Andreassen from Plum Property is actually he's actually featured a few times on here because we've spoken we've spoken a couple of times about how an unconscionable agent had a go at him using metadata.

way back when, I think it was in episode two or three. But he had a viral campaign last year where he basically admitted like the place is a knockout and it was quite humorous the way he did that in the video and it ended up ended up selling for good money. So yeah, what you're saying is that we should be honest about the listing. So I totally agree with that. let's go on to

Kasey McDonald (42:36) Absolutely. Yeah. Yes.

The Freshwater pink paint parking vigilante

Peter Schravemade (42:40) another one that I think is is quite humorous. I don't know if you've seen

Kasey McDonald (42:43) Mm-hmm.

Peter Schravemade (42:44) this.

There is there a link? I there's not a link I can show you, but it's appearing all over my social media. We're gonna call it the Freshwater.

Kasey McDonald (42:52) Okay, talk us through it.

Peter Schravemade (42:54) Yeah, Google on a browser,

Kasey McDonald (42:56) Okay.

Peter Schravemade (42:56) the Freshwater pink paint parking vigilante. So Freshwater

Kasey McDonald (43:01) Okay, this is interesting.

Peter Schravemade (43:02) on Sydney's northern beaches, somebody

Kasey McDonald (43:05) huh.

Peter Schravemade (43:05) there has gotten sick of cars parking over the edge of driveways. So

Kasey McDonald (43:11) Okay.

Peter Schravemade (43:11) you know how.

You know, well, especially at Bondi and well, the not that that's that's the the northern beaches, but D you know, Manly, Dee Why, those

Kasey McDonald (43:18) Uh-huh. Mm-hmm.

Peter Schravemade (43:20) areas, people will just park over the edge because they don't quite fit in. So, you know, they might have a bigger car than normal and they don't quite

Kasey McDonald (43:27) Mm-hmm.

Peter Schravemade (43:27) just fit in. So they'll park over the edge of that. And then there's

there's this person that's coming along. Are you looking at them at the moment? Are you have you

Kasey McDonald (43:36) Yes, I am, yes.

Peter Schravemade (43:37) seen them? There's a there's a person that's coming along and measuring where the driveway is.

Kasey McDonald (43:42) Yes. Yes, I've just seen that on a Tesla.

Peter Schravemade (43:42) And painting in pink paint over the car down on the tire to to s suggest that you've

yeah, you've yeah, Teslas are copying them left, right, and centre. So you've parked,

Kasey McDonald (43:51) You

Peter Schravemade (43:52) you know, one meter over. and no one seems to know who's doing it, but it's become so like there's some vigilante out there who is raging because neighbors are blocking the driveway. Now, this is technically not a water cooler conversation for a property professional.

But if you're in the northern beaches and you're rushing to get to an open home and you think it might be okay to park across someone's driveway, just bear in

Kasey McDonald (44:14) No, don't.

Peter Schravemade (44:17) mind that you might end up with a a line of pink paint. obviously none of that where I live in the middle of the bush. There's like plenty of parking segments there. But I I yeah,

Kasey McDonald (44:28) you

Peter Schravemade (44:29) I just wanted to bring it to your attention because it is happening and nobody knows who's doing it at the moment.

let's let's move on. So we've got

We've got some stories that we're not going to cover

Kasey McDonald (44:41) Mm-hmm.

Quick hits: fixed-fee buyers' agents, SMSFs to commercial, Polly the schnauzer, 3.6 per cent, Ajay Malik

Peter Schravemade (44:42) in depth today. so one out of Elite Agent, which talks about how buyers agents protected the GCI. we've got another one where SMSFs pivot to commercial and ungeared unit trusts. I guess this is what I was referring to before. Everyone's becoming

Kasey McDonald (45:00) Mm-hmm.

Peter Schravemade (45:01) a commer a commercial investment expert. that that is continuing. And this is this particular article is talking about.

How you might be able to do that in an SMSF. I and I'm very interested in that moving forward.

Kasey McDonald (45:14) Mm-hmm.

Peter Schravemade (45:15) there is an argument or a Barney going on between Queensland body corporates fighting pet laws. I know this week

Kasey McDonald (45:23) Hmm.

Peter Schravemade (45:23) that Polly the miniature schnauzer, if you you look up that that particular thing, it'll come up in a bunch of landmark pet rulings that that suggest that a a committee, a strata committee.

title committee or a management committee tried to ban a dog. that the caretaker admitted they'd never heard a bark or cry. And Polly the miniature schnauzer got her reprieve and that person was allowed stay. We've got a discussion about CPI increases 3.6% next week. There's also yeah look I I didn't include this particular article but

There was a ferocious dog attack on a

Kasey McDonald (46:07) Yeah.

Peter Schravemade (46:07) a Brisbane real estate agent this week by the name of Ajay Malik. And I I mean our thoughts go out to Ajay. I didn't include this because it was it's it wasn't in his he wasn't executing his real estate duties at the time he was on a run. But

Kasey McDonald (46:24) Hmm.

Peter Schravemade (46:24) obviously he's a member of our community and we're we're yeah, we're our thoughts are with Ajay's family and the Artier Property Group team.

Because I obviously they're doing without that principle at the moment. and the quick bites for the week. Kasey, I think we're we're almost at the end of our programme. What

Next week: First National PMC on the Gold Coast, New Zealand and the REIQ Awards

Kasey McDonald (46:42) Yeah.

Peter Schravemade (46:43) have you got what have you got planned for the coming week? Where are you?

Kasey McDonald (46:47) Well, actually, I will. Well, we both will be at the first National Property Management Conference for the first half of the week. We are on the Gold Coast and then I am heading

Peter Schravemade (46:54) we're on the Gold Coast. Yeah, we are on the Gold Coast. Yep.

Kasey McDonald (46:58) to New Zealand for the PMC conference in New Zealand. So two property management conferences for me filling up my week next week, Gold Coast and then a quick trip to New Zealand.

Peter Schravemade (47:15) Yeah, and I think I think yeah, yeah. I think

Kasey McDonald (47:17) Hahaha

Peter Schravemade (47:18) at the end of the week, I have I I I'm not a hundred percent sure, but I think I've got the REIQ Awards on next week. But look, you know, to close out the Yeah,

Kasey McDonald (47:26) Yes, sorry, I'll be there as well on Saturday. We'll see you there.

Peter Schravemade (47:30) so it's yeah, it'll be it'll be a fairly hectic week next week and

Kasey McDonald (47:33) Mmm.

Sign-off: look at AI differently, congratulations to the REIV winners, check in on your people

Peter Schravemade (47:34) and it's it's headed to that that time of year. But you know, to close out the program, I suppose if if you had anything to learn from this one, if you're you know, you're looking at

Kasey McDonald (47:42) Mm-hmm.

Peter Schravemade (47:42) AI

maybe look at it in a slightly different perspective. H have a look at what it might be doing for your agency that's a bit more productive.

Kasey McDonald (47:50) Yeah.

Peter Schravemade (47:52) congratulations to all of the the winners at the REIV awards and well done to the

Kasey McDonald (47:56) Yes.

Peter Schravemade (47:57) REIV for putting them on. felt like a really let's just put it unified atmosphere last night.

Kasey McDonald (48:07) Mm-hmm.

Peter Schravemade (48:07) and it was really good to see

Good to see so many agents celebrating the profession that they do so proudly in the

Kasey McDonald (48:12) Mm-hmm.

Peter Schravemade (48:13) in the room. but yes, if you're heading out this weekend and you've got your open houses and whatever else, inspections on behalf of Kasey and I, we wish you all the best for the weekend. And we certainly hope it's happy hunting for you out there, even though the market suggests that it's probably not at the moment.

Kasey McDonald (48:31) Yeah,

yeah everyone in Queensland of course stay dry. We're in for another drenching. Obviously the weather in Melbourne is fantastic. So let's hope that continues for you all down there. Unsure what it is like across the rest of the country. I haven't looked, but everyone have a fantastic weekend. Make sure that you're checking in with all of your colleagues, your principals, your friends. I think it's really important.

as we continue to go through different pressures within our businesses and of course within our own personal lives. So please make sure that we're checking in, check over your insurance policies, make sure you've got everything working well within your business to protect you and ease some of those pressures. But have a fantastic weekend everyone and that's a wrap for us on Before the Weekend.