Is Australia Running Out of Homes?

George Markoski Australia’s got a record pipeline, but the actual pipeline is not delivering. Nothing’s coming out the other end. And this is the issue that I was talking about. We’ve got no construction pipeline. We don’t have new properties coming in to ease this. It’s not going to ease. When you’ve got not enough supply, too much demand, you’re going to have a rental crisis. When you don’t have enough supply, you’ve got too much demand, you’re going to have property prices going up. The problem doesn’t get better. We’re not improving. We’re not going forward. We’re going backwards every year, and it’s getting worse. Hi there, everyone. I’m actually on my way to the airport. I’m flying out to Taiwan for a wedding. George Markoski And what I thought I’d do is comment on some of the news that’s happening in Australia when it comes to the property market, because I thought this should be an interesting format. And what I’ve done is I’ve pre-recorded tonight’s session already, and we’re going to be playing that. And what I want to do is just talk a little bit about the news. So let me talk about news item number one. Okay, the push to freeze rents. Housing advocates are calling for rent freezes and stronger rent controls to improve affordability for tenants. Well, rent controls failed almost everywhere that it’s been tried. If landlords can’t increase rent, what do you think is going to happen? Number one, they’re going to stop maintenance. George Markoski Two, they’re going to leave the market and go for something more profitable. Having a communist-style rent freeze, while it might seem like a good idea on the outset, and I don’t think it does, it’s just not a good idea at all. It’s terrible. That’s news item one, because less supply equals higher rents. So you freeze the rents, sooner or later, they’re going to get higher anyway. Okay. Negative gearing reforms are pushing rents higher. So after the federal budget, changes limiting negative gearing and changing CGT rules, rents have risen far faster than Treasury suspected. Well, I said this from day one. Duh, obviously. Now, the fact of it is, whenever the government does something, there’s going to be an effect, and people that thought this wasn’t going to happen were crazy. George Markoski This is exactly what I predicted and exactly what’s happening. Rents have been going up faster and accelerating nonstop. So since the government has started trying to help, the opposite has been happening, and because the government’s not really helping, that’s the problem. See, it always comes down to this. There’s supply and demand, and that equation is very strong. And when it comes to demand, demand’s a very powerful thing. And the easiest way to quench demand is through supply. No other way of doing it. You think about this. You think about illicit drugs. You think about marijuana. Now, it’s illegal to have marijuana. But there’s a strong demand, and because of the strong demand, even though it’s illegal and people go to jail supplying it, it’s happening. George Markoski Because you can’t stop the demand just through legislation or making laws. Demand is an intrinsic thing that people have for certain things. So what the government’s been doing is doing nothing about the supply and doing the opposite. They’ve been creating more demand. So what have they done? They’ve increased migration. What does that do? Increase demand. So they’re literally doing the opposite to what they’re saying they’re doing, like they always do. So it’s consistent poor government policies that have created this whole housing crisis and rental crisis. And what they’re doing is getting it worse. I’m going to show you the numbers tonight, but literally, they’re getting it worse, and it’s not going to get any better. George Markoski And the next four years is actually our supply of properties is going down, and every government policy is creating less supply. Because when you try to punish investors, you end up punishing renters. That’s just the fact of it. Okay, now, next one. Most Australians now want house prices to fall. This is what they’re saying. Polls suggest the majority of Australians want lower property prices because housing has become unaffordable. This is what I say. Be careful what you wish for. Everyone says they want house prices to crash until they own one, or their parents own one, or their super fund owns one, or there’s more unemployment. So don’t wish for housing prices to crash because that’s just erasing wealth. George Markoski Wish for more money and more wealth, more prosperity for everyone, and that’s what we should be doing. House prices are going to crash. Well, there’s a two-tier system now in Australia, which is very unusual because there’s two types of properties. One type of property is brand new, and the other one is lived in, non-new, established. And the fact of it is, the established properties and the brand-new properties are very different when it comes to your tax. And because of that, they’re going to be treated different, and therefore, it may actually mean that certain established properties are going to go down in value. I’ll tell you which ones specifically. So established properties that were very popular with investors, those properties are now not that good anymore. George Markoski But established properties that were popular with owner-occupier, there’s not that much of a change. But the thing is, owner-occupier is going to have a lot less competition. So it may ease price for established property. When it comes to brand-new property, there’s two types of people that buy brand-new property, people that want to own and people that want to invest. But the thing is, there’s going to be more people investing in properties that are brand new. So it could push brand-new property prices up because we don’t have enough supply, and now it’s going to make it even more demand for brand new. So the demand for brand new is growing. Okay, next one. Investors are villains. George Markoski What they’re saying, much of the public debate blames property investors for Australia’s housing affordability crisis. Now, this is the biggest myth in Australian property. And sure, the government loves, and the public loves to blame it on the investors. But the fact of it is, we don’t have enough properties. Our pipeline’s broken. We don’t have enough properties coming through, and that’s literally the problem. So blaming investors for a broken pipeline is wrong. What you could do is you could blame government and government policies because that’s square where the blame lies. Their policies, their tax, their immigration, all the things combined are just terrible for housing supply, and that is the problem. Investors are the solution for people to have somewhere to rent. Think about this. Who do people rent from? Investors. George Markoski So if we’ve got a rental supply crisis, what do we need more of? Investors. This is very, very simple and logical. I don’t understand why some people don’t understand this, but that’s the only place that renters can get properties from. That’s my take. And now, I’m off to the airport here in Bali. About to fly to Thailand for a Taiwanese wedding. Enjoy tonight. See you next Thursday. Bye-bye. Hello, George Markoski here, Positive Property Show. Australia is running out of rental homes. Yes. Let me give you the three numbers that I want you to sit with. 1.3%, that’s the Australian rental vacancy right now. A balanced market is 3%. In Adelaide, it’s 0.7%. Perth is 0.6. George Markoski Almost every rental in the country has someone living in it, and a queue of people who wish they were. $697 a week. That’s the national rent today, up 8.1% in a year. Wages didn’t go up 8.1%, I checked. And 112,000, that’s how many homes behind the government is already on. Its famous 1.2 million target ain’t going to happen. 21 months in, and they need to finish 240,000 homes a year. Last quarter, they managed under 44,000. And apartment buildings that took two years to build before Covid, now take closer to two and a half. And we’re not catching up, we’re falling behind, further and further every quarter. This is a train wreck waiting to happen and just slowly getting out there. George Markoski Anyway, quickly, while I’m here, I just want to show you where I am. I’m currently in Phuket, doing an event, Mastermind. This is the lagoon view where I’m at. Normally, I like to get the beach view, but the beach view was booked out. Plus, I’ve already got a beach view back in Adelaide, so it doesn’t matter. Anyway, let me keep going. So let me talk to you a bit about my trip, and then I’m going to talk to you about what’s happening in the marketplace at the moment, because it’s interesting. So last night, I had dinner with a former Hare Krishna monk who sold quarter of a billion dollars online. His name’s Jason Feadum, and he’s got 250 million in sales. George Markoski He did a launch and sold almost 60 million US without spending a cent on ads. Biggest launch in history. Now, he grew up in Mus… I don’t even know where that place is. In Iowa. Became a monk, then a rapper, then he found the thing that he got very good at. Now, I don’t sell webinars. I buy property. So why was I at his table? Because I’ve spent serious amount of money over the years buying my way into rooms with people who are better than me at something. Masterminds, flights, dinners, where I’m comfortably the least impressive person there. Some people see an expense. I’ve never ever, ever seen it that way. And here’s why it matters to you. George Markoski Even if you never sell a thing online, the room you’re in, the single biggest reason you own one property instead of 10. Think about where most Australians actually get their property advice. A male at a barbecue who bought one place in 2016 has been dining out ever since. An accountant who’s never owned an investment property in his life telling you negative gearing is a great strategy or a bad strategy. Your parents, who did brilliantly in a market where a house cost three times the average wage instead of 12. A Facebook group full of people who’ve never bought anything argue about interest rates and all these complicated, interesting strategies. See, every one of those rooms is free, and free advice is the most expensive thing in this country. George Markoski It’s cost more Australians more money than any market crash ever has. It doesn’t send you an invoice. It just quietly takes 20 years of your life and hands you one property and a mortgage you’ll die with. I know because I was in those rooms, too. I didn’t retire at 37 with a portfolio behind me, become smarter than everyone else or anyone watching this. I’m not. I did because at some point, I stopped taking advice from people who didn’t have what I wanted, and I started paying for advice of people that had runs on the board. Actually, it’s three decisions, and these are the three decisions that made the big difference. Because when I first started in property, I made all normal mistakes. George Markoski Did all these seminars, did all these different things, and I wasn’t getting the results I wanted. I bought all these properties. They were negative. They were challenging. It was tough. So this is what I call the multimillion-dollar decision that I made, and it was actually three decisions. Decision number one, what I did is decided to ignore everyone out there giving generic property advice. Decision number two, I decided I was going to work it out and really make it work. And number three, I decided to find people with real results. And that’s the key. Being in a room or being with people that got real results, not someone that’s got fake results or makes it up. George Markoski If you were going to go and learn how to parachute and jump out of a plane, what would you type in Google? Would you type in the cheapest parachute guy on the planet? No, you wouldn’t. What would you like? You’d want someone with experience, that’s done it thousands of times. But something even better. You want someone that’s helped other people thousands of times as well. Because just because they’re good at parachuting doesn’t mean they’re going to help you. So if you’re going to follow someone, get someone that’s got the real results and get someone that’s helped other people. Do I have the results? I do. I have built a massive portfolio. I’ve got over 160 properties that make me millions of dollars every year. George Markoski But not only that, I’ve helped 3,500 people over the last 20 years successfully invest in property. Every single one of them has made money. So what I want to talk about is the rooms that you’re in are the important thing, and make sure you’re around the right people. So now let’s go to the state of the nation and work out what’s going on. Here we go. Australians have gone backwards over the years. So GDP per person fell in 10 of the last 15 quarters. Australia’s been in a per capita recession since 2022. Population growth is making weaker economic performance. Living standards continue going under pressure. What this means is gross domestic product. There’s two ways of measuring it. George Markoski There’s one where you get a country’s gross domestic product, and that’s the total amount, and governments usually use that. But see, there’s something a bit more important than that, something that’s much more fine-tuned, and that’s called The gross domestic product per person. And why is this important? I’ll tell you why it’s important. Gross domestic product shows the wealth of the nation, which is fair enough, but gross domestic product per person shows you personal wealth. And as you know, I’m the personal wealth guy, and for me, personal wealth is the number we want to know about. We don’t care. If you look at the GDP of India, it’s massive, but there’s over a billion people, but the average person’s poor. So who cares, right? George Markoski What we care about is we want a GDP per person that’s going to grow because that means the average Australian’s getting richer, and that’s what I’m all about. What I’m all about is helping everyday Australians become wealthy, and we do it through property. But I’m a big advocate of increasing the middle class, helping more Aussie battlers to get over the line and become investors and become successful because I think it makes a better country. And I think when people have more money, they have more options, and it’s great. So real wages have yet to recover pre-pandemic, and they’re actually 6% below peak real wages at the moment. And this is the thing, more Australians are reporting very low life satisfaction. George Markoski It’s understandable because people haven’t got the spending power they used to be, and that’s what we’ve got to work on as a nation. Advertised rents have risen 55% since 2019. So a typical tenant is paying more than 11,000 extra each year, and renters are carrying the heaviest share of the housing cost squeeze, and housing stress has recorded a new level. And this is the problem. We’ve got no construction pipeline. We don’t have new properties coming in to ease this. It’s not going to ease, and having more migration is not going to help. So we’ve got a perfect storm of an issue when it comes to housing supply because the rental crisis is literally because of the supply and demand equation. George Markoski When you’ve got not enough supply, too much demand, you’re going to have a rental crisis. When you don’t have enough supply and you’ve got too much demand, you’re going to have property prices going up, and that is just a fact. Now, what’s happening in Australia at the moment, if you look, property prices are dropping in many markets. They are. And in some suburbs, they’ve dropped $200,000 already. What does this mean? Well, you can panic. And you can be scared and go, “Oh, no, my God, they’re dropping. I’ve got to get out of the market.” And there’s investors right now that are selling. But I’m telling you, if you’re panic selling because of the news media, then that’s just stupid. What does Warren Buffett say? “Be fearful when people are greedy. George Markoski Be greedy when people are fearful.” At the moment, everyone’s fearful. What do you do? Be greedy. I don’t like the word greedy or fearful, but what I’m saying is the sophisticated investors are still investing right now because there’s still good buying, because there’s 15,000 suburbs in Australia. Not all those suburbs are going up or down at the same time. The top 100 are going to likely do much better than all the rest of them, and that’s just the fact of it. And how do I know this? Well, during a few crises, the GFC, the APRA crisis, and the Covid crisis, that’s just three of them, but there’s another one. There’s four of them. Through these four crises, our members did very well and made money. That’s the fact of it. George Markoski So am I saying the top 100 suburbs can’t correct? Yes, they can correct, but they spend less time in correction and more time in growing, and that’s the whole point. But if you’re going to buy property, you need to buy property because if you don’t own property, you can’t make money out of property. So property is a game of owning lots of properties for a long time. That is number one way to do it. And if you get the right property, get the right structure, then that helps you hold them over that time and make even more profit. So real household income is stuck at 2020 levels. Five years of income gains have effectively disappeared. A decade of real income growth has been close to zero. George Markoski Consumer confidence remains really low, and financial stress is spreading. This is not just Australia. This is the rest of the world at the moment. And Australia is actually building 28% fewer homes than needed. That’s almost 30%. That’s like if we need to build three homes, we’re building two. And I did that on purpose. It will go like that. So only 173,400 homes were completed last year. The National Housing Accord requires 240,000. That leaves a gap of 66,000 homes in a single year. And this is the issue that I was talking about. We keep missing this target every quarter, every year. So the problem doesn’t get better. We’re not improving. We’re not going forward. We’re going backwards every year, and it’s getting worse. So we’re 112,400 homes behind target. George Markoski That’s like the equivalent of an entire year’s housing supply disappearing in less than two years. It’s crazy. And New South Wales and Queensland are falling furthest behind. So New South Wales is 41% behind its housing accord. Queensland follows 31% despite strong population growth. Victoria is at 9% behind. So every state remains behind target. And this is the other thing. 244,000 homes have started but remain unfinished. So it’s no longer just approvals, it’s construction capacity. Because what’s happening now is we’ve got constraints on supply. We’ve got constraints on labor, which is stretching out timelines and making it more difficult. And then we’ve got construction companies going broke or not even starting their approvals because it’s just not profitable. George Markoski So there’s a lot of approvals there, and we don’t even have enough approvals. But the challenge is, you might get approved for 100 properties, but when you do the numbers, you’re like, “We can’t make money out of it.” You’re not going to start it. So labor shortages, building failures, rising costs continue to delay projects. Australia’s got a record pipeline, but our actual pipeline is not delivering. Nothing’s coming out the other end. A lot of it’s not even starting. A lot of it’s getting stuck inside the pipeline, and it’s going to be really slow going. And what’s happening is a lot of builders are slowing it down because they can’t afford to finish it. So rental growth has been strongest where supply is tight. So you look at this. George Markoski Over the last five years, Perth went up 56%, Brisbane 52%, Adelaide 45%, Sydney 40%, Melbourne 37%. So more homes built, lower rent growth. And see, the rents continue to rise, vacancy staying near record lows. So if you look at these two graphs, vacancy rate and annual rental growth, capital city rents rose 6%, vacancy rates remain historic lows, and city rents are now 42% higher than five years ago. So basically, without more housing, rental pressure is going to push even more. What does this mean for investors? Even the strongest markets go through corrections. Right? So Brisbane delivered 122% growth before beginning to cool. Rapid growth is often followed by periods of consolidation. Corrections can create opportunities for long-term buyers. The market barely moves in a straight line. What does this mean? George Markoski Well, we’re going through a correction phase at the moment. Nothing to be too worried about, unless you bought the wrong property. But the fact of it is, you need to really make sure you know what you’re doing at the moment. But this is the opportunity to get into the market, because it’s so hard to get into right now, when the market’s cooled off a little bit. That’s the fact of it. Because the market may have cooled off on properties that aren’t brand new, but I’m telling you something, brand new properties, all the investors now are moving from established to new. So this is going to start putting more pressure. And what’s happening is, it’s slowly percolating through. George Markoski There’s many, many investors out there, millions of investors out there, that don’t realize what they need to do. And a lot of people are getting out of the market, a lot of people are wondering what to do. But everyone’s finding out that actually, you can just go into brand new property, get all your tax deductions, and keep along your investment merry way. And that’s going to create a two-speed economy into the property market, where it’s going to push brand new property prices up even more than what they are. Now, the thing is with brand new properties is the replacement cost is the floor. So if the land costs 300 and the build costs 250,000, that’s 550,000. That will be the floor, or whatever it is. George Markoski Because you can’t have a floor lower than the actual cost, because that wouldn’t make sense. And that’s what we’ve got to realize. So even if there’s price adjustments, there’s certain floors on certain properties that doesn’t happen. But see, on a $3 million pre-owned property, established property, there’s no floor on that. And the reason there’s no floor on that, there is a floor, but the floor is not 2.9 or 2.7, it’s more fluid, because what’s the value of that property? Whatever you think it’s worth. The land plus replacement value, because there’s a lot of intrinsic value in people wanting to live there, which is different to the numbers of land plus a house. And the housing market is not moving together anymore. George Markoski As you can see, Brisbane, Melbourne, and Sydney have diverged. So some cities are entering consolidation, others are continuing to grow. And basically, the properties that are good value, they’re the ones that are growing now. And the properties that people paid too much for, the FOMO properties, because it was in a nice trendy area and they paid too much, they’re the properties that are in trouble now. The properties where people paid hundreds of thousands of dollars more because there was 100 people at the auction, they’re the ones that are in trouble. The ones that were carefully bought are not the ones that are going to be as much trouble. And look at this. Brisbane is becoming a buyer’s market. George Markoski And funny enough, housing is actually getting weaker than units because they went up more, and therefore units have got less to correct. Yeah, so three in four property professionals expect investors to exit right now. Right. So the federal budget proposed removing of negative gearing on established homes. They’re shaking confidence across the property industry, which is interesting. I don’t think it’s going to be that high. I think what’s going to happen is you’re going to have one in four investors that are going to exit, and then a lot of the other investors are going to decide to change their strategy, similar to what we’re doing here, where you get a brand new property, and you get all your tax deductions, and it just works for you. George Markoski Because otherwise, it’s going to be very difficult to hold. So the best opportunities still remain where the supply is tight. That’s the fact of it. And tonight, we’re going to be going through a case study with Peter and Isador Mulligan. Charmaine Adam All right. So welcome everybody. George asked me to step in. He was meant to go live tonight, but we’ve had some technical issues, so he’s asked me to step in. And we’re going to bring up Peter and Isolde’s success, and here’s Peter here. Kimberly, do you want to bring up the slide so I can just share a little bit of Peter and Isolde’s success? Here we go. That’s a beautiful picture of Peter and Isolde. So I know we’ve got Peter here today as well. Charmaine Adam So they bought an investment property in Raceview. They purchased it for $452,700. It was a three bedroom, two bathroom, single lookup garage, and there’s a nice picture of it there. So they put a 10% deposit using equity, so that was $45,270. They settled in August of 2023 for $452,700. This property was purchased in August of 2022. As of the 2026 market value, it’s $705,000, with a current profit of $252,300. Peter, tell us a little bit about how you got started in property investing and why you chose George and Positive Property. Peter Mulligan I got started in investing before Positive Property, with some properties outside of Positive Property. That was about 10 years before I joined, and nothing much happened, and was looking around for a way to start that again, because recognized the value of that. And came across George, and then said to Isolde, I was quite worried about that, because it’s something off the internet, it’s a person which I wasn’t very familiar with, and all those fears about this could go horribly wrong. But we spoke, and we were impressed with the product, and impressed with what we thought was possible, and we’d done our due diligence and looked at other organizations and other people and thought Positive Property was the people to go with. And that’s been very good since then. Charmaine Adam Fantastic. And walk us through your process when you were purchasing Raceview. What was that like with the support, the due diligence, and the information that was provided that really helped you to make that decision? Peter Mulligan It was very good. One of the reasons which had held me back from investing in property was not knowing what to do. The team, yourself included, if I can say, held our hands and walked us through every single step, so it was very easy. It was very clear what we had to do, when we had to do it, and why we had to do it. Charmaine Adam And now, fast-tracking now, how you feel about your success, and what have you learnt along the way that could carry on to others that may support them in their investment journey or help them to see there the benefits are? Peter Mulligan I think we have, I feel, been successful. We’ve done well. It’s helped secure our future, and it’s helped provide a legacy for the kids. So that’s all been very positive. And I think what we’ve learnt is you need to be involved. With that said, we’ve just retired, so we’re sitting a little and working out our next steps. But Isolde is kind of pushing that we continue purchasing properties- Yes … even though we’ve retired, and we’re just working out between ourselves how we might go that. So my suggestion would be that you purchase properties if you can. I think it’s worked for us, and I think it’s worked for the people that we’ve seen on this program previously. So I think it’s a good thing. Charmaine Adam And yeah, through your investment journey with Positive Property, did you have any challenges? And if so, how did you, or how did the team support you to overcome them? Peter Mulligan We’ve had a number of challenges. Raceview was very smooth. We’ve attempted to buy some other properties, and that hasn’t gone well from our perspective, and that’s not been an issue with Positive Property, that’s been changes in working circumstances and things like that. And through those things that happen in life, the team has been there to make sure we recovered our monies, because we paid our deposit, and they’ve helped us stay on track and not panic through those times which were difficult for us. But in terms of going through Raceview and that, there were no concerns or issues, or everything was, as I said, clear, fine, and rational. It was very good. Charmaine Adam And just, if someone was sitting on the fence of whether they should work with Positive Property, what would you say to them? Peter Mulligan I would say you should do it. If you sit on the fence, you’re on the fence, you don’t have a property. And it’s uncomfortable. Make a decision and go with Positive Property. Charmaine Adam Fantastic. Well, let’s move into our private group now. Thank you so much, Peter, for sharing. Thank you. Peter Mulligan Thank you. Charmaine Adam I really appreciate your time. And let’s move into our private members group