Falling Demand Will NOT Close Australia’s Housing Shortage

George Markoski Australia is running out of homes. The story is the market’s softened. The headline is that property prices have gone down in certain suburbs, in certain cities. Is this the crash that everyone’s been waiting for? Approvals do not solve a housing shortage. The only thing that solves a housing shortage is actual housing. Every month we don’t catch up, we fall further behind. So wherever housing supply falls behind, demand and rents rise. Hi. George Markoski coming to you live from Positive Property, and welcome to the show. Australia is running out of homes. George Markoski Now, if you look at the headlines lately, you’ve probably seen that property market is starting to dip, and what I’m calling this is a pause, and I want to get into it, show the statistics, and show what’s going on. But really at the end of the day, with property at the moment, the story is the market’s softened. The headline is that property prices have gone down in certain suburbs, in certain cities, which is true, and this is what’s going on. So let me share what’s going on, and then we can go through this. Let me just share my screen. Here we go. I tried to go live last week when I was in Thailand, but it did not allow me to go live because my internet wasn’t good. George Markoski Good to be back. Okay, here we go. So the slowdown, what the latest data is really telling us. So every capital city is now in correction. So Perth was the last capital still standing in positive territory, and week ending 22nd of July, Perth dropped by 0.1%. So now with Perth now below zero, every major capital city is now officially in correction. So the slowdown is not isolated, it’s actually now nationwide. Buyers aren’t disappearing, but they’ve become more selective. So buyer demand has cooled. So you look at this preliminary clearance, Brisbane 30%, national 52, Melbourne 54, Sydney 56. So they’re becoming more selective. Eight straight weeks below a 50% clearance rate shows confidence has cooled across the market, and Brisbane stayed below 40% clearance rate for nine straight weeks so far. George Markoski And listings keep rising. So now sellers are competing harder for fewer active buyers. So you look at the combined capitals, it’s plus 18%, Adelaide 21%, Perth 22, Brisbane 27%. And prices are falling everywhere. So the five cities in aggregate have fallen 0.9%. Sydney 1.4, Melbourne 1.3, Adelaide 0.4%, Brisbane 0.4, and Perth now entering the first negative it’s had in quite a long time, 0.1%. So why demand cooled? Well, the cash rate has remained at this level since June, keeping borrowing costs elevated. With the RBA yet to rule out another increase, many buyers delaying their decision, trying to work out what’s going on, because the cash rate at the moment is 4.35%. Then we’ve got the Labour Party that have gone in and they’ve got negative gearing CGT. George Markoski So the federal budget now favors new build investments over established homes. As investors adjust to the new rules, demand for existing property has softened. And then sentiment. Buyer confidence remains weak. Right? And many are waiting for greater certainty. Those who can afford to wait are choosing to wait, so lots of people are waiting. People have been acting with FOMO since the boom after Covid, and what’s happened now is people now are scared, and when people are scared, it’s going to be harder for them to make decisions, so they’re slowing their decision-making down. So is this the crash that everyone’s been waiting for? Let’s look beneath the surface. Let’s find out what’s going on. The market has changed, but the fundamentals haven’t. So look at this shortage gap. Right? George Markoski The target is 240,000. So demand may have paused, but home building didn’t catch up, and Australia’s still producing 66,600 fewer homes than needed each year. So the slowdown didn’t actually close the gap. The homes exist on paper, but not in reality. There’s a big difference there, because have a look at this, right. We look at this dwelling pipeline versus quarterly completions, and look at the pipeline, the blue part. So the blue is the pipeline on the graph, and then what we’ve got is the quarterly target, which is 60,000 per quarter, and then we’ve got actual completions way down the bottom there. So almost 295,000 homes have been approved or are under construction. But this is the kicker. Approvals do not solve a housing shortage. George Markoski The only thing that solves a housing shortage is actual housing, and that’s completed homes, and this is the issue. The issue is we need real homes because if you’ve got someone that needs to live in a house, a house on paper you cannot live in. The only house you can live in is something that has been completed. And this is the kicker. The gap keeps getting bigger, right? So the Housing Accord target versus cumulative home completions. So you look at this gap, and you look at month of National Housing Accord, and what’s happening is it’s projecting out and getting bigger So every month, Australia falls further behind its housing target. So those missing homes don’t disappear, they become tomorrow’s shortage. Every month we don’t catch up, we fall further behind. George Markoski So this is so important to know, because what we’re going to do is we’re going to think and look into the future at what’s going to happen. So New South Wales and Queensland are the furthest behind. So New South Wales is 41% behind target. That’s nearly half. Queensland is 31%, and Victoria is 9%. So the largest housing shortfall is occurring where demand is strongest. New South Wales and Queensland account for most of Australia’s housing shortfall, and both have got the strongest population growth. So housing supply versus five-year rent growth. Build less, pay more. So behind target homes, Melbourne, Sydney, Adelaide, Brisbane, Perth. This is their five-year rent growth. So wherever housing supply falls behind, demand and rents rise. George Markoski One chart, one law, and this is actually consistent across all major capital cities. So basically, what happens is wherever there’s less housing supply, that actually pushes rents up higher and higher because there’s more competition. There’s a very simple thing of supply and demand. So 11,300. I explained this last week. That’s what the average renting household now pays compared to five years ago. So the pressure isn’t easing. Capital city rents over the last five years have gone up 42%. Capital city rents year to June have gone up 6% just in the last six months, and national vacancy rate is down to 1.3%. So until more homes are built, renters will continue paying the price. Now, even the government admits it. George Markoski So 11 years, that’s how long it now takes the average household to save a 20% deposit. The Productivity Commissioner says Australia’s biggest housing constraint isn’t demand, it’s the planning system. Zoning and land use rules are slowing the delivery of new homes. And if you look at the costs of a brand-new home, around about 40% of the cost of a new home is taxes. All goes to the government. So short-term softness, long-term shortage. Let’s look at that for a second. So what does that mean? Well, short term, there’s a softness in the market, but long term, there’s a shortage, and this is where opportunity lies. Because, see, softer demand and higher listings are giving buyers more negotiating power. George Markoski But that’s a sign of weaker sentiment, not that Australia’s housing shortage has been solved. So during the GFC, buyers waited. Prices recovered. During Covid, buyers panicked. Prices boomed. Today, buyers are waiting again, but Australia’s housing shortage has not gone anywhere at all. So let’s look at Brisbane, for example. Short-term conditions, there’s plus 27% listings, more properties in the market, 31% clearance rate. The long-term fundamentals, 2.8% population growth, 31% homes below target, supply isn’t keeping up, 1.1% vacancy. So what happens is today’s weakness creates tomorrow’s opportunity, and that’s the story. And this story repeats, not just Brisbane, but Adelaide, Perth, Melbourne, and Sydney for the right suburbs. George Markoski So what I’m going to do is I’m going to go through some real people, real results tonight, and then we can go into Q&A and talk about what’s been happening. Okay. Andrew and Nicole Griffiths. This is their first investment property in Graceview. Three bedroom, two bathroom, one house, $452,700 they bought it for. Now, 10% deposit, $45,270. Settled in July in 2023 for $452,700. Today’s value is $725,000. So the current profit on this property alone is over $272,000. Now, have a look at this. Caboolture, three bedroom, two bathroom, one car, $472,000. 10% deposit, $47,000. Settled in January 2024 for $472K. Current market value, $715,000. Current profit, $243,000. Redbank Plains, three bedroom, two bathroom, one car, $571,900. 10% deposit, again, $57,190. Settled in October 2024 for $571,000. Market value is $760,000. George Markoski Current profit, $188,000. So current total profit, $703,000 in three years. Oh, next two investments, Munno Para, $15,000, and Morayfield, $1,000. Okay, there we go. Let’s stop sharing the screen. Let’s have a chat. Hey, George. Hey. How you doing? Good, mate. Nice to see you. Good to see you, too. So look, so three years. So you got five properties on the go at the moment. Correct. Right. So that’s quite a few for three years. You smashed it out of the ballpark. Yeah, just following the program, and we wouldn’t have been able to do it on our own without coaching. Yeah, well, exactly. Well, I think… But what I want to do is, so how much money did you make out of these so far in three years? What’s the current profit? George Markoski What was it, 700 grand or something like that? 700 grand or something. Exactly. In three years. Something like that. How does that feel to make 700,000, part-time, because you’re not working full-time for that 700? How does that compare to saving money and working 40 hours a week? Oh, certainly wouldn’t have been possible to do, trying to save and squirrel money away. So property is certainly the way to go. Yeah. Because what I want to try to get through to people’s heads is about passive income and how assets, that investments that go up in value are so powerful because you can’t outwork them. You know what I mean? Because these properties now, they’re going to be making more money than you make in your rest of your life every year. George Markoski For sure. Right? And I’d imagine that’s a pretty good feeling, knowing that you’ve got investments that can make more than what you can ever do in work. Yeah. Certainly. And that’s the whole game plan. That’s why we’re all in it, right? So we can have property working for us, so we don’t have to work for a company and we’ve got passive income. Yeah. So tell me a little bit about you and your wife. Where do you live? What area do you live in? What do you do for a living? So it’s myself, Andrew, my wife, Nicole. We live in Newcastle in New South Wales. Nicole works at the school canteen, and I’m a technical manager for a mining company. And in my role, it’s very busy. George Markoski I cover Australia, New Caledonia, New Zealand, and New Guinea. Wow, okay. There you go. And when did you first discover or realize that property was the way for financial freedom for you specifically? Yeah. It was probably about, probably six years ago. We were living in Canada and I started listening to some audiobooks of Robert Kiyosaki, some long drives and listening to the audiobooks of “Rich Dad, Poor Dad.” And how he sort of went walking around the block and found some signs kicked over and lifted them up and found that there were properties for sale and made something of it. And I certainly didn’t want to grow old into my 60s and 70s and still be struggling and just slaving away my whole life. George Markoski And from what I learnt on “Rich Dad, Poor Dad,” it was certainly property investing is the way to go. Okay. Excellent. And how did you find us at Positive Property? So after living in Canada, I did a few courses in Canada with… But it was more to do with North America and Canada market. And then we moved back to Australia and I sort of started Google searching, who’s the reputable property investing companies in Australia and schools and all that sort of stuff. And then finally sort of stumbled across Positive Property and made a few phone calls, did some research, had some chats with some coaches, and then knew that it was a mindset thing, that you just have to make a decision rather than procrastinating about it so much. George Markoski So went in, signed up for the one year and just to sort of test the waters. I knew if I did nothing, then I’d be doing nothing. So did something, signed up, and then we ended up signing up for 10 years. Nice. Excellent. And how was your property investing journey? What was the hardest thing? What did you find the hardest thing when it comes to property investing? The hardest thing was winning my wife over and convincing her that it was a legit group and not a cult. Honestly. And then also the main thing as well, George, was you’ve mentioned it before that if you want to do something and be good at it, you need a coach. George Markoski You can’t just go out and play soccer and be Ronaldo, or you can’t just go and ride a pushbike or a motorbike and be good at it. You need someone to teach you. So I suppose the hardest thing was actually getting started and not having somebody to teach us. We wouldn’t have been able to do it on our own. But now since we’ve gone to the conferences down in Adelaide and over in Bali, it sort of certainly makes you feel reassured that you’ve got the people around you, the circle of safety, the coaches, and everybody involved with Positive Property, that you can go and ask questions whenever you need to know something. And you can’t be expected to know everything. George Markoski So that’s why it’s good to have the team around you. You can just go and ask them a question and say, “Hey, I don’t know what this acronym means. I don’t know what this means. I don’t know what to do next,” and everybody just helps you out. Yeah. And I suppose we’ve got our Thursday nights and our community, and you get to see what other community members are doing, which can give you the confidence, because getting your first one can be pretty scary. It was, yeah. For sure. You join this program, you’re like, “Okay, are Positive Property legit? Is George the real deal?” Yeah. George Markoski I wasn’t too concerned about the shiny teeth or anything like that, but it was just wondering, it seems legit, and then like I said, you just got to make something happen. You just got to be proactive in yourself and have the right mindset that you want to make something good happen for yourself. And if you’re just going to sit back and procrastinate all the time and not do anything, then you can literally do that for 10 years and do nothing. So yeah, it’s just a, you got to believe in yourself, believe in the program and the structure and Make the jump, and it’s obviously working for us. Yeah. George Markoski Well, looks like you and Nicole, Andrew, have had one success after another, after another, after another, continually going through, which is great to see. Yeah, for sure. And that our little champion at Raceview- … the first one we bought. That’s actually the first and only one that we’ve put money into. We put the 47 grand deposit on that one. And we’ve financed the next two properties in our own name from our little champion at Raceview. So, we’ve put the DOI and the deposit down on the other places- … which is just 1,000 bucks, but we’re just rolling that money over from our first property. And obviously, the SMSF property, that is standalone by itself. George Markoski But then also, once we bought that first property in the SMSF, we had this leftover money still sitting in the SMSF doing nothing. So I moved that back into Australian Super, got my employer to contribute to it, and it was getting invested through stocks and shares and all that sort of stuff. And now that we’ve bumped that up, now we’re moving on to our second SMSF property. Wow, beautiful. And what I love about that story is, so you put in $57,000 deposit, and then that property went up. You used the equity to get your next property, and then got the equity to the next property. Which- Yeah, mate … is pretty cool. That’s awesome. Yeah. It just keeps recycling. George Markoski And then once we’ve let the dust settle with these last two properties we’re doing, we’re doing a property in our own name, which is our third property in our own name, and then our second SMSF property. Once the dust settles with them, then we’ll sort of regroup, find out where all our loans and everything are, and structure everything so it’s all nice and plum again. And then we’ll- … revalue all the properties in our own name again, and then we’ll probably be ready to recycle again and just get onto property number six. Yeah, beautiful. So you’re well on your way to building quite a substantial property portfolio. Sure. And there’s not many Australians that have got five investment properties under their belt. George Markoski Especially not that quickly, like you and your wife has. You’ve done it in three years’ time. Wow. Yeah. It’s been pretty exciting how quickly we’ve done it. We haven’t been with Positive Property that long, I feel, but to have this amount of properties under our belt already, and it’s by nothing special that we’ve done apart from just following the structure in the program. Yeah. Well, I guess you’ve had the courage to follow the program and do what you need to do and take action and just buy properties, right? For sure. Because when you joined three years ago, that was what, during Covid or just after? Just after, mate. Yep, just after. When a lot of people were scared about that time. George Markoski There was a lot of negative news, just like now, as we’re speaking right now. You know what I mean? And doesn’t matter when you’re investing in property, there’s always something negative in the news talking about it. It’s the courage to do the opposite of what they’re saying. Yeah. There’s always going to be armchair experts in any field, but it’s the people that actually can prove that they’re talking the talk, like yourself, George. You got an MBA in property investing, and you know what you’re doing because you’ve got all these properties, whereas these other armchair experts, they might say they know how to do this and do that, but they obviously haven’t retired with a heap of properties under their name. Yep, exactly. George Markoski And I think there’s a lot to be said about doing something. Definitely. Now, just curious. You’ve been on this journey with Positive Property for three years, and I’m just curious about how does your future and your life look different after these three years than before those three years? I’m just curious about that. There’s certainly feels as though there’s more security now than what there was before. There was certainly a lot of uncertainty before, like why am I working? What am I doing? How am I going to plan for retirement? Why am I doing this, pretty much. But now there’s certainly more of a clear direction that this is why I’m doing this, buying the properties so I can retire early and have passive income. There’s a clear direction. George Markoski There’s no doubt about it. This is what we’re doing. So it’s certainly given a lot more clarity to why I go to work every day because I know that there’s a goal at the end of the tunnel kind of thing. And it’s also for our family, given as my parents didn’t have anything to hand to myself, they’ve got nothing to their name. Nicole’s parents didn’t have anything to their name either, and we didn’t want that to keep going on to our kids. So now with this portfolio of property we’re building up, then it’s changing our whole bloodline. We’re not going to be the people that don’t hand anything on. It’s going to changing the whole bloodline for the family. So we’re going to have these kids. Completely different. George Markoski How many kids do you have? We’ve just got the two kids. Got two kids? Okay, awesome. So they’re looking good. And I think legacy for the future generations who may not be able to buy a property is very important these days. For sure. I don’t know how old your kids are, but for a lot of kids, it’s going to be very difficult in the future. Yeah. We’ve just got a little 10-year-old and a 8-year-old. And we’ve got the Robert Kiyosaki Rat Race games. The kids ones and the adult ones. So they’re certainly getting involved in them and even playing Monopoly, just teaching them that this is why we’re doing this. George Markoski This is why we’re getting houses so we can get rent and yeah, they’re certainly Understanding why we’re doing what we’re doing, and that it’s a long-term thing, not a short-term thing, and it’s for everybody’s benefit in the family as well. Yeah. Look, when I was a kid and I played Monopoly, I loved it. And when I heard you could do it in real life, I thought, “God, I really want to do this.” No way. You can actually do this? And yeah, my friend’s like, “Oh, yeah, adults do this in real life.” And I’m like, “Wow, how much fun would that be?” So I love that. It is fun, isn’t it? Yeah, it’s a lot of fun and who would’ve known that we could do that for fun? George Markoski So that’s really awesome. So legacy for your family, your future- You bet … that’s fantastic. What would you say to people that are listening tonight or thinking about Positive Property? What would you tell them about us? That it’s worth the risk. And if it was easy, everybody would be doing it. So there is, oh, I lost for the words. You do have to do some work yourself. It’s not handed to you on a silver platter. You do have to do some work and get on the phone and call people and ask questions. It won’t just get delivered to you, but it is worth it. Trust the process. The process does work, and just believe in the system, the structure. It all works. Okay, excellent. Andrew, thank you. George Markoski Thank you for being awesome member of our community. No worries, mate. And I feel like there’s a lot of people in our community that look up to you and Nicole because you guys have done so well. You’re an inspiration to a lot of people, and it’s great to have good people like you in our program doing well. Well done. Thank you very much. Thank you. And look forward to seeing you at the Gold Coast. Absolutely. I’m going to see you in the Gold Coast there in October. You bet. Thanks. Okay, so that was Andrew, and that was a lovely story, and I really enjoyed that. George Markoski And what I was going to do is I was going to talk a little bit about, there’s this little parable about this guy who gets shipwrecked. And he’s on this little rock, and he believes in God, and he’s like, “God, please come save me.” And this boat comes past. They’re like, “Hey, do you need any help?” He goes, “Nah, nah, nah. The Lord’s looking after me. Thank you. Bye-bye.” And then this other boat goes past a day later, and he’s like, “Nah, nah, I’m totally fine. The Lord is going to be saving me.” This helicopter goes past as well, and he says no to them. And then the guy drowns, ends up going to heaven. George Markoski And there’s God waiting for him at the pearly gates, and he’s like, “God, I had faith in you. Why?” And he goes, “Mate, I sent two boats and a helicopter. What more do you want?” And the reason I’m telling this parable and this story is what happens is, this is what I find what happens with investors, right? Investors, people are scared to invest, and what people are doing, they’re always trying to find the best, perfect investment. And see, what we’re looking for when it comes to property investing, we need a property that’s good enough that’s going to double next 10 or 15 years. That’s what you need. Right? You don’t need the perfect property. You need a property that’s good enough. George Markoski Because a good enough property is going to get you there, right? Because what happens is, in our indecision, lots of times we sit there and moan and go, “Well, is this the right property? Do I really want three bedrooms? Maybe I want four bedrooms. I want it close to a school.” And you have all these excuses of why it’s not the perfect property. But this is the issue. There’s no perfect property, and everything’s a trade-off because you’re going to have the trade-off of how much money you have, what your goals are, and how to get there. And the people that do well out of property, they’re the people that get properties that are good enough. They’re going to get them to where they need to get. George Markoski Properties are going to double next 10 or 15 years. And the people that don’t make money out of property is people that sit there on the fence, look at everything, analyze it, and aren’t sure because there’s only one way to make money out of property. And the only way to make money out of property is actually having property. And the more properties you have exposed through a property market, the more money you make. So having two properties is better than one property. Having five is better than two. Having one is better than zero. Infinitely better than zero, because then you’re not making any money out of property. George Markoski And then there’s the opportunity cost, because you’re looking at a property today for 800,000, you’re like, “Oh, I’m not sure.” If you wait long enough, that property for 800 won’t be available anymore, and then you’ll be paying 850,000 or you’ll be paying 900,000. And then there’s the people that are waiting for the great correction. There’s a big group of those people right now watching. And right now, a lot of people are rubbing their hands together. Like every capital city has dropped in price now. And there’s people out there going, “Yes, finally, property prices have dropped.” And they’re going to be sitting there watching them try, watching them drop, and they’re going to keep watching, and then they’re going to drop. They’re going to keep watching. George Markoski Then they’re going to go back up again. They’re going to keep watching. And once again, they’re not going to have any property. And really, you just need property. Because I’ve been through this movie many times. We’ve been through the GFC, we went through the APRA correction, we went through COVID. And there’s three times when property prices corrected, and what did we do? We kept buying through the whole process. And what did we do? We made money through that. And the people that sat on the sidelines that did nothing, they didn’t make money. And that’s basically what happened, and that’s the way it works. So- Property investing is a participation sport and you need to participate. Very important. Okay, I want to go through Q&A. George Markoski Charmaine, if you want to join, we can do a bit of Q&A and then we’ll go into our private group. Okay, that was very quick, but there we go. Let’s have a look here, because we’ve got a lot of questions here. Okay, so I missed everyone last Thursday. I was in Thailand and I was in Phuket, and I went to go live and no one could see me. All they could see was the black box, which was pretty frustrating. So I’m glad that I’m back now. So I went to Thailand as part of a group called Boardroom, and basically I get to hang out with some of the smartest business people around the world to improve my skills, because your coach has got his own coaches. George Markoski And I practice what I preach. I tell everyone, “You need someone better than you teaching you what you’re doing.” And that’s why I pay to be in the room with people that are smarter than me and better than me. Hello, Charmaine. Welcome. Charmaine Adam Hello, I wasn’t expecting to be spotlighted. Oh, okay. George Markoski There you go. I thought while we’re here, we might as well go through the Q&A and then we’ll go to our private group. I don’t think we’ve got a lot of questions at the moment, do we? Charmaine Adam No, not a lot of questions, just a lot of comments. George Markoski Okay. Well, I’m happy to get into our private group and talk a little bit more in depth. But oh, that’s what I was going to go through. I had a question, which is a good question. I’m going to answer it now. Okay, so I had a few members, part of our program, saying, “George, we’re paying you all this money, and here you are Thursday night giving away all your secrets to the world. And why are you doing that? It’s not fair.” So I want to address that in public, because I’m going to share that. So look, yes, I share everything every Thursday, and I’m telling everyone everything. Why? Why do this? Because my mission is to help 10,000 Australians create financial freedom through property. And I’m agnostic. You don’t have to be part of my group for you to invest in property and make money, right? Because if you can get all my stuff, and you could. George Markoski You can go on YouTube and get all my videos, and you’re going to know just about everything. However, is that going to help you become successful investing in property? Maybe. I’ve had people reach out, and I’ve had people that have watched my content and have done very well out of property. But think about this. I’ve had millions and millions of people watch my content, and I’ve had three and a half thousand people join my program. The three and a half thousand people that have joined my program, every single one of them has built a property portfolio of at least one property, and have done very, very well. George Markoski Out of the millions of people that have watched me, I’ve only had 20 or 30 people message me saying, “Thank you, I’ve used your advice and made money.” Maybe there’s more out there, but the success rate is not as high when you don’t have a team around you and you don’t have access to the right properties and the right people to help you do everything. So, people that join our program, they’re not joining it for the information, because you can get the information for free. They’re getting it for implementation. They’re getting it for your curated circle of safety. They’re getting it for access to property and basically someone to help them actually go and do it. George Markoski Because at the end of the day, watching and learning and having information is not enough, is not going to make you successful. There’s a lot of information out there about anything now with AI and everything else like that, but we still need help to do what we need to do. You can watch as many videos as you want on exercise, but without a coach, you’re not going to be able to do it properly. You’re not going to get the right form. You’re going to get better progress with a coach. You can learn tennis watching on YouTube, but you’re not going to be a tennis star without a proper coach. George Markoski You can watch my property videos all you want, but without joining my program, it’s going to be a lot harder to become successful in real estate. That’s just a fact of life. And AI and content’s not changing that. And that’s the thing. Because at the end of the day, AI is taking a lot of jobs, but it’s not going to take jobs of where you give real value. So there you go. That’s what I wanted to address there and then. Charmaine Adam There’s a couple of questions. Here we go. “George, I wanted to get your thoughts if it’s a good idea to knock down our principal home and build a duplex, and potentially have my business purchase one of the properties.” George Markoski Okay. Well, this is what we’ll do. I’m going to go in and answer some of these specific questions for our group, specifically in the group, and we’re actually going to go to our private group. So everyone watching our public group, thank you so much.