Government policies and property market dynamics

Transcript

Peter Fletcher

[00:00:00] Peter Fletcher: Welcome to the WA Property Q& A, the podcast where I explore the ins and outs of buying property in Western Australia. I’m your host Peter Fletcher and each week I interview local property experts to help you to develop a deep understanding of the nuances of buying property in WA. From markup trends to legal considerations, no topic is off limits.

But before we dive in, a friendly reminder. While we provide valuable information, it’s important to note that nothing discussed in this podcast should be construed as personal investment advice. Always remember to seek the appropriate professional advice for your specific circumstances. Now let’s get started and unlock the secrets to successful property buying in WA.

Well, welcome to the podcast, Rob Mandanici.

[00:00:54] Rob Mandanici: Thank you, Peter. Thanks for having me.

[00:00:56] Peter Fletcher: This is your second run on the podcast. It is,

[00:00:59] Rob Mandanici: and I haven’t seen the first one, so, haven’t you? No. It’s out there, I’m sure. It’s out there. We’ll have to publish it somewhere. No, it’s published. I’m sure it is. I just avoid looking for myself, I think.

Come on, you’re a real estate agent, you’d love it. Oh look, it’s yeah, it’s hard to look at yourself sometimes, I think. Come on, when you’re as good looking as you. Oh don’t now you make me shy, you make me blush.

[00:01:25] Peter Fletcher: Now, Rob, last time we were on, we spoke about the difference between, because you’ve operated in both Perth and Melbourne markets, so you have quite a unique perspective on those differences.

But this time, I want to talk about I’m going to say the challenges faced by the real estate industry. And I note, and I’m particularly interested in your perspective because you are a REWA counsellor and you are the treasurer at REWA, is that, or the chair of finance and risk. That’s the one. Is that right?

Yes. Which is basically the treasurer at REWA. So you have a fairly significant influence in the way things take shape from here. And you have a voice around the table at the pointy end of the industry. Fair assessment?

[00:02:26] Rob Mandanici: Yeah, I think so. Yeah, very fair assessment.

[00:02:29] Peter Fletcher: Mm hmm. Okay, so, what I want to know is what are the main challenges you see, is being faced by the industry right now?

[00:02:41] Rob Mandanici: I think change. I think, the timing’s excellent. We’ve just come off the back of Monday’s changes in the Residential Tenancy Act. And I think that just highlights, one area where you know, and I’m going to go into bat for Ree, we’re here, and sort of say a strong, Advocacy body like REWA to go into BAT for its agents, for its agent members, its property managers, and its sales reps especially when it comes to a big change piece.

So Residential Tenancy Act I guess the changes right now don’t look like a lot. And I think it’s almost this piece of sort of reminding people that the changes don’t look like a lot on Monday, the changes we’ve just had because the list of changes started at around 200 proposals that within, whittled down into, half a dozen Key items really, ultimately that’s what it came down to.

And I think really, embrace the change. Change isn’t all bad because you can influence that change along the way.

[00:03:36] Peter Fletcher: What are the changes that we could, let’s talk about the residential changes to the Residential Tenancies Act. Can you give us some highlights there?

[00:03:46] Rob Mandanici: So. The changes that have happened or the potential changes that never happened.

[00:03:50] Peter Fletcher: Well, let’s go with the changes that happened. And then let’s have a look at the ones that didn’t get through.

[00:03:56] Rob Mandanici: The key big areas of course are and I sort of preface this with most changes still require. From the changes, most activities still require the landlord’s or the property owner’s consent.

With limited grounds to say no. Pets is one. So, pets are now allowed in almost all properties. That’s probably a key plank here. The second one is changes to rental increases. So, a rental increase every 12 months, as opposed to The ability to have done a rental increase every six months.

That’s another sort of key change. And I guess the changes around the way bond disputes or bond disposals might be handled and sort of a mediation or conciliation process from there. So they’re probably, I think, the three biggest key changes of the of what came into force on Monday.

[00:04:43] Peter Fletcher: So you fought for so the, Rents can only be increased every 12 months rather than every six months.

Is that a benefit to the tenant, do you think, or are they just going to get hit with bigger increases at the end of those 12 months?

[00:05:00] Rob Mandanici: Look, I think you could look at this either way. You could say that there’ll be a delayed gratification for want of a better term from a property owner’s point of view that say, if they were considering a 20 increase in the first six months or after the first six months that they might consider a slightly larger increase at the end.

I think from everything it’s more of a certainty piece now. I think and this was a bit of a shock for me coming to Western Australia, nearly what 13, 14 years ago now. Entering into a lease that could be increased mid term, and that was actually quite a shock. Coming from a jurisdiction where that wasn’t normal having previously rented before elsewhere where that wasn’t normal, and I think that now it’s more of a certainty piece.

It sort of says to a tenant, you’re signing a fixed term, and for that fixed term, your rent’s not going to change. On the flip side, I don’t think you’ll find a tenant that doesn’t agree, as costs rise, rents should rise and, conversely, As costs fall eventually, that rents should follow.

So, market to market, I think, and I think it’s probably going to influence leases more to be more in line with market than just an arbitrary set of increases because the lease says so, more than anything.

[00:06:08] Peter Fletcher: Pits in rental properties. You’ve said that they are now allowed. Can a tenant have a rottweiler in a two

[00:06:17] Rob Mandanici: bedroom duplex?

So, this is a real polarising one, the pets in properties, and I think that’s I think that was always going to be a polarising one regardless of what framework or legislation was put around it. So look, there’s, I’ve always said all along My view around tenants has been, tenants, the pet owner, the pet’s owner is the best judge of what property is most suitable for the pet.

And, by and large, overwhelmingly pet owners are responsible people. Pet owners, have a great responsibility to their pets. And I would think a massive rottweiler with a heap of energy. You’re probably not going to find a pet owner

that wants to put that in a small two bedroom duplex but, in saying that, the landlord does have some rights to say no.

More importantly, they have rights around reinstatement to sort of say, well, yes, with conditions. The pet the property owner might also say, look, One dog or one cat is okay, but multiples, I’m not too keen about that. Now look, if the tenant wants to push back, or the owner, they can then go to the Commissioner for determination, and that probably leads us to that conciliation process, which doesn’t quite doesn’t always mean just for bonds.

It can mean for other disputes, for example, if a property owner says no to a pet, or if a tenant, believes the response has been excessive, or wants to press the case further. Thanks a lot.

[00:07:32] Peter Fletcher: So they can take it to conciliation for, through the Commissioner?

[00:07:37] Rob Mandanici: They can, yes. What that process looks like right now, we’re not too sure.

[00:07:41] Peter Fletcher: I’m thinking the Commissioner’s going to be very busy.

[00:07:43] Rob Mandanici: Well, yeah, look, Commissioner in name, I think. It’s there’s a few people under the Commissioner herself that will that will coordinate and adjudicate these. Look, it’s what are we, Fire, we’re the fifth day in of the new legislation.

I’m not aware of anything that’s gone to the Commissioners just yet for determination. But I’m sure my colleagues will.

[00:08:00] Peter Fletcher: Same deal with minor repairs or minor renovations?

[00:08:05] Rob Mandanici: Correct. So, oh, and just to touch on the pet one there there is still one blanket no, and that is if there is a strata by law or in a strata scheme that says, the No pets then no pets will apply.

So, the Strata Law will override the residential tenancies on that occasion. Yeah, minor modifications and there’s a full detailed list in the regulations of what a minor modification is, but effectively things like vegetable gardens, veggie patch, planting things in the garden Paintwork paintwork is considered a minor modification yeah, hanging picture hooks, those kinds of things

additional curtains and, a few things like that around other additional locks and security cameras, your ring doorbells and things like that.

And the landlord can impose rectification requirements there as well, that maybe it’s done. In a professional like manner or rectified by a professional, for example, painting and then that would be considered fair and a fair response.

[00:08:58] Peter Fletcher: These things have to be done by a tradesperson, a suitably qualified tradesperson, is that right?

[00:09:04] Rob Mandanici: Yeah, if the requirement is, for example painting, not necessarily but the landlord could stipulate and the landlord and tenant could come to that agreement. Installing a security camera may not require a qualified trade but to be done in a tradesperson like manner, I think is the term that a lot of property managers, like to use.

[00:09:24] Peter Fletcher: What sort of things didn’t get up? What sort of things did REWA fight against to or lobby against?

[00:09:31] Rob Mandanici: So I think the biggest one is, look, the primacy that, It’s the tenant’s home, but the property owner is the owner and the biggest one always is ending the lease and the right for a property owner to end a fixed term, when it comes to its fixed term.

I think that’s a key plank. There were a few wild proposals out there to do away with leases completely. So, a lease would commence without a fixed term. That a lease would simply be a lease in perpetuity until ended. With a very limited suite of reasons to end a tenancy. It might have been a sale, a family member moving in or some other form of hardship.

And that applied both ways. And I think when I’m going to say we now and, I don’t want to speak out of tone with my board colleagues or my executive. But I think when When REWA went out to market and even spoke to tenants, a lot of tenants feared that option as well because tenants want security.

They might have a job in a certain area, they have other commitments where showing that they have a fixed place to live is important. Now think, we have a lot of tenants who also own property. In order to get loans, they need to show that they have lived or may continue to live in a certain place. And I know from my own experience, kids in school, certain schools want to see that you live in the area.

Certain schools want to see that you’ve got at least X number of months or weeks, 10 year left. You’re not just I’m not suggesting people do this, but, some schools have rules and, they try and stop that people might, suggest they live in certain suburbs where they don’t just to be within certain boundaries.

And there’s a lot of schools where. They’re very strict on that so and they want to see that. So the feedback overwhelmingly seemed to be from owners and tenants that both wanted a form of security, and that was very important. And, that’s just one aspect, I think, of things that people may not see in advocacy.

You only see I guess the wins that have materialised, or the legislation that’s materialised. And a lot we’ll never see behind the scenes the hundreds of hours that goes into that at all levels.

[00:11:25] Peter Fletcher: What are the key advocacy pieces that, that’s going through REWA right now?

[00:11:30] Rob Mandanici: So, look. I mean, it’s no secret there’s a sort of a third round of reforms around residential tenancies but some of that’s going to be more around minimum standards. So and look, I probably liken some of it to most people, the term sucking eggs. It must have a door, it must have an oven.

It must have running water. And really that’s more of, I think, a consistency piece around a national framework where other states have introduced similar sort of baseline requirements. And I think in WA we’ve always done very well, in respect to that, we’ve always had strong legislation around smoke alarms.

Blind cords, we’re one of the first jurisdictions to introduce regulations around choking hazards, blind cords deadlocks and other locking mechanisms. So, that’s not going to be a big leap, I think, for a lot of investors and tenants. Commercial tenancies there was a review underway, but that just seems to have not so much fallen by the wayside.

But, with the election coming a lot of legislation tends to get put on the back burner. And then really a lot just generally around the housing piece. supply constraints how do we get more supply in the market? What do we do for first home buyers? We’ve had another great key blanket reword that the government has taken up, and that is linking the key start thresholds to the median house price.

So again, we continue to sort of push that narrative that and I guess that’s validation of the narrative that, REWA’s data, REWA’s medians, they’re spot on and we’ve got trusted data that feeds in real time from our members and, we can

always be on the forefront with government about that data and, how we can link that to things that help home buyers, tenants, owners, sellers and everyone transacting in the marketplace.

[00:13:09] Peter Fletcher: I spoke to Antonia Maccarelli, I hope I’ve got that name pronounced correctly, CEO of REIQ, and at RE Bar Camp in Brisbane. We spoke about the importance of The award system in terms of communicating the values of an organization, in their case the REIQ. What’s your thoughts around the, the award system here in WA?

Is there anything being done there to take that in any sort of different direction than what the, what it is now?

[00:13:46] Rob Mandanici: So, in terms of awards to agents?

[00:13:48] Peter Fletcher: Yeah, awards to agents, yeah. No,

[00:13:50] Rob Mandanici: that’s okay. Sometimes I have another industry hat. Yeah, yeah, not, not. Employment relations. Yes. So, sometimes we’re talking wages or or prizes.

Look I think Look, I think it’s always a contentious one. I think look, REWA has a very strong award system. We have sort of two categories of rewards, what we might call the REWA. com awards, which really are numerical awards. In theory it’s what’s what’s reported online, what’s settled with Landgate.

And they’re sort of, top agent awards, turnover awards, number of leases and categories like that. Then we have what we call the Awards for Excellence, which are, effectively, written submission awards where you or your colleagues might write in and nominate somebody for a particular category, whether that’s, say, around issues of sustainability and how that applies to the agency or the practice all the way through to, top level awards.

Top, large agency, medium, small, boutique and how you operate in your marketplace all the way through to community based awards. So, what is an agency doing inside the community outside of selling property? So look, outside of that, I think there’s other organisations out there that offer awards.

The funny one I always find in my area, which is very close to your area, Pete there’s a lot of top agents. Everyone seems to win the same award sometimes with some organisations. So, it’s always I think there’s six agents in my street who are the best agent in my suburbs.

So, I think you just got to look behind the curtain and just see what integrity measures sort of sit there around these awards. I think that’s key.

[00:15:12] Peter Fletcher: So if in years past, the grand master salesperson was somebody that sold north of what was it, 10 million or 20, if now everyone that sells more than, more than 10 million, you’re lucky you’d start reading the awards list at 5am and you still wouldn’t have it finished by the time.

[00:15:35] Rob Mandanici: That’s right. It’d be a three day gala.

[00:15:37] Peter Fletcher: Yeah, yeah. So what, what’s being done in that space to sort of make the, the awards? Is there anything being done in that space to make the awards more meaningful?

[00:15:47] Rob Mandanici: Look look, there is, and look, I don’t have the numbers with me today, but we’ve certainly shifted the needle or REWA has shifted the needle there in terms of, Sort of the top percentages and the cut offs.

So really I think it sits around sort of like a top 1 percent now. Yeah, it used to be a dollar value, but look, obviously now with the rise in the value of commissions, I guess off the back of the rise in house prices. Higher turnovers in relation to just dollar values. Now that doesn’t always mean that there’s agents, and I’ll probably cop some flack for this because agents will say, but Rob, turnovers are lower because we can’t get stock and there’s less listings in the market.

Absolutely right. But some of those top agents are still achieving top prices and pushing that category higher and higher. So, over time those cut offs do get adjusted and raise that bar just a little bit to ensure that. We’re not running a three day event that the list is not as long as your arm.

So, but you know, it’s also important to recognise those Grandmaster, Master Agents and other categories as well. Everyone gets a recognition. It’s really who’s sharing the stage, I think. That’s where it, gets trimmed a little bit because otherwise we would be there all night.

[00:16:49] Peter Fletcher: Mm mm

Rob, The Rewa have a, like a, shall we say, a complaints line. What’s the, some of the things that, that, that are on the minds of consumers now? What are the main areas of like grievance, public grievances?

[00:17:06] Rob Mandanici: Yeah, so REWA runs an excellent public advice service. It’s it’s staffed by professionals and volunteers so paid paid professionals in house with a lot of knowledge as well as volunteers just, agents, practising agents coming in, lending their time and lending a few hours a week to the service.

The public welcome to call. Anyone dealing with a member agent is welcome to call. I think look, top of the list and again, I haven’t reviewed this for a while, but I think top of the list will be generally tenancy complaints, followed by buyer complaints. Now, interestingly less landlord complaints and less seller complaints.

And I think that’s, and we’re probably leading down that path there of, The unrepresented parties are generally the ones picking up and looking for more advice. And it’s not always that the agent has done something wrong or the landlord or the seller but it really is quite often that unrepresented party.

So that buyer or tenant just looking for guidance and quite often it’s calling through and, maybe not understanding a contract term or what something means, or they’ve been told something by the agent or their landlord, for example, I actually had a client call me this morning.

She said, Oh, a friend of mine wants to break lease and the agent has told her X, Y and Z. Is this true? And that’s probably the type of question by and large that comes through. It’s really just looking for guidance more than anything.

[00:18:23] Peter Fletcher: So the main complaints come from buyers and tenants who, as you’ve just said, aren’t represented.

REWA represents They’re members and more sort of property owners while they’re members, which represent property owners. What is being done in that space to, to represent buyers and tenants? Like you’ve got to give those groups a fair go.

[00:18:53] Rob Mandanici: So look, I think from the outset, REWA represents all member agencies and, member agencies encompass agencies that act as agents for sellers for their landlords, but also we’ve seen a rise in agencies either exclusively or within their business have buyer agency representatives tenant advocates and tenant representatives very popular in the commercial and industrial space, so extremely popular to have a transaction where both The seller and buyer are represented or even more so that the lessor or the landlord and the tenant are represented.

So that’s very common in commercial transactions and especially middle to larger commercial transactions. We’re seeing a bit more of that in the tenant space, especially where we’ve seen, we’ve had relocation agents in the past and now we’ve got tenant advocates representing tenants, especially in challenging markets like.

Perth and the suburbs and of course, buyer agency, which we’ve seen an upsurge in that. So really, REWA’s role to represent all member agencies. On the other side of that, look, REWA does a lot of communication pieces out there to the general public. So again, information pieces, informing the public informing the public that, they have a right to representation.

If the tenant wants to go and get represented, absolutely. The same as a buyer in the market, the role of a buyer’s agent and what they do. They’ll do, all the way through to, in our REWA weekly, articles from how to bid at auction, which to a lot of us might seem very simple.

You turn up, you put your hand up and it’s the last person standing or the person with the biggest wallet. But there’s often a lot of encouragement pieces in there and, to give people, buyers and property players out there that confidence to, to bid or how to fill in a rental application.

So, REWA certainly provides a lot of advice for the unpaid. The unrepresented in the transaction but also how to get represented if they want to as well.

[00:20:39] Peter Fletcher: A lot’s been talked about the affordability piece. Does REWA have a, a duty here or is that a market thing?

[00:20:51] Rob Mandanici: Look, look, from a personal level, I believe in a fair market.

I believe in a level market but the reality of that is we know that, in a market. Or, in the business of government, governments need taxes. Now, personally, if I could wave a magic wand tomorrow, I’d love to see the abolition of stamp duty full stop. It’s a terrible tax. It’s regressive.

It’s horrible. The reality is, however, we know taxes to fund the things that people like. And the things that people need, whether it’s education, health, et cetera, roads and what not. So, we know that’s where a lot of our property taxes go. I think it’s it’s really about making those fairer and, making, understanding people need to pay taxes.

Property Tax. But how do we make that more accessible? So whether we’re looking at a New South Wales system of a a an annual instalment around stamp duty as opposed to that one big hit that’s something that could be done around the affordability piece. Obviously Continuing to pressure the government around trimming stamp duty, especially for those that can least afford it, which is your first home buyer.

And downsizer rebates, perhaps. Looking at saying, someone in their 60s or late 60s or late 50s looking to downsize has probably in their life transacted a lot of property. And paid their fair share of duties over the years multiple times and saying, well, is there something we can do on a concessional basis for those people that paid their fair share?

And it might be time to give something back to them as well. So there’s two segments of the market.

[00:22:18] Peter Fletcher: Got to look after the boomers, Rob.

[00:22:19] Rob Mandanici: Mate, look, look, I’m probably going to cop some flack there too and say, they’ve had it well. Some will say that. And others will say they’ve really paid their fair share.

It’s not denigrating any segment of the market. Everyone works hard, pays their taxes. Look, no one but I think stamp duty is really one of those sort of, thumb to the eye taxes that’s like, it’s a big whack. And obviously the more you pay and as our market continues to increase, that bill gets higher and those tax receipts get higher and people sit back and say, well, what am I getting for my money?

And I think that’s the important part.

[00:22:50] Peter Fletcher: Has REWA landed at a position with regards to stamp duty and that deferment of stamp duty model?

[00:22:57] Rob Mandanici: Yeah. So look, REWA’s always had a position in terms of duties that duties should be reduced or relaxed or having that sort of, concessional outlook, whether it’s downsizes or sort of pushing that piece that, we can do Okay.

I’m not sure how much detail I can go in here. REWA yesterday did endorse its state election policy. However, I’m I’m not or state election platform in relation to property taxes and and the property industry sort of going forward. I’m not

too sure how much of that I can go into, but I can certainly say We’ll, we’ll just say watch this space.

Yeah, yeah, watch that space, but certainly look, we’ll Definitely continuing to push for, lower taxation, smarter indexation and really tying things back to those medians to sort of say, well, it’s good for Keystart. It might be good for other areas of of property and government.

[00:23:42] Peter Fletcher: Mmm. Fairer. Mmm. Mmm.

[00:23:46] Rob Mandanici: So it’s not no tax. It’s a fair application.

[00:23:50] Peter Fletcher: What about supply, Rob, does REWA have any leverage when it comes to switching the supply of, let’s say, vacant land or apartments? Making that happen.

[00:24:06] Rob Mandanici: Look, REWA’s leverage there is being a voice and being an advocate. I mean, as much as some people might think outside and inside of REWA that we’re the regulator.

I mean, we’re not. But we’ve certainly got a strong voice around the table in encouraging government. And look, credit’s the government. They have done some good work. positive things in terms of supply. We’ve got the scheme in place in relation to Airbnb to take those Airbnb out of the market.

Now, it’s not a lot of homes. Everything we do We’re never going to have a one size fits all solution, I think, collectively as a property industry, and I’m lumping government in with that as well, and I’m going to be kind to them here for a moment, and sort of say, well, look, at the end of the day, everything’s a one percenter, so whilst people will look at policies like the the Airbnb policy it’s a one percenter and it’s taking a few properties out of the short term market and putting it into the long term market.

Now, that may not have an effect on In large suburbs, but in some small suburbs and small regions, it has a massive impact. The same with the Keystart package. It’s not for everyone. It’s for first home buyers. It’s for people on certain income thresholds. But they’ve tweaked those now to make it accessible to more people.

One key stat that I learned from our statisticians last week was the Keystart has seen a three hundred percent increase. 80 percent increase in inquiries for the product since that tweaking was announced only a few weeks ago. So, that’s a massive impact on someone and, that’s the difference between someone, someone with a small family, on, on a single or two small incomes saying, I can

now switch from the rental market to the housing, to the ownership market, freeing up one more rental home in the market for someone else to come in and take that home and get a start themselves and then hopefully move into that key start program.

[00:25:52] Peter Fletcher: Mmmmm.

[00:25:54] Rob Mandanici: So, two small areas, they are one percenters but it does have an effect. That’s a bit like what’s that comment about is it Pantene? It won’t happen overnight, but it will happen. Wow, that’s old. They need to do more. They need to do more. I showed my age there.

[00:26:09] Peter Fletcher: Yes, yes, yes. So the market at the moment is very robust, shall we say.

What’s going to change that?

[00:26:22] Rob Mandanici: Look, I we’ve just had some inflation data come out on, what, Tuesday? Wednesday? I think the the bears were looking for a trim mean of 1. 1, the bulls were looking for a trim mean somewhere around 0. 8. Well, we got under one. So, suddenly, I think it’s the moment that data came out.

Now talking about selling, we don’t sell a lot in our business enough to make the Million Dollar Club. I think that’s I got that email this morning I don’t even keep track of that one. Look, we have a prominent rental business, we sell what falls off the rent roll. I’ve got one property on the market at the moment, which was very slow until that CPI data came out because that data was a signal to people that the RBA, at this month’s meeting, may not raise rates.

So it was invariably on track, a little bit above, one figure was a little bit above the estimate. The other one was a little bit below the forecast. But I think that’s sent a signal to the market that it’s for another 30 days it’s business as usual. So I think at the end of the day people are taking these cues and I think taking it one step at a time.

Look, if rates went up another 15, 25 points, psychologically of course it’s going to have an impact. The RBA tells us there’s still a lot of personal savings out there that for, for better or worse, apparently can take a hit. I mean, no one wants to take another financial hit, there’s no doubt about that.

But the West Australian market, Just talking exclusively in WA, extremely robust, extremely fluid still. So, those, those cues and signals, I think, are really

important to watch. And the phone and inquiries on, on, on what we’ve got on the market this week went hot from the moment that that CPI data came out.

[00:27:58] Peter Fletcher: There’s some talk about the rental markets. Softening. Your thoughts?

[00:28:04] Rob Mandanici: Look, it’s softened a little. Not in terms of demand, but in terms of pricing. And again, very suburb dependent. So, we look at some of the inner suburbs. So, inner city, apartment market, on fire. Especially Older, larger apartments. So, East Perth, think of some of that stuff built in the late 90s, early 2000s, those big two and three bedders with two car bays.

The ones they just don’t build anymore. Going hot. Absolutely hot. Families moving back into the city students gearing up for next year surprisingly we’re dealing with a lot of students who don’t want to live in residency anymore. A little one, a little studio flat on campus and want to come out to something larger.

Outer suburbs, still reasonably buoyant. In the inner suburbs some of the homes that were probably priced in the 950, 000 range, they’re abating a little bit. They’re still renting but they’re renting for less. We’re seeing landlords in that band less inclined to give rental increases.

Those pre Monday leases on on six months reviews, a lot of those less inclined to give mid market reviews, acknowledging that Perhaps a quality tenant is better than no tenant so keep the tenant happy, work hand in hand and maybe forego that 50 or 100 review that might’ve been warranted in 22 or 23 but in 2024, now looking at it and saying, look, you know what, we’re all copying it in costs, tenants, owners, insurance interest rates, you name it, council rates but my tenant’s copying it as well.

So, Go easy. That seems to be the message that sort of comes from those inner suburbs. Some of the outer ones, probably still a little bit of growth to go but we are seeing still softening in prices where tenants are saying, Hey, look, we’ve hit the ceiling. But ultimately there’s still a steady demand.

[00:29:52] Peter Fletcher: Will this reduce the demand for investment properties?

[00:29:59] Rob Mandanici: I don’t think so. And my opinion on that is because yields in the traditional places of Melbourne and Sydney are extremely low to non existent. There’s somewhat a yield in Melbourne. There’s very little yield in Sydney. And the further out you go, I mean, look, we talk to interstate investors

quite often and, their attraction to Perth is they get the map, they go on a Google, they draw a line and they look at it and go, Oh my God, that’s an hour’s drive in Sydney or Melbourne and I’m buying something 20, 30k out and that’s nothing. And think 30k, 40k north, you’re still close to the beach. Now it may not be the ideal suburb for some. Some look at it and go, no, it’s not. For me, that’s a lifestyle option, alright, I’ve got to contend with the freeway, but when I get home, I’m 7, 10, 15 minutes from the beach, on the flip side, south, it’s the same, or the river so people still look at Perth and say there’s a lifestyle option and investors are the same, they look at it and say, gee, Perth’s still booming. You can get around your roads, you can do this, you can do that, and my goodness, your They’ve still got money.

You can afford to elevate rail lines and, still maintain your roads while they’re reassessing their life choices about decisions they might have made 10 years ago in relation to rail projects Commonwealth Games, you name it, they’re all getting pulled at the minute in various East Coast cities.

Hmm.

[00:31:22] Peter Fletcher: If you could change One thing about the way real estate in WA is practiced, what would that be? Wow,

[00:31:31] Rob Mandanici: that’s look for the record, they’ve all been without notice, but that’s probably the that’s probably the most challenging question I think I’ve had. What would I change? I think I want to change people’s perception the mindset that real estate agents don’t come from a bad place, that actually, by and large, real estate agents are people that want to help people.

No property manager gets joy in delivering a rental increase notice, whether it’s 10 a week or 100 a week. Now context is everything, 10 on a 400 a week property or 100 on a, on an 800, it’s all the same. No property manager takes joy in that. So if I could change the public perception that the PM is not out to get somebody.

On the flip side, the selling agent That the public need to know that the selling agent needs to do the best job they can by their vendor. And that is best price, best terms, sometimes in a timely manner, depending on the vendor’s situation. And we’ve got a lot of stressed out people out there and just like people have cost pressures in their households.

And real estate businesses have cost pressures. People in their households are stressed. Times are tough for a lot of people. And on the flip side, our property

managers are stressed. Our selling agents are stressed. A lot of our selling reps are on commission only. The what they’re selling is what they’re taking home.

Our property managers, day in, day out, are copying those stories about people having to move out with nowhere to go. And the person telling that story. That’s about them. That property manager is hearing that story maybe five, six times a day, five, six days a week. At their home opens, they’re hearing that story.

On the flip side, we, whilst the market is buoyant, for some it’s not. And we’re seeing stories of tenants receiving notices from the landlord’s bank. And that’s a really tough one where the tenant rings you and says, Rob, I’ve got

[00:33:21] Peter Fletcher: That’s nasty.

[00:33:21] Rob Mandanici: I’ve got this notice.

What is, what does this mean? Holder of superior title? Rob, I pay my rent on time. Why are you kicking me out? No, I just have to say, look, can you tell me who sent that? And, usually it’s Dentons or mortgagee services for National Bank or whatever. And it’s like, you’ve got to say, look, sorry, Peter or, Mary or whatever.

That, that’s nasty. Probably means your landlord has not been paying a mortgage and it’s a really difficult conversation because at that point, there is nothing the property manager can do. You need to either hope that the landlord can work it out or that, a selling agent is appointed quickly and can sell that property and hopefully, help that tenant find some alternative accommodation.

So we’ve seen an uprise in those lately and, that’s been reported. If you’re my colleagues as well, and that’s a really tough one because that tenant has no control and you have absolutely no control. So that, if I could change those perceptions out there that we’re human, we’re all people.

[00:34:22] Peter Fletcher: Robert Mandonici, thank you so much for coming on to the podcast. It’s been a real privilege to have you on.

[00:34:30] Rob Mandanici: Thank you, Peter. Appreciate it very much.

[00:34:32] Peter Fletcher: And that’s where we’ll leave it for this week. Have a good one. And that wraps up another episode of the WA Property Q& A. We hope you found our discussion valuable and gained some valuable insights into the world of property buying in Western Australia.

Remember, while we strive to provide useful information, it’s crucial to consult with the appropriate professionals before making any investment decisions. Don’t forget to tune in next week for another exciting episode where we continue to unravel the mysteries of the WA property market. If you have any questions or topic suggestions, feel free to reach out to us.

Until then, happy property hunting, and remember to seek the right advice for your personal circumstances.

Thank you for listening.