Uh, in your researches, have, have there, has there been any change in that sentiment?

It, it depends on where you are.

I mean, Brisbane's a good example.

So Brisbane, um, was very cheap for a long time.

You know, you couldn't, it was hard to find a suburb or, you know, you look at New Farm, for example, houses were expensive for Brisbane, but compared to Sydney and Melbourne, they weren't that expensive.

So what we found there is that a pr- as prices started to move in Brisbane and in really nice suburbs, once prices started to, you know, they started to see homes selling for four or five million, we did start to see a lot of renovation activity start to come in.

And the primary reason being is that before you could quite easily o- overcapitalise.

So what's changed?

Do you think there's any chance that we will see an end to stamp duty in the next 10 years or so?

Look, potentially.

I mean, uh, we, we have, we know...

We, we...

I mentioned Canberra early on and, um, and, and I think the, the challenge is around the transition.

So Canberra has put forward a very long transition, and there's a lot of concerns around how people who are, who have already paid stamp duty now have to pay land tax.

So, you know, moving into a, a much slower transition does make things a little bit more palatable.

[laughs]

Do you think there's any chance that we will see an end to stamp duty in the next 10 years or so?

Look, potentially.

I mean, I mentioned Canberra early on and I think the challenge is around the transition.

So Canberra has put forward a very long transition and there's a lot of concerns around how people who have already paid stamp duty now have to pay land tax.

So, you know, moving into a much slower transition does make things a little bit more palatable.

New Zealand moved from stamp duty to land tax.

They did it very quickly, but they did it at a time when the government in place was extremely popular.

How do we do that? And this

So what does it look like in a country where that is happening?

I mean, Japan is a fascinating case study because, as you said, we do have places where people abandon homes.

They throw in the keys and, and they walk away, and the reason being is that perhaps they can't pay the rates, they can't maintain them, and as a result, they do, you know, it leads to these incredibly cheap prices.

The thing with Japan, though, you do have to look, um, more broadly at that market because if you go to a place like Tokyo, it's certainly not cheap.

And even though Japan has seen a declining population, it has impacted primarily the regions where there's not many jobs and there's not much opportunity, and it has meant that a lot of people have gone into big cities like Tokyo and, and that's really kept the pricing of property in that area.

New Zealand is another really interesting example.

New Zealand was very, very similar to Australia in that it was incredibly expensive, and now we've had five years where prices haven't moved, and it's moved from a market where we've h- got an undersupply of property to an oversupply of property.

Can you give us an idea of exactly what that looks like? And I understand probably the big cities are the first place we see that start to happen.

What does it mean?

Well, what's happening with the rental market is that, um, obviously the budget didn't get announced until the 12th of May, but we were already seeing a, a drawback in investor activity.

At the same time, population growth was still occurring, and, uh, as a result, we have seen the number of rental listings drop quite dramatically.

So if you have a look in a c- at a city like Sydney, for example, the number of properties that are available for lease has dropped by almost 10%.

Uh, it's now at its lowest level since 2017, so that's probably the most dramatic market.

Um, but what we are seeing is a, a very consistent trend everywhere.

As we, we led into the budget, we were looking at very little rental a- availability.

Could we see a swing and shift more in favor of renters once those new homes are established?

Where do you think the solution is in order to help appease this generation that feels left out? Is it on creating more productive alternative investments? Is it around changing housing policy? How would you wave your magic wand as an economist and help address this problem that we're in?

I think the ability for Australia to create those more productive companies would be amazing.

We know in the US that one of the reasons people do invest in a more diverse way, people invest in property, but they also invest in the share market because they have gotten very wealthy from what the US share market has done.

So Ideally, that would be amazing.

For property, I think there's a few things that have to be done.

I mean, obviously, we need to build enough because, you know, in many cities, we just don't build to the extent that we need to.

And so there's just purely a shortage of homes.

What's your perspective on foreign investment?

What's the weakness of what seems to be proposed?

Well, the weakness is that, I mean, uh, it, again, we don't know exactly what they're proposing.

The worry we have is around what will happen to rental stock, and we know already that rental availability is very tight in many markets.

If we have fewer investors, there are going to be fewer rental properties, 100%.

That's the way that the calculation works.

The other side of it that we are concerned about, I mean, there's a lot of concerns, but there's another one around younger people.

We know a lot of young people getting into the market, particularly markets like Sydney, need to rely on things like rentvesting to get into the market.

Okay.

[laughs]

There's no doubt.

But they do, on the flip side, provide almost all of our rental properties.

And if we don't have investors, we won't have rental properties and, um, and so that's one side of it.

The other side of it is this view that once a renter becomes a, a, an owner, tick that box, you're g- you're done, and eventually everyone will own property.

And the reality of that is, is also wrong.

Yep

... to get people into the market.