07 Dec 2023 Podcast: Guest – Australian Investment Property Insights with Cate Bakos Property

Today we have a special guest with a wealth of knowledge in the world of Australian Real Estate.

Cate Bakos, a chemistry graduate from Monash University, transitioned from a career in science and sales/marketing to real estate, becoming a highly recognised property expert and award-winning buyer’s agent.

With over 2,000 client interactions, contributions to numerous media platforms and authorship in the field, Cate’s journey includes co-founding a boutique Melbourne Buyers Agency and achieving multiple industry accolades, while also co-hosting “The Property Trio” podcast.

In this episode, we touch on the current state of the investment market in Australia, with a particular focus on Victoria, which is facing unique challenges in the land market.

Cate shares her forecasts for the Melbourne and wider Victorian markets, shedding light on what lies ahead.
The good news is that investors are making a comeback in Victoria, although the numbers are still lower compared to owner-occupiers. Cate’s expertise will help us understand the trends and factors driving this shift.
Additionally, we’ll explore Cate’s must-haves when it comes to properties and her proven methods for selecting investments that stand the test of time.

If you find this episode valuable, be sure to subscribe to our podcast and leave a review. Also, don’t forget to share this episode with your friends and colleagues who might benefit from Cate’s insights.
For those interested in reaching out or learning more about Cate’s services, visit her website at www.catebakos.com.au.

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You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at ​​https://www.everlend.com.au/

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Podcast produced with Apiro

Please find a Podcast summary below with the interview highlights:

Guest: Cate Bakos, Buyers Advocate
Host: Evelyn

Overview:

Evelyn interviews Cate Bakos to discuss current trends in the property market, focusing on investment strategies, challenges in Victoria, and advice for buyers and investors. Cate shares insights from her personal and professional experiences, highlighting the impact of regulatory changes, interest rates, and market dynamics.

Key Highlights:

Current Market Trends:

• Victoria’s Challenges:
  • Negative sentiment driven by rental reforms, land tax increases, and scars from COVID-era eviction moratoriums.
  • Stricter compliance requirements (e.g., electrical and gas checks) have increased holding costs, especially for older properties.
  • High interest rates are prompting some investors to offload properties, particularly those with tight cash flow.
• Shift in Buyer Demographics:
  • Cate’s current client base is heavily skewed toward owner-occupiers (90%) rather than investors (10%).
  • Investors remain active nationally but are more cautious in Victoria due to its stricter policies.

Advice for Investors:

• Portfolio Assessment:
  • Investors struggling with holding costs should consult professionals (mortgage brokers, financial planners) to explore restructuring or selling underperforming properties.
  • Consider future growth potential, cash flow, and tax implications before deciding which property to sell.
• Key Property Attributes:
  • Demand: Properties should cater to the target tenant demographic.
  • Compliance: Properties with completed gas and electrical checks are preferable.
  • Maintenance: Avoid high-maintenance properties or those needing costly upgrades.
  • Long-term Potential: Look for opportunities to manufacture growth through renovations or developments.

Navigating Market Changes:

• Interest Rates:
  • Cate anticipates increased investor participation if rates decline, potentially leading to simultaneous rental yield and capital growth increases.
• Regional and Coastal Markets:
  • COVID-era migration to regional and coastal areas has eased as workers return to offices and demand in cities rebounds.
  • Areas like Geelong and Ballarat are recovering after slight price corrections.

Stepping-Stone Properties:

• Buyers planning to live in a property temporarily before renting it out should:
  • Prioritise properties with strong rental appeal (e.g., proximity to public transport, suitable layouts).
  • Structure loans appropriately to retain deductible debt for future investments.
  • Consider properties with the potential for minor upgrades rather than major overhauls.

Cate’s Personal Investment Insights:

• Cate’s portfolio includes properties across multiple states (Victoria, Tasmania, South Australia, Queensland), each with distinct performance characteristics:
  • Tasmania: Strong rental demand, though growth can be cyclical.
  • Queensland: Narrowly avoided selling due to repealed land tax changes.
  • Victoria: Toughest regulatory environment, but potential for future recovery.

The Role of Property Managers:

• A skilled property manager is critical for maintaining tenant relationships, handling compliance, and protecting property value.
• Poor management can lead to financial losses and increased maintenance costs.

Advice for Buyers:

• Balancing Preferences and Investment Potential:
  • Short-term live-in buyers should prioritise capital growth and rental appeal over personal preferences.
  • Long-term owner-occupiers should choose properties that fit their lifestyle needs but also consider future investment viability.
• Auction Strategy:
  • When managing multiple property options, focus on the preferred property and use backup options strategically.
  • Communicate with agents to gather campaign insights and assess competition.

Conclusion:

Cate emphasises the importance of strategic decision-making for both investors and owner-occupiers. Whether navigating regulatory changes in Victoria or choosing a stepping-stone property, understanding market dynamics and seeking professional advice are key to long-term success.