#388 Chris Bates and Craig Bigelow – Transcript

James Wrigley
They excel. Welcome back. I’m James Wrigley. I don’t know how to intro these podcasts. I’ve got to work on how I do that. So anyway, I’m James, go to for the browser one today, Chris Bates and Craig Bigelow, join me today for the podcast. Thanks, guys for joining me, Craig, I reached out to you, but we’ve got the two of you, which is even better. So thanks for joining me.

Chris Bates
No worries on CB one and CB two.

James Wrigley
Crusade Craig. So that’s it. So Craig, will maybe start start with you. And I guess we’ll get you both to intro yourselves. I’m sure. Lots of members of the ensemble community and probably aware of the two of you seeing your faces pop up on LinkedIn or Instagram or wherever else it might be podcasts in the past. But But Craig, maybe if we start with you, can you give us a bit of your background? And where you’re at what you’re up to at the moment? Yeah, so

Craig Bigelow
I guess it’s, it’s changed a lot in the last six weeks. So it was almost 20 years in planning. The last at least 10 being primarily risk. And last year, I merged, merged businesses with VR. And then, late last year, it was sort of just working out where I was at. And I guess I’d been a bit worn down by where risk risk was at. And I guess my role in that space, and I had a bit had to do a bit of thinking around, what do I want to do for the next 10 years? And do I see myself doing the same thing, and I sort of sat on it for a while. Chris is helping us buy buy house at the moment, personally, and conversations with him and a few others, and just had a couple of months to think about it, as well. And I just couldn’t get over that answer of I can’t save myself during the risk for another 10 years. And so as much as it was challenging, I knew that I had to make a make a bit of a change. And the offer from Chris was was pretty unique and amazing. And yeah, like, took the opportunity and jumped into something completely different. With a bit of personal hesitation as well, considering how much of my life was tied up to risk and I felt my identity was in risk. So little bit of challenging for me personally as well.

James Wrigley
So you were in Melbourne for a while, like I was caught up years ago, one of the cafes in the city. You’re living in Melbourne for a while you’ve moved back to Sydney.

Craig Bigelow
Yeah, yeah, my wife works for safe Holly. So we moved back up to Sydney for that. And so we’ve been here for a little bit that we’re looking to buy back in Melbourne at the moment and hopefully get back down when we can but at the moment where we’re up in Sydney so it’s a bit of a transient

James Wrigley
increase habit, haven’t you? I’m sure anyone that’s catching these podcasts are probably well aware of who you are and what you’re up to. But can you give us the bit of rundown on your story?

Chris Bates
I’d spend obviously I got out of planning about three years ago I gave the license back to Madison and yeah, we’ve just sort of growing the mortgage broking business and you know it’s been a great journey it’s a real something we’ve really fallen in love with and yeah it’s a real passionate we got to be of a team going down on personal side stubble dad in the trenches as they say you know a three and one year old and yeah, zero to nine as well for I am four or 5am to 9am It’s it’s full on and then nine till four it’s full on in the business and then it’s back to it so yeah, now things are things are good. Let me up on the beach is that all the team’s remote? So it’s pretty amazing. The shifting COVID has been amazing for the broking industry I think it’s been good for the advice industry as well in terms of digitalization and etc. And yeah, it’s it’s it’s things are good.

James Wrigley
So how big is the team now? Because it was just yourself in the beginning was was

Chris Bates
just myself the solopreneur starting it out ignorant, arrogant thinking, I knew what the world was doing, trying to do two different things at once and didn’t know who I wanted to work with, etc. So about four we four and a half years ago, Ben joined he was an ex paraplanning ran a paraplanning outsource business through Malaysia and had like 20 staff there. He and I were friends for over a decade now But about six or seven years at that point. And so he joined then his brother joined and then we’ve got nine overseas at the moment then we’ve got a few extra people in Sydney Melbourne and Craig joint another guy starts next week. So totally out now we’re getting close to 17 I think that’s insane. But it’s a funny model like a lot of bro I am 2020 2021 was a year of just saw significant growth. We went from, you know, low 100 million to over 300 million. And you know, we’re probably selling about a billion dollars this month. So as a broker that’s that’s quite a you know, big number but mostly works is done on an individual basis has been a team effort. And everyone basically works on every client, like, you know, we do someone to control it a little bit, but at different stages, but it’s, yeah, it’s awesome. It’s rather than a lot of broken models or just sort of silos, you know, one broker and one support. And it’s not a great efficient model, because not everyone’s playing to their key skill set, I guess. You could say, yeah, it’s things are good. Yep.

James Wrigley
Yep. And Craig, maybe a bit more chat about your experience in the, in the risk space, because I know, like you, you’ve done a whole lot of work in automating like renewals and all of this stuff, like, you know, it was spoken previously about about the tech side of trying to make that a bit of a smoother process. Can you maybe touch on what you’ve, what you’ve built there, and, and I’m interested in how, you know, you’ve decided risks, not for you going forward? Yeah,

Craig Bigelow
I think at the end of the day, that’s a passion. For me, it’s just like making things as efficient as they can be. And that was what I spent a lot of time doing. But when I, when I sold my business I worked out, yeah, I got a decent amount of like, money for that when I sold. But what I got paid because of the automation probably would have been the same if I had just written business the whole way through. So it was always a bit of a thing, you take your eye off the ball of new business, to focus on the efficiencies and essentially end up in the same spot. But one thing that I take away from it is that if I hadn’t done that, I wouldn’t then be able to have the knowledge to apply to something else. And so I guess this presents a new challenge for me to replicate that same thinking to something else. That is another new challenge for me. And it’s a good opportunity, as Chris said, given where they’ve come from to now, it’s been an amazing growth journey. And I’m just trying to bring some of that thinking that I had previously to this new role. And I guess, take us into the future in a way that we can all work together and deliver on what we promised to more people, I guess. And that’s really the challenge. And it’s an exciting one for me, because there’s a lot of opportunity in there. And I think it’s a chance to do it really well together, if that makes sense. Rather than leaving what I’d learned before. Yeah, okay, the widgets, different thing, lending versus risk, but the commitment to doing it as efficiently as possible to put clients at the center, and deliver the best experience we possibly can. It’s exactly the same.

James Wrigley
So what So what So what’s your role? What is your role is what’s, you know, going to morph into what it is you’re doing within the business?

Craig Bigelow
So to pretend that I’m an expert mortgage broker is completely, completely untrue. I guess the the challenge would be if you were to go out and put your head up and say that you’re a mortgage broker from day one, I think it doesn’t sit comfortably with me, I’ve literally I’ve never bought a house. Personally, I’ve never done a loan. Actually, I think I did on in early 2000s, when I thought it was a good idea to get into it. But I guess the unique position of it is that Chris has asked me to do nothing I’m not comfortable doing. So my role is to speak with potential partners and our partners and make that as tidy and efficient and clean as we can do the initial phone calls with people that are very similar to planning conversations, uncovering goals, uncovering needs, understanding what the current and future plans are, gathering that information, exploring what things look like, not just for this current transaction, but into the future. And then I provide that information to the strategy team. And then they catch up with Chris to talk about property and strategy and how things flow from a banking policy. All the things that I don’t know, is not something that I have to have conversations with. So as as Chris mentioned, with the team approach, it’s it’s everybody doing the things that they’re good at, rather than trying to pretend there’s something then that they’re not. And then we’ve got the you know, the processing team and the the engine room or the credit team that do all the applications and then everything from there on. It’s everybody’s sticking to what they know.

James Wrigley
Yeah. And so it sounds like increasingly we’ll get you to comment on it. It sounds like it’s more than a what I would what I would anticipate of a normal broking relationship, you’re not going in it. ANZ is going to lend you the most amount of money off you go and then and then the client is left to their own devices as to what are they actually doing? What is the strategy look like? It sounds like it’s more of a almost a financial planning mindset around the lending that they’re doing. Yeah. Can you talk us through what that looks like?

Chris Bates
I mean, it is I mean, I guess my heart still as a planner, right? That’s what I started as back in 2007. You know, that’s I became a mortgage broker. I was doing mortgage broking planning meetings with mortgage brokers and so it’s hard for me to switch that hat off and I think that was why it was hard for me to give up the license even though I was so in love with the the prop The conversation and guiding people on it I, you know, because it was my identity, I’m now I just stick to my lane I’m right we work with advisors, I, I was losing, I was not having the conversations around the other needs of I should, because I didn’t have the relationships and I also had the license. And so it was a real enabler of us just to let go. And but I still the mindset still has to be there with with debt, debt advice and, and property advice. You know, it’s a big and underserved need. And so we’re definitely not facilitators or validators. And, you know, I happen to a client yesterday, he’s came in and he’s like, I’m trying to buy some, you know, some cheaper lower end properties, he lives up in new car, so, and then I’m going to do these duplex townhouses on them and sell them and make money and it’s just won’t work. And, you know, and he was quite, you know, stubborn and trying to say that he just wanted me to facilitate the loan. And we, the conversation ended, because I said, we just want to facilitate and validate like, if you want to come on board with us, you need to be able to under, you know, listen to what we’ve learned. And so, absolutely, it’s a financial planning mindset in terms of helping people think through, you know, if we buy this apartment, what’s going to happen after that in five years time, when you tell me you want kids or, you know, you’re telling me that things at work are really unsteady, and you’re not sure what’s going to happen? Well, let’s, let’s take a step back. Let’s, let’s figure out what get that clarity, I guess. And so the property so we don’t act as property buyer’s agents, that’s a key sometimes misunderstanding, that is actually another amazing professional that you need, you know, like a plan or like a great broker, you actually need, not always, but it’s usually likely that a great buyer’s agent will add a lot of value to your situation, if you can afford their feet. And so what we do is we place the middleman to them, we say, well, yep, all ultimately, the best option for you right now is to upgrade in Sydney, or to buy your first home in Melbourne, or to buy an investment property in Brisbane or something. This is the best two or three buyer’s agents we’d recommend. And we don’t get paid for those referrals. But we know that they’ve been doing it five or 10 years, you know, we know they’ve got that local market knowledge, and they’ve got the relationships with the agents. And so, absolutely, I mean, I was sitting down at a, I run a little masterminds with, you know, top brokers, I always reached out to, you know, a top broker, if I hear about them and have a chat and put a little group together. And I even asked them, you know, like, these guys are doing well over $100 million dollars a year. And, you know, what, how do you guys feel about the property conversation, and everyone basically said, I just got to stay in your own lane, you know, your role is there to just to provide the loan. And I just don’t think that’s good enough. I think that, you know, we need to educate, we’ve got, you know, informed position, we need to give them information that’s going to help them, you know, Snowball, you know, make a great decision, and it’ll snowball into a better decision. And so, and I mean, a few years ago, I did X, Y, when it was x, why did the, you know the broking slash property was, and that was probably where my initial my thinking was, I was like, I’m waiting. And that was when I was leaving planning, I feel like I’ve got a real attachment and want to help the planning industry. With this conversation. I wasn’t sure how to do it. And so I thought, I will do a course with x, y. And over the years that, that that desire, still been there. And prior to Craig joining, I was like, I think the really way that I want to help is work with planners give better advice, and build better businesses by really solving this problem. And we went to a business coach who specializes in this sort of connection. We were building out a whole plan and a strategy. And then, fortuitously, Craig’s telling me that maybe he wants to get out of advice. Well, you know, this is what we’re doing. We’d love to have you on board. So that sort of, we were already on that path. But Craig was really the the missing ingredient that we needed to really focus on that, that onboarding, that nurturing that education, that the real selling the the value of both worlds, not just the assets, but the debt plus the property. And yeah, it’s early days, we’re still figuring out this is not a, you know, we’re just looking for two partners. This is we’re trying to, this is a 1015 20 year play for us, I’ve got a three year old and a one year old, we’re not looking to do this to the finish school. So you know, this is going to be slowly but surely just really try to help solve this problem. And you know, and encourage other brokers to come on board, because there’s a lot of planners, and there’s a lot of people who need help. We can’t do it all the business. So we’re in that curious learning stage and building everything.

James Wrigley
So where did the Where did the? Where did the whole education piece come from? Like, you know, you’re obviously running your own podcast and opportunity to speak to lots and lots and lots of people in lots of really smart people around the place, but this whole, like the idea of that. Where did you build your foundation of knowledge from around what’s a good property decision versus what a bad property decision we’d like? Where did that originate from?

Chris Bates
Well, I mean, similarly right what Scott was saying around like buying a property, I think it was like back in 2011. I’d said four years in the UK as an advisor. One year I was working at a&p practice. And then I was, you know, looking at jobs, right? Move back, or any under a year experience in the Australian market. And just Luckily, I got an offer from this property planning Australia, which was a financial planning business or mortgage broking business. And they didn’t really do buyer’s agency, they could have said they did, but they referred it out. And I was the planner, and I was doing meetings with mortgage brokers and the clients went from 6070s 80s, you know, that I’d done the last five years to, you know, 20s 30s 40s, and I was doing the conversation around the risk, you know, around what are you guys doing with your super look, you know, do you want to put a long term plan and a lot of them said, No, we just want to buy a property. And I was watching the the mortgage broker have the conversation, I was like, this is just a really interesting chat. And I really want to help younger people, because it’s the foundations of, you know, a lot of people in their 50s 60s sort of damage limitation, right? Like, I want to retire at this age and my investment options. So I just, I fell in love with helping younger people. And then i i Slowly but surely, especially over those first two and a half years. So I just saw 1000s of people that they had on their client book and what they’re done and what worked, what hadn’t worked. And I just started testing and researching and speaking to buyer’s agents, and it was a it’s been a snowball effect. I remember even early days in business, I don’t know anywhere near as much as I do now. And and so it’s probably been since 2012, to now. So looking 1011 years of just constantly thinking about this learning, researching, and then making my own decisions along the way as well. Do

James Wrigley
it, Craig, maybe you can comment on Where did where did where do lending clients come from? And where do they come from? It isn’t just come from the podcast, is your website, other financial advisors? Like when what’s the network look like? Where did the new inquiries come from?

Craig Bigelow
Yeah, I think, as Chris mentioned, curious is probably the the mantra at the moment for me. So when I joined, I just went back through all of the intro call. So last 12 months, and I just wanted to have a look at how it worked. Zero selfishly, I wanted to know what to do on that call from what was working for the others. So really green in that space, and just trying to absorb as much as I could. And there was, you know, and Chris will pick me up on this, if it’s not right. But it seems like the podcast, LinkedIn referral partners been planners and those sorts of things as well, the other majority there. I think there’s a couple of other opportunities that are in the midst that Chris might like to touch on, as well. But I think some of that stuff, you’re looking at those traditional referral partners, and then also coming back from clients. So the team does a follow up call after a loan settles with every client. And one of the things they talk to them about is their experience, and what would they be comfortable speaking to other people about it? And I would say that, you know, those emails get shared with the whole team. And that’s and Chris pointed out how good that email is to read. There’s for two reasons. One, we know very clearly what’s not working. So yesterday, we had example that they said they were a bit confused, and one of the timeline of what happens at each step. So I’ll just move it from there into a project. And that’s a project on my list to work on is a timeline for clients at each stage. And so we get feedback constantly on those things of ways to make those small improvements all the time. I was saying to Chris yesterday, my project list is about 24 at the moment. But But I think that’s a good thing is we’re able to then prioritize those. They’re not lost, and they’re not not all been done, but they’re on the board right to look at. So then the question is asked is would they feel comfortable referring? And I would say, Chris, would I be wrong in saying that nine out of 10 would be comfortable not saying that they do. saying they’re comfortable to do it on the phone and sending their friend is a different thing. But it is a big source of that as well.

James Wrigley
Yeah, but I’m sure your process is strong enough. And the experience is, is is good enough that if a few of them probably do, you know, refer their friends or family, whatever it is,

Craig Bigelow
I think it’s that experience that you were talking about, too. I experienced that personally, as a customer. I didn’t really know what to expect out of the whole thing. But we sent Chris six properties that we were looking at that our buyer’s advocate had suggested. And Chris said no to all but two of them. And, and I thought that was a really unique offering. I didn’t expect that at all. But I think that level of experience when you come in, they’re expecting like you were sort of saying that facilitation of a loan, and you get all of this. It becomes a very different proposition that it’s hard not to talk about.

James Wrigley
Yeah, but that’s interesting, Chris, that you you rejected four of the six. Can you comment on on any of it? You know, the address of the house that you’re looking at buying in Melbourne? But, but like what, like, what is it about them that, you know, you rejected some and said these ones are a decent like what what is it?

Chris Bates
It’s pretty easy to tell us I don’t really know what those were at that time or whatever it is, but you know, there’s usually a thought there’s a process, right? And it’s going through the fundamentals. straightaway, I’ll jump on the map and I’ll say, you know, what the street is right? Or using the suburb because you see the dress and you know, every suburb is probably got good properties within it, you know, within reason. And surely the street is a deal breaker, you know, great streets don’t turn over that often. So it’s very hard to buy on the best streets cuz people in them know that the best route so usually the streets do but it could be a busy road could be a rat run, and you can figure those things out pretty quickly. Could be the aspects is the next thing you know, like it could be in Melbourne, Craig’s trying to buy a south facing in Melbourne, and that’s facing the rear of the property where you spend most of your time you want that to be facing north north south and just it’s a much different proposition to live in, in the winters in Melbourne and and so a lot of that I think that’s a bit of a deal breaker for a lot of property and privacy can be a problem meanwhile, Craig was looking at his apartment block over the back and yeah, there was some bamboo shredding it but you know, ultimately it’s a privacy is it’s such a it’s a key thing you either when you’re in a property that’s super private versus a property where you got someone looking over your back fence or that that’s it. So privacy is a big one. The floor plan even just the front ever in Melbourne, for example, everyone loves the beautiful frontage, right. And, you know, it’s just that quintessential thing when you’re doing well financially, you want a beautiful looking streetscape so important. And not every property has those heritage features. Even just the layout of the size of the block, you know, if you’re looking in a city in Melbourne, a lot of blocks are too small, like too small, where you to upgrade it to a three or four bed, it’s just gets not enough living spaces. You know, you could have there probably you’d be what distance from transport, you know, there’s black spots in suburbs, where you can always be, you know, 1.5 Keishon, the train or the tram. And, you know, too far away from the cafe culture, where, you know, ultimately people in that suburb, if they had money, they wouldn’t want to be in that pocket. They’d want to be in his pocket. So you see that pocket, disconnects the stuff where everyone really wants to be and we’re so yeah, it’s just going through that process, the ideal, Craig’s pursuing one at the moment, this will be sold after this podcast. But it ticks all the boxes, great suburb north facing rear surrounded by other houses that are going to create issues with privacy long term, beautiful frontage, great floor plan, easy to renovate and add value to. And so it’s just trying to tick as many boxes and just some things that deal breakers where you should just really hold off. And sometimes you haven’t got the choice in a real hot boom market. Because by waiting, you’re actually actually making it even harder to buy those good assets, because they’re running on you and your budgets limited. So sometimes you have to bite the bullet and go seven or six out of 10 is good enough. But in this upper market, you hold off. We had a client by this week. And we always have a we have a WhatsApp group. And I was so and so bored. And I’ve got code that must have been two years. Just out of curiosity, I went out to look at our first email and it was two years to tomorrow. So it was actually one year 364 days was wrong. But yeah, he thought he was so patient. He bought in Mosman in Sydney, but he just bought an absolute cracker at the end of it, you know. And so patience and persistence pays off. And so that’s what we we sort of encourage.

Craig Bigelow
I’ve just just to add to that. I think it only highlights that Chris is planning brain never switches off, if that makes sense. And I’m not saying that the buyer’s advocate sent the wrong properties. But what I’m saying is that Chris knew me personally and knew Kali and what we were looking for as a family potentially better, if that makes sense. Because of a for us, we got that personal relationship. But that’s not unique. To me, it’s kind of the way that you operate, Chris, in terms of understanding deeply what people are looking to do, so that you can comment to some of those things that might have been overlooked by something that came through as a good property. But it’s not a necessarily a good property for Carly. And I, if that makes sense based on what Chris knew. And I think that’s I don’t think that can be undersold as well, from the knowledge that you get from people given that curious brain that you have that can I think comes from a planning background.

James Wrigley
And those points that you mentioned about privacy and the good streets and all the rest of it would would that would that type of approach be any different if it was a home to live in versus an investment? Or would you would you still be looking for those exact same things?

Chris Bates
Exactly the same? Because ultimately the price the property is really based on who wants to own it and not and who wants to rent it right. And, you know, because when you ultimately sell at the market is driven by owner occupiers, 70% but some marketplaces in the marketplaces you really want to buy and probably 80 or 90% driven by people want to buy there and go into a lot of debt and take on all Got a debt, because ultimately offers amazing lifestyle to their family and it gives them you know, whether it’s access to the city for work or the schools or the the culture and the lifestyle around that, and the beach and the water and etc. So the price that the more boxes you can take from a high income family owner occupier market, that’s ultimately what you want to be buying from an investment or a home. And I think just the home is just your biggest opportunity. You know, and I think this is what I guess where the planning space, I think it’s probably a next evolution of the planning space is can can look at both sides of the balance sheet, you know, go look like what’s all your assets, okay, let’s look at your super let’s all look at your shares, etc. But let’s look at your home, like, what is that a good asset? What are you going to do long term, you’re gonna live there long term, you know, it’s a tax free asset. You know, we’ve been super changes this week, you know, what, can we optimize that? You know, how do we optimize that? And, you know, and I think that’s something that we really, you know, spend a lot of time on, you know, and if they got other investment properties, are those investment properties really working for you? Like, a lot of people will just say, I don’t want to sell that you never sell those sort of all these myths around property? You know, is it better to take that debt and pay off the home and then read that cycle into some shares? Or is it better to look at an investment property, etc. If a client comes to us trying to buy a property and self managed superfunds would be like, No, we just don’t do it. And so it’s probably just looking at the assets, but then also the debt, I think, ignorantly, and arrogantly, I thought mortgage broking would be pretty easy, like coming from a planning background. But there’s so much to it, and even just restructuring loans and extending loan terms. And, you know, maximizing interest only and using offset accounts wisely. And, and then releasing equity and building buffers regularly. And I think there’s a real value add in, just as part of a planning process is every year reviewing that debt structure and optimizing it. And even particularly more, because the loyalty tax gone next level in the last few years, it’s just crazy. So it’s easy wins for planners, I think is going they’re saving the client some money because it can happen really fast. And then there’s that value exchange, and the planning comes across as the hero because ultimately, they’re the ones who made the referral. And so this is sort of what we’re building out bit by bit.

Craig Bigelow
I guess, Chris, James, just with this, I guess one of the things just talking to lots of planners and asking what that, you know, most of them know, you know, if you’ve been doing planning for a while you’ve got a network of people that you’d like to work with. So it could be the brokers, the accountants, the lawyers, those sorts of things. And I’ve just been really curious to know, what does it look like? What’s working? What do you think could be the end, just really just trying to understand what it is that is there? There’s some really good relationships that are there. And I’ve learned a lot from just asking questions, and one of those was capturing the review date for your planning clients as brokers. So why don’t we know for those referred clients what the review date is, so we can provide you with a loan schedule ahead of time rates card to compare what it is with what’s in the market, the script that I know, you spoke to about the Macquarie Bank, you know, the length that you went through and all the stuff I even saw your video on the revaluation that you had to do to get your home LVR attributed correctly. Oh, how do you take that stuff into your meeting ahead of time, we’ve got all that data, but we’re not using it. So we’re not I’m not a crazy rocket sign to spit. I’m I like listening. And I’m curious. And I just want to try and take those things and make it as easy as possible for all of us to make that experience for the client as good as it possibly can. And make the person referring us look like a hero that that they already are. But just improve that from that visibility perspective as well.

James Wrigley
Yeah, fantastic. Maybe last couple of things that I’ll get you both to comment on I can’t have you on and not not get an opinion on the property market and direction. And Chris, you often you’ll put up a lengthy post on LinkedIn whenever you have, whenever you have where you’ve had a conversation with a client or something and give us your view but but we’re getting it all the time certainly with younger clients and what’s going on with my mortgages should I be fixing should I go variable, how much longer they’re gonna go up? And I no one really knows but but can I get your two cents on the whole on the whole topic and versus the property market? Is it gonna keep falling? Do you think we’re due for a turnaround? Yeah, there’s a pent up demand for on the buyer side. So maybe it’s not gonna fall too much further. What do you think?

Chris Bates
I think as it’s the the property markets a big name, it’s like the equity market. Right. And you know, as you’re buying the index, that you’re buying individual companies and the property market works more like individual companies, REITs individual properties that have all got different balance sheets and all got different demand and supply metrics. Right. And I think planners need to shift from that because the media reports on that property market right there. Don’t report and and properties actually individually, you own one property on one street on one side of the street. And that’s a mini market in itself. And so I think that’s just to always have to kind of make that, you know, context. So because there’s many markets that have got really poor fundamentals from a supply point of view, think about high density apartments, right? They’ve keep building more, and there’s a lot of them. And then the demand is really patchy, right? It’s a lot of its investors and singles and couples, and it’s not the family market. And then there’s building issues, etc. So every markets behaving differently and, and adjusting to higher rates. That mean that ultimately the moment it’s a story of where rates stay in and finish and where they stay and how long they stay at certain levels. Mean yesterday we had the ex chief economist at ANZ for 10 odd years, Warren Hogan came on the podcast, right. And he was quite insightful in terms of what he was saying he was one he was calling RBA rate at 4.5% last year when no one else was. But I mean, even his view is that we know we’ve got a lot of tightening still to go maybe even up to 4.3% or something. But then whatever comes on in terms of interest rates from here would likely have to come back once they get the genie back in the bottle, right. And so what ultimately happened is the market’s freezing up core logic yesterday, it’s the start of March now released Lee’s new listings numbers in February, there was nothing if you open up your portals, you will see what came on nothing good came on, because everyone in the good property right now is saying Why would I sell to upgrade when rates are high, and I don’t know what rates are. And I’ve got a great property. I even don’t want to do a renter, we had a client pull out of it ran out yesterday, just that fear of unknown, people just sit still. So you’ve seen this real contraction of listings and any property on the markets been, is usually not a great asset, all those things we spoke about before. So very little supply, and property is priced on the marginal buyer. So any asset is really and so you know, if there’s 10 properties for sale, and there’s 12 People who want to buy them, then and those poor people are really hungry, and it got good budgets, and then property holds its value. It’s only when you see this flood of listings, and a real drop in buyers that you start to get this fire sale event. And so a lot of the premium markets right now, very tight listings, and buyers have already done their readjustment, you know, they’ve last year was that freakout event, you know, August, September, October, everyone thought rates, were probably going to go up slowly. And then they went up fast. And everyone was like, I don’t know what’s gonna happen, and there was still a bit of stock on the market, then because people were either bought or would have done the effort to, you know, get it ready for sale. That was amazing buying August, September, October, by the time November came around, listings got dry. And December, really, and so it’s actually been was actually the best buying was back then. And no one would really say that. But if you go back in time, that’s when we saw the clients get the best deals. Now there’s actually more competition for the amount of properties on the market, we’re finding and so there’s support in the market, and you’re actually having to go into some type of competition to buy usually, that’s that’s, and that’s all the coveted properties. Our clients were buyer, we don’t go and buy in, in areas that have got supply fundamental problems, you know, they’ve got demand problems. It’s where you know, there is really tight supply at all times. And there’s a growing demand from people who ultimately have a lifestyle need that pent up demand, you spoke about Gen Z now in in Sydney, and Melbourne is significant people who are in houses that they want to live in as their forever home, you know, there’s a lack of those. And there’s a lot of people wanting to upgrade into them that have missed out 2022 2021 Or maybe they just had a baby in the last couple of years. And now they’re ready to to get into that house. So yeah, I think they’re the media story. But we’ve already started to see that, you know, there’s a bit of support in the market. I think we could have a bit of a second wave of a downturn, though. This is the thing that Chris joy is talking about at the moment. And is that there could be another freakout event if if RBA rate goes past 4%. Yeah, if it stays at if it stays under 4%. And the markets already factored that in. But if it goes to 4.25, that’s a mindset shift over that four. And I think that would be also a drop in demand. And people would want to wait till there’s a plateau and REITs are falling rates. And so I think that could be another buying opportunity, but nothing’s guaranteed, right? Like, we don’t know if rates are gonna go that high or whatever. But that could be another little correction in prices. But if if rates stopped going up now, I think the best buying is already gone. And so it’s a it’s a right conversation. It was only two months ago the market pricing was on a long answer to the question. market pricing 3.6 for the RBA. So that’s that’s what shifted. The Australian government has realized that the Australian economy is quite resilient. And not everyone’s got a mortgage and people are still spending and people are still moving here from you know, overseas and you know, students etc. And we’re still going too fast and not that good. those interest rates aren’t biting, especially with the fixed rates problem that we created in COVID. By fixing all that loans, and so watch this space James. But it’s just get individual markets, individual properties. If you want to know what’s happening, get on the ground, go to an auction, ideally as similar as property to yours as you can, and call the agent and go to the open homes, see what’s happening, you know, and see. And you might be surprised actually know what that actually sold. That’s not what domain. That’s not what, you know, the news media is

James Wrigley
not going to tell me on the news tonight that this property sold for a decent price

Chris Bates
in my suburb that was actually the same as mine. Why am I watching the news freaking out when I just saw that, so six buyers on one property that there’s no other properties on the market?

James Wrigley
Craig, you mentioned, going through the exercise with Macquarie about now the refinance and Chris are kind of doing some of what I’ve seen you writing about before, stretch the mortgage out, reduce the repayments down, release some equity, build the buffers, they kind of thing and yeah, I’m going through that process at the moment. And I have no intention to use this money that I’m releasing, but I can with the valuation came through from from the value from the bank, and the mortgage broker set via email saying and guess what it was us? Sure, got a particular guest. And he came back with this price. I’m like, There’s no way in the world that it’s like, I couldn’t believe how high this was given, given the sentiment and what we’re hearing in the news that it should be low, it’s going down, it’s gone down, it’s gone down. And like the hell this is, might have just been a fluke evaluation from from the valuer.

Chris Bates
But that sounds like when you get those done. Last year applies in Melbourne, and, yeah, it’s probably you know, on a good day one to 1.1. We got about 1.25. Look, you know that it’s an education here, you know, like, what we do is released equity, you know, that allows us to build buffers allows us potentially spend money on rhinos that allows us to, you know, buy other things, you know, other assets, etc. You do need to be careful, though, with clients that are getting high vows is there’s an education process that you’re potentially getting equity well over 80%. And and that, you know, if you did you basically have a loan, you know, in that scenario, James, you may have a loan of up to 100%, at residential rates, which is an amazing thing, opportunity, but it’s just comes with risk of knowing the truth, have you ever had to sell and use that money, you might not have any money left over or go into negative equity, etc. But yeah, that those those freak valuations do happen, and they can create great opportunities for people to do other things, you know, that they may not have had been able to do if they had a low valuation, for example.

Craig Bigelow
And I think just on that point with, when that sort of stuff comes up, I’ve seen it happen with a number of people is that Chris is like, well, you can’t buy a quality asset with the equity that you’ve released. So this would be the time to go back and speak to James about dollar cost averaging these sorts of things that you should be having that conversation with him and potentially property’s not the right investment for you right now with that extra money. And I’ve really appreciated seeing that conversation that’s come backwards to say, look, yeah, you’ve got this, don’t go and get a property that gets us in a loan that you know Caray, where we’re making money, it’s like this is the wrong decision to be making for the principles that we use for you to buy your home, go and chat to your advisor about this because this is where you could start to unlock some other opportunities and diversify your asset pool as well. So the practicing what he preaches on that one as draws me to Chris. And I mean, we’ve known each other for a long time, personally. But professionally, it’s only impressed me ever more being on the ground and seeing it every day that it really is genuine. And I think that’s a big thing that we both had over this journey. It’s, it didn’t matter what we were doing, we’re just trying to tell the truth or our truth, if that makes sense. And not hold back on that one, too. And I think that’s where we’re quite similar in that way, in both sides of the coin. If I don’t know something, I’ll tell you. If Chris knows something he’ll tell you. So I’ve always liked that about it.

James Wrigley
Look, guys, we might wrap it up there. Thank you for for joining me this morning. For anyone that doesn’t know where to find you. And if they want to reach out connect or whatever, where can they find you? You know, give yourselves a bit of a plug.

Chris Bates
So we’ve got a new brand launching in a couple of weeks. It’s going from welfare to blast and it’ll be blast.com What are they doing dot Commodore? Yeah, that’s one of our decisions. But obviously we can chat catches both on LinkedIn, etc. I think that it’s a big conversation for this. This is not something that you know, in two years time we’ll be doing something else. This is the the something we’re trying to really change at a big level. You know, and if you’ve got any relationships with brokers as a planner that’s really working like we don’t definitely want to enter up that relationship. But if you’ve got any like little tips on and why it works so well for you as a planner, we’d love to hear because, you know, we’d love to be including that in our offering and educating other planners to have their in their brokers and other brokers in the future. And so this is a team effort. I’m not someone who’s in a scarce mindset, or it’s a completely abundant mindset, and we were trying to get other brokers on this journey and other planners in it and yeah, and work as a real team, which should be happening when professionals right. But unfortunately, we all know that doesn’t happen as much as it should. And, yeah, so thanks so much for having us on. James.

James Wrigley
Thanks for joining me. Thanks, Craig.

Craig Bigelow
Appreciate it. Thank you.

James Wrigley
Good to speak with you both catch will catch up with you separately another time, I guess.

Chris Bates
Sounds good. Awesome. Cheers.