The PROPERTY DOCTORS, Sydney Australia Novak Properties
NOVAK PROPERTIES CREW and PROPERTY LEGENDS in the industry share their experiences and knowledge. Hacks and tips to make you a smarter property GURU :) Learn with exclusive content, advice, insider info and HOT real estate industry PRO SECRETS. For sale, for lease, residential, commercial, buying off the plan, finance, mortgages, interest rates, first home buyer, investments - all topics covered. The untold real estate info you've been waiting for.
The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1352 - 2025 BOOMTOWN PICS QLD VS NSW VS VIC VS NT
Unlock the secrets of property investment with the insights of Richard Shepard, our esteemed guest and Chief Wealth Property Advisor. Promising strategies that could lead you to financial independence in just seven to twelve years, Richard shifts the focus from traditional rental income to more dynamic avenues like liquidated capital growth and development profit. We journey through Australia's most promising investment landscapes, from the stable yet evolving markets in Adelaide and Brisbane to the burgeoning opportunities in Perth and Darwin. Richard shares his wisdom on understanding market cycles and the psychological nuances that drive property value, offering a playbook for both novice and seasoned investors eager to maximize returns.
As we navigate the complexities of choosing between regional areas and capital cities, Richard lends his expertise on striking the right balance between stability and potential unpredictability. In entertaining comparisons, we gauge the investment allure between the lively Northern Beaches and the rapidly developing Sydney Olympic Park, examining factors like unit yields and first-time buyer incentives. With strategic advice and a playful wager on the next decade's market champions, this episode is a treasure trove of actionable insights to help you make informed investment decisions.
2025 Boomtown Picks. We're comparing all five states this morning. This is the Great Property Political Debate. Stay tuned. I'm the ringleader, so I'm alive. Richard Shepard, thank you for joining us. Chief Wealth Property Advisor. That is one heck of a title.
Speaker 2:Steve, all right, it sounds a bit geeky, doesn't it? A bit cheesy, but Thank you for making the time to come on cheesy but, we're going to have a great time.
Speaker 1:Thank you for making the time to come on this morning. We are excited to have you.
Speaker 2:Yeah, thanks so much for having me on the show, guys. I've been listening in now and then for a while, so obviously known a lot about Novak Agency for a very long time. So it's a pleasure to be on the show and a privilege. Thanks, guys.
Speaker 1:Just give people a 30 second snapshot as to what you do. You said you've been doing it almost 30 years super, super um a long time.
Speaker 2:Yeah, so it's um, it's property investment advice. So we liken it very much to financial planning, but just for property. So we start with teaching people how to invest, how to use finance techniques, how to manage cash flow, how to reduce risk and how to build a portfolio that you can retire on young um and and usually replace your income within sort of seven or twelve years of starting with us um. So, yeah, that's really the journey and just want to get people excited and pumped about the future absolutely alex, that sounds exciting.
Speaker 3:Replace your income in seven to 12 years yeah.
Speaker 2:so most people think you retire off net income from property, which would take a lot longer, probably 20 to 30 years. But when you learn how to retire off liquidated capital growth and even you can add development profit to that you can normally retire on about 15 to 25% of your equity, which is probably five to seven times the net rental return of most properties. So it's learning how to live off the whole return of the property, not just net rent, and there's a bit of science and a finance strategy to that, as well as getting the ideal markets.
Speaker 1:Do people?
Speaker 2:come to you.
Speaker 1:Richard with one property, or for their first property, or 10 properties. When do they sort of start talking to you?
Speaker 2:uh, as soon as they read an article with written or get referred by a client, you don't have to have any um, ideally you just need a minimum deposit. But, yeah, we can get people started on as little as sort of $50,000 to $70,000 in the more affordable markets, often the ones that are booming. Yeah, most come in from Sydney. We're Sydney-based or Northern Beaches-based. We've been writing a property column for Northern Beaches and Pitwater Living Magazine for about 15, 20 years now. So most come in with equity in their home and then we teach them how to use that effectively and safely. But you don't need to. You can start with just a cash deposit.
Speaker 3:So, richard, your favourite at the moment? Where's your favourite? Are you sort of recommending stuff based on price range or people's, your buyers' sort of lifestyle, or where's your favourite place to buy at the moment?
Speaker 2:yeah. So our favorite is still adelaide, um, yeah, for a lot of reasons, um, but. But perth and brisbane are still right up there. But a big surprise will probably be to most listeners is darwin. Is is really been hitting our research radars for a couple of years now and probably has the strongest fundamentals in the. Well, it does have the strongest fundamentals in the country. It's just we're waiting for the human reaction to that uh, because, as you probably know, people don't respect, uh respond to fundamentals instantly in property. It probably takes one to three years for you know the crowd behavior to sort of take over and start to get the growth what's one or two sort of things that hit the radar, get it flashing yeah.
Speaker 2:So, um, yield and affordability are big, um, but one of the biggest things and we might show this on a graph one day, it's a bit of our IP so we're a little bit sensitive about it is the relative price difference to Sydney. So we use Sydney as a bit of a benchmark. It was, you know, the first month colonized and the one that got a head start from all other markets. And when you map on a graph the price difference between you know another market and sydney, you get this recurring price difference. Sydney will normally grow first for seven to twelve years and it will get to double, even triple, the value of some of the other markets. And that big price difference is like a magnet or a vacuum that helps drive the other markets. So when Sydney gets really unaffordable and really expensive and all the markets appear much, much cheaper, that price difference drives behaviour and the other markets are often way more affordable with higher yields.
Speaker 2:And one of the key tripping points for a market from Market started boom is often when yield gets close to loan repayments. So renters start then becoming buyers and that accelerates capital growth and starts the whole. You know psychology of the cycle, the fear of missing out and momentum in the market. Um, and then you know capital growth will outpace income and rent. Growth is sort of five to twelve years until it gets to that glass ceiling. So there is a real cycle in property and you know, one market can honestly grow by 10 times more than another for three to five years, even seven years um so are you cycling people out of markets and into markets, or you just put them there for 20, 30 years, or how do you do that?
Speaker 2:Yeah, we do now. Once we got our research to the point where we were sort of 90% to 95% confident that you were going to make back your buying and selling costs within a year or two and then certainly make it it back by, you know, five plus times over the next sort of 10 years, then we did start to advise to sell. Obviously that's you got to be a lot more confident. To advise to sell is one thing. To pick the market about to boom and it is another whole level of confidence to advise someone when to sell. So we started that about 13 years ago, after doing it for about 17 years and realizing a few of these really science-based measures and metrics on how differently two markets are likely to perform so yeah, we do now. On how differently two markets are likely to perform so yeah, we do now.
Speaker 2:And when you do sell, it's a massive opportunity if you have a home loan. Well, if you don't have a home and you've got investments, then that can be a great time often to then buy your home. Or if you do have a home with a reasonable amount of debt on it still, then when you do sell an investment, it's one of the best ways to really quickly pay down your home loan, if not pay it off. We normally get a home loan paid off in five to eight years by investing in property and then selling it when it's had the sort of 50 to 100 growth, and paying your home loan right down or off. And they're really big moments for us there where that's when it really goes beyond numbers and really hits you in the heart with emotions, when you help people actually pay down their home or pay it off, um, and then really realize how they can be on on an exciting path to financial freedom and what about the?
Speaker 3:is it it look success rate? Obviously that would be something with clients when they're investing and they're talking to someone like yourself. So what would be the like success rate with clients, would you say? You know, half of them do really well, 80% of them do really well. Are they all great stories?
Speaker 2:Oh look, all markets are going to grow eventually and so we're just in the markets that usually have the highest yields and have already started their boom, and most of those markets have been flat for five to 15 years. So the poor period of growth is behind you. When you look at every market that's having a boom, you notice the most common thing about them is they had a plateau or a negative run for five to 15 years. So that's the. We just wait for the green shoots and the, you know, for it to go past that six or seven o'clock in the cycle, because it can sit at six in the cycle for longer than you expect it almost always does. So it's well, essentially it's pretty much 100%, because it depends what you call, you know, success. Is it some growth, is it any growth, or is it above the long-term average of sort of 9% growth, or is it above the long-term average of sort of nine percent? So in the medium term it's everyone's doing well and where we'll diversify, most clients come in because we're buying in the affordable markets. Well, they seem really affordable relative to Sydney, usually until then Sydney becomes the market that's about to boom. You know most clients can often buy you know two to five properties in those marks, because they're normally seven to nine hundred thousand, with you know sort of four and a half to seven cent yields so you can. Then you can start to diversify into the top two or three.
Speaker 2:So your growth over the medium term, over that sort of five to seven years, has has always been great. We did. There was a time we got into Brisbane units a little bit too early. Term over that sort of five to seven years, has always been great. There was a time we got into Brisbane units a little bit too early. They had been flat for about seven or eight years and all the data suggested that it would start growing, and so there was probably about ten years ago. There was a few years where Brisbane units weren't growing and and those damn developers just kept building and building and and oversupplying the market more than we expected.
Speaker 2:So that's one thing that's really hard to judge is, you know, a bit like melbourne right now. You know melbourne units should be growing. They have been flat for about 15 years. It's quite extraordinary. It's a brilliant city. Um, it should be growing. But it's just the confidence has come out of the marksman flat for a long time. Um yeah, and, and the developers down there are prolific, they, uh, they will just keep building. Um, so I think that's very one line.
Speaker 3:I can't go in there saying it.
Speaker 1:Supply is the enemy of capital growth, I have to say it's so true.
Speaker 2:Some of these suburbs we cross-compare the supply, it seems infinite yeah yeah, and it will normally feel more that way when the market's been flat and hasn't been growing. But absolutely, you know there's a lot of developers out there. Most of them actually, will only build in the same market they live in and, you know, normally when they've been doing really well, through a boom they'll build up a lot of equity and cash and probably excessive confidence and then keep developing through the plateau and keep over supplying it when it's been flat. And some of them are just and most of them are incredibly determined and successful at what they do. So you know, they can often afford to keep supplying the market even though the fundamentals are not ideal at the time. Um, so we'll, we'll educate developers as well. Uh, most of them, you know, are way better at developing than we are. Um, and you know, and and great at their job. Um, about building great properties, um, and doing that effectively, efficiently. But not many really look at the different markets and really try and understand well, should I be developing the market I live in or should I be developing interstate, where it's about to boom a lot more? Um, and is, and it's highly undersupplied? Um, so you know that's what we focus in. We're one big country, we're the same currency, we're the same interest rates, um, but people move interstate when a market is much cheaper and that helps really drive the market.
Speaker 2:And difference in growth. For you know, seven to 15 years um, adelaide's had four and a half times the growth of Sydney in the last six years and Brisbane's had about three and a half times. Now that's just growth. When you add total rent, it's probably been five and six times Sydney in that time. And you know Sydney's still done okay to well, particularly if you picked the eyes out of the time in. And you know Sydney is still done okay to well, particularly if you picked the eyes out of the timing. If you bought in the middle of COVID, sydney and Northern Beaches have done exceptionally well since that low point. And it's never to say Sydney is bad. Sometimes it's the best performing market, sometimes it's the worst. But every market is like that. They never the best, always it's. It's actually impossible, because when one market is well ahead of the others, then that relative affordability is is like a big magnet, um, or a handbrake um.
Speaker 3:So so, richard, what I think um gets me with you there, um, things that gets me rich.
Speaker 3:Richard, when people make comments about versus, you know, comparing states and things like that, my sort of my hair pricks up on the back of my neck a little bit because I think there's distinctly, if you go, you know there's regional markets and we can isolate out, you know, metro and regional, which is a significant isolation to do in in.
Speaker 3:Well, you know, no one, everyone sort of just just lumps it all together and that data sounds better, um, or they'll, they'll look at like because I I think if, if I go across any of the states that I love in, um queensland, um victoria or or or sydney, within those states there's regions that there's no chance I'd put a dollar in there, um, so, yeah, I find it really interesting with on a performance basis, because we've seen, whenever I see data and I can, I'm probably as biased as hell, um, but whenever I see data, and I'm probably as biased as hell, but whenever I see data and I compare it to the northern beaches, I go yeah, nah, nah, but you know I'm comparing a region that has 100,000 properties and I'm biased towards those 100,000 properties and performance. Whenever I rack that performance up against any, any state or area, it's always like yeah, no, normal beaches are still real good. Rental sale overall yep yeah, look, we're.
Speaker 2:We're cautious with regional, um, probably beyond cautious. We almost never do regional because it's this you know, we've got, you know, seven big cities that have really diverse economies, you know, and there's always two or three of those big cities growing well to very well. In fact, they rarely go backwards. They can a little bit, they can sit flat for a long time for sort of five to 15 years, um, but there's, there's always a capital city that has been last 80 to 100 years. Anyway, there's always been one or two capital cities booming, growing really well. So, and regional cities, they're harder to pick and they're more fickle. All right, it's because of smaller populations, it's. And they're more fickle, all right, it's because of smaller populations, it, you know, it can just take a change to, you know, if there's a mine or a big industry sector there for it to really change without notice, and it can be a lot harder to predict. So, yeah, we're a big fan of sticking to capital cities and picking the eyes of those capital cities. Though some cities, like sydney, are enormous, you know, geographically, and you can have, yeah, you know, units booming while houses might be going flat, or the opposite, and then, you know, normally the ripple starts in the, the higher value areas in the city and the coast, and then it ripples out for you know a few, at least three years in a city the size of sydney, and then normally houses go first and then usually one to four years later, units will follow. Um, you know, covert can really change that, because where do people want to live during covert? So you can, you can always pick the eyes out of a capital city, and especially when you've got seven of them, um, you know you can. You can always find good, far more consistent and safer growth in a capital city.
Speaker 2:The research needs to be next level. On regional, but sometimes you know when the capital cities are really expensive and just trying get in your first property, some of the regionals can be good to get started. But you want to, you know, have some exceptional research to be more confident of it. But if it means that's the only way to get started, then don't rule it out. It's better to get started in a regional city that's about to grow and then use that equity then to get into the capital.
Speaker 2:Um, so, yeah, we occasionally do a little bit of regional. What regional for us was more hunter valley, um, you know, which is really western newcastle, um, and we followed the boom from sydney up the northern beaches, through central coast, up the south coast of Newcastle, and then it literally flew, uh, flowed uh west of Newcastle and up the north coast. So you can track the ripple. The ripple is real. In fact we're building a thing called a ripple radar, so you know, a bit like the rain radar for um, which you, you have a higher, the higher colors for the higher amounts of rain. So that happens for capital growth. So you can literally track the ripple and we do it all the time, but more manually. So we're just trying to track it more electronically and visually.
Speaker 1:Richard, another question over here are you? Are you facilitating the buying, you know, then putting the tenants in if it's an investment property? Are you doing all of those steps or do you sort of hand people?
Speaker 2:Yeah, we either do or manage. So manage the service. So we don't do property management in-house, neither do we do sales in-house. We give it to people like you. You guys are way better at that than we are. We will do the advice and the strategy. We do the finance, uh, in-house generally. Um, yeah, we create the plan and the strategy and then we will source the properties, um, and set up the finance and the plan and then we'll find, you know, good property managers in the area we're working in and get them to manage that, and when it's time to sell, we'll get them to sell. I, you know you run rings around me guys, in selling. You know you're way better at that. It's a real skill set to sell property well, isn't it? And I know I've been in property for years, but I know most agents are far better at me than selling. It's a particular nation. That's not what we specialise in.
Speaker 3:So, richard, before we go, we're going to get you to rank Queensland, new South Wales, victoria, northern Territory, wa.
Speaker 1:Preference.
Speaker 3:Preference number one.
Speaker 2:Yep, yeah. Number one is this is not a Novak opinion, this is a Richard Shepard opinion Yep. Yeah, yep, yep.
Speaker 3:Number two.
Speaker 2:Number one is Adelaide, two is Perth, yep. Three is Brisbane, but fourth yeah, three is brisbane, um, but fourth and it's likely to become first in the next year or two, is darwin, who would have thought that's a pick yeah, fifth, fifth war we don't go to fifth. Um well, fifth, fifth sorry, here we go is Melbourne Units.
Speaker 3:It's New South Wales. Where did you put New South Wales?
Speaker 2:in that.
Speaker 3:You're putting New South Wales behind all of them.
Speaker 2:Yeah, yeah at the moment, Look, mostly because New South Wales did better than all of them sort of 10 or 15 years ago. You know it had its boom from 2008 to 2017. Then it's been a bumpy ride since then, so it will do okay to well. Everywhere is going to do better for the next 10 years than it has for the last 10, is my belief. If you want to buy a home and you really want that home, it's going to grow on the northern beaches, so buy now.
Speaker 3:Are you going houses or units?
Speaker 2:uh, oh well, it depends on what as an investment. Um, units, yeah, the um, because the growth has been bettering houses through covid um, and the price difference is one of the biggest it's ever been between houses and units and the yield in units is much better at the moment. Um, yeah, units, for sure in the Northern Beaches. If you, if you're really stuck on Northern Beaches and want to focus on that and you'll still do okay, well, um, it's just um, if you can't afford to get in the Northern Beaches or you want to make higher total growth and yield than the other markets at the moment. I did mention, though, that there is one suburb that we're just starting to recommend in Sydney and it's Sydney Olympic Park Units. Yeah, I was surprised Mostly because the boom missed it for about 10 to 15 years, and now, all of a sudden, the Northern Beaches has kind of moved to the Northern Beaches, surf has kind of moved to Sydney Olympic Park with a new wave pool, and that will help the market grow better.
Speaker 3:So what's your punt, billy? Next 10 years.
Speaker 1:So I'm grab, what's your pump? What's your pump, billy? Next 10 years? I, I, I like the fact with with um any property purchase. If you can kind of have a bit of a dual purpose, I think that's clever. I think if you can buy it like I do a lot with first time buyers and the number one driver in their decision-making is affordability. They just look at a unit 700,000 or buying an investment in Perth that can go and live in five years or so. But I think if you can buy a base and you can live in it, you take advantage of all the stamp duty incentives and first-time buyers sort of help. That would be my go.
Speaker 3:Right, boys, we're going to play this show in 10 years time. I'm punting northern beaches units and we're going to play this show in 10 years time and see who was the highest in capital growth and rent combined in those, um, in those places and um, I'm feeling lucky. Whoever, whoever wins, uh, gets you out of the beers. Huh, that's right. Yeah, yeah, it's a big night.
Speaker 2:Thank you so much, richard. Thanks for having me on the show. Guys, real pleasure, um, yeah, and uh love to come back before 10 years is up, maybe, mark yeah 100, but uh, but I'm.
Speaker 3:I'm putting this one in the lock in the vault, though we're gonna pull this one out yeah, yeah, record it. Hold me to it record hold it, hold it all right, take care.