TRANSCRIPT
 
0:00:00
Tom Panos
Johnny, how are you going?
 
0:00:01
John McGrath
Good, Tom. Very good. Nice to be here.
 
0:00:05
Tom Panos
Yeah, so we’re going to talk about this is Tech Tuesday, and Realtor sponsored this once a month. We call it Tech Tuesday, and it’s just a basic conversation on all stuff tech. And I sent you a message early this morning, John. So I got into real estate in 88. Think you got in just in the middle 80s, mid eighty s. I still remember the day that my first employer got a fax machine in 1991, and he put this machine, he connected it up and he said, look, I’ve got great news for you. We’re not going to have to sort of go in and fold letters and send them out by post and wait a week or two weeks for a reply. We can now actually just put these pieces of paper through this machine and they’ll get it instantly. And it was a bit of a game changer, particularly with solicitors, like things like order on the agent where things had settled or anything.
 
0:01:12
Tom Panos
I’m thinking about it. That was 1990. That was when the fax machine but he did say we can only use it if someone else we send it to has also got a fax machine. Right. You couldn’t use it otherwise, John, but I just want to ask you, you were listing and selling real estate during that period. What did you have as a CRM system?
 
0:01:39
John McGrath
I started with a three x five card box, a little Timber box with three x five cards that I used to write out all the details of everyone I spoke to. And when I became successful, I had two card boxes. So that was my technological advance, was buying a second cardbox. Yeah, it was very different in those days. A lot of people now, obviously, the younger brigade, they can’t believe no mobile phones, because back then you had to ring someone at home or work and they had to catch you at work or home. We used to put our home numbers on the board as well for inquiry. But early on, there’s no mobile phone numbers, no mobile phones. And when they arrived, as you would remember, Tommy, it used to be the size of a briefcase, and you used to have to carry it around feeling very sort of dogish with it and no internet, so you used to put signs up on balconies and little ads in the paper, and you have to type ads up and send them to News Limited, Fairfax and so forth.
 
0:02:42
John McGrath
So it’s very different. I remember coming back to Data apps now with things like CoreLogic. I had to go to Walara Council, which was the council that I worked in mainly, and I could take a checkbook and I had to ask to do property searches, and then you go through them and then say, Great, well, that’s $5 and you have to write out a check. So my boss would sign a couple of blank checks, and I’d go and then write them out. So it was very different in those days. And I do think that today, with the technology that’s available, it does allow people to go to a whole new level. And it has happened, obviously. We’ve got agents doing phenomenal numbers.
 
0:03:19
John McGrath
I remember one of the first things, Tommy, you’d probably remember this. There was a Wang word processor. I couldn’t believe that because I thought the golf ball typewriters that went really fast. They were incredible. And then this machine arrived that looked pretty much like today’s computer. And you’d type it in and you could customize it and you could go back, and it would invisibly erase and all of those things.
 
0:03:43
John McGrath
We’re dating ourselves, but that was just how it started. So back in those days, we didn’t know any difference, so there was no reason to complain. But nowadays, technology advancements been phenomenal.
 
0:03:54
Tom Panos
So if you think about it now, John, the reality is that I used to drive down the streets of Maryfield in Newtown, identifying the data sign board went up, knowing that in three months, if it hasn’t sold, it might expire. But my system was I would drive up and down the streets. Today, an agent goes on a CoreLogic RP data, presses a button, it shows them every listing that’s been on the market for more than 60 days.
 
0:04:20
Tom Panos
Today, you can send a video off to someone on a property, and they look at it and they like it. They come back, they give you an offer, they sign it on DocuSign or Realtors Sign platform, you get a deal done. I mean, the truth is, tech should mean, John, that we should be more efficient than we’ve ever been in real estate. If you think about it, and I.
 
0:04:48
John McGrath
Think we are, you and I probably like to think we’re as efficient. Back then, certainly service levels were probably higher because I think we had to work harder to build rapport with people and stay in close contact. But, yeah, technology nowadays, you’d have a boot full of sign boards and you’d get them out and put them on the balcony. You go back to the office and hope that someone would bring you. And nowadays it goes onto Rea or Domain, and it can go globally. You’re getting calls from London this afternoon. So, so many things have changed, and yet also, Tommy, so many things have stayed the same. I mean, like auctions and open home inspections and just great, good old fashioned customer service.
 
0:05:32
John McGrath
They’re still critical building relationships and connections. And I think as technology gets more and more pervasive, in some ways it’ll be a leveler, because those people who are a bit disorganized might be able to catch up a bit with those. Because I think organization was one of my core strengths when I was younger. Starting out, I was super duper organized, and therefore I did everything I committed to and promised to and was very efficient.
 
0:05:55
John McGrath
I think nowadays, possibly less organized agents through having a PA and the technology that’s available that’s leveled the playing field. But the thing that hasn’t changed is some people are better with with people than others. Some people talk straighter than others. So I think even though technology is leveled of playing field, there’s still plenty of room to stand out.
 
0:06:20
Tom Panos
Okay, so Pete Matthews said to me, he goes, the thing about McGrath is, I noticed when COVID started, McGrath went all in with tech. And he goes, I only look at my perspective. I saw them jump in on pitch, which is the pre listing document, the price update document, which again is pitch. You’ve also now got sign, so sign and sell. You’ve got those Chris mord. Pete Matthews goes to me because I said to him, why do you reckon McGrath are so good at pitch? Sign, sell. That’s it. He goes I go, Why are they so good at implementing? And he goes, It’s really simple.
 
0:07:14
Tom Panos
He goes, because when the company at a leadership level says, we’re going to go down this path, this is how we do things, it sort of runs through. Whereas I find, John, with tech, everyone goes off and gets the subscriptions on everything, but they don’t actually end up using a lot of the tech, right? So there’s this thing about bleeding edge versus cutting edge, right? What actually can help you list and sell and what stuff do you get there that complicates it?
 
0:07:43
Tom Panos
What can I ask John? Over the years, what technology have you found cutting edge and what was bleeding edge and what sort of a tech that you’ve sort of kept using through COVID and using it? Now, I know that you run your group, your group meetings. Now you do group meetings on Zoom all the time, isn’t it?
 
0:08:00
John McGrath
Yeah. Well, look, during COVID we felt there’s a couple of things that are going to be critical. One is showing properties virtually and holding auctions virtually. So Pete’s technology at Realtor was a godsend because we, and I guess many others continued through COVID unabated because of real time options. I’m not sure what Pete’s calling now, but I think it’s part of the sell process. Signing on glass, of course, was something you could I mean, nowadays to actually get in a car, tom and drive from your office 20, get a vendor sign and then drive another 10, sort of pollute the environment and chew up time and 3 hours later it’s done, versus sending all parties in real time. So things like the sign on glass are brilliant.
 
0:08:47
John McGrath
So we committed to every auction, virtual auction and live streaming, obviously checking people in and so forth, that was already a part of what we used. But we went all in and we just decided if we’re going to do it, let’s get serious about it. We utilized zoom. We did a webinar. This is during COVID Not now, but we did a webinar every day at 09:00. I used to watch Gladys Perezical and tell me, Come on at 11:00. And it was kind of comforting knowing that every day you’d be getting a little update from the premier of New South Wales.
 
0:09:21
John McGrath
And that made everyone feel a bit calmer and in control. So I thought, well, let’s do our version of Gladys’s 11:00. And we did it. It could have been 830 or nine. I think it was 830, actually. We did a half hour every day just checking in, giving people some inspiration, hopefully, and some information about what was happening. And if there’s anything we needed to update them on, we would. But otherwise we just try and give them a point to dock in during the day.
 
0:09:48
John McGrath
So we definitely use and still we now do weekly webinars across the group. So everyone in our company up and down east coast of Australia gets to watch morty Troy and I do a weekly webinar, and it’s recorded afterwards. So I think things like Zoom for meetings are incredible. Arm at Nayak, and I know you’ve spoken to him on your real estate gym, Tom, and he’s speaking at some of the great events around the place. And Armot uses his Tuesday afternoon, and instead of going to see every single vendor, because he’s now dealing with we did 22 sales last month, so he’s probably dealing with 30 vendors ongoing every day.
 
0:10:31
John McGrath
And so he has 15 minutes Zoom calls with them, which rather than going somewhere, finding a park, getting out, going up, having a cup of tea, coming back out, which takes an hour, he does quick, sharp 15 minutes face to face. So I think Zoom has been a really good and strong piece of technology usage, but again, it’s only as good as you use it. As you said, Zoom is there and available for everyone. In fact, it was there well and truly before COVID but COVID forced us to use some of these things just like online auctions, and we don’t use online auctions presently for everything, but we use them a lot, but they were available beforehand. Virtual tours. I know. Maddie Edwards at our ballarat office.
 
0:11:13
John McGrath
He used to do virtual inspections, and he would set them up and they’d take about half an hour, and he’d take his iPhone around, smartphone around the property, and say, Everyone, here we go, and here’s the front room, and have a look. And I’ll take her up into the attic. And he just used the technology. And Maddie is not a guy I’d call technologically sophisticated. He’s a country guy, calls a spade a shovel.
 
0:11:37
John McGrath
But he just grasped the technology and started using it, and he got phenomenal results during COVID from that. So the thing about this technology, back to your point before, does leadership matter? I think leadership’s got to embrace it. I personally get very excited about technology when I see something that’s out there. And I often send little TikTok videos to you when I see something that’s interesting.
 
0:12:01
John McGrath
I love sharing them with our team, and I’ll send them to our head of technology. What are we doing about this? What do you think about this? Could we talk about it tomorrow? And we discuss a lot of these things, and I’m a great believer in ready, fire. Aim is if it looks interesting, let’s give it a crack. Let’s not wait and do a thesis and a white paper and debate it with committees. If it looks interesting either, trial it as a company, trial it with a few individuals, trial one or two offices.
 
0:12:28
John McGrath
There’s plenty of ways to test technology and get the feedback, but until, Tommy, you actually get it in the marketplace, you can’t really test it. You’ve got to actually get some real live feedback from consumers and from agents. So yeah, I think Zoom critical rea technology. And as you know, I was early involved with Rea. That’s been the biggest, by far, technological advancement and change in my 40 years, and I’d imagine yours, too, Tommy.
 
0:13:00
John McGrath
The fact that you can list the property at 09:00 and get an inquiry from New York at 915 and people can go online and watch videos and all the great things, look at floor plans, look at carousel of images, make offers, it’s really phenomenal. So that would have to be the greatest. Well, I guess the Internet, which preceded Rea has been the greatest game changer. But Rea as a piece of technology or a website, if you will, has been the biggest change, I think, of all.
 
0:13:31
Tom Panos
Yeah, I think, John, I look at my 35 years in real estate and I look at big moments in the industry. One of those was franchising, when if you remember that era of franchising, it just sort of happened like a whirlwind. All these brands started popping up. That probably was the first big change in the structure of real estate, I think, John. Then the other two are Realestate.com, which Realestate.com
 
0:14:03
Tom Panos
took to someone’s hand, someone’s computer who’s strong and who’s not. This is what’s happening in the market. It was actually social proof on steroids Realestate.com, which is good if you’re a great agent, because things became obvious out there and not so good if you’re not a great agent. But, John, even when I was working in the media and my relationship with you and McGrath was that of a media supplier, this is before tech was tech.
 
0:14:36
Tom Panos
You were always fascinated. You’re always fascinated on how tech could actually be an enabler, not a substitutor for people, because we both agree high tech, high touch is probably the formula that you need in the world of real estate. But, John, Pete Matthews also told me that you’ve been working on for some time, an app that has pretty much got everything that’s going to allow a McGrath’s agent to run their business.
 
0:15:07
Tom Panos
How far is that away, John?
 
0:15:10
John McGrath
Well, we’re in the final stages and we’re beta-testing it right now, actually. So the problem that we found, Tommy and I think a lot of agencies have found the same, is that there are now so many different apps and platforms like Realtor, and most of them you have to sign on, sign off, and then go somewhere else and then find a password. So part of the reason we wanted to develop an app and our app, one of the things it does is bring all those together in a single environment, McGrath environment. So you don’t have to go in and out if you want to get to Realtor. Agent box. It’s all done kind of within the app.
 
0:15:45
John McGrath
And we looked at that and we still felt that once an agent leaves a lounge room, it takes them often four to 8 hours, depending on how complex it is to actually get a property ready for sale. Ring up auctioneers, ring up photographers, book in full, or planners, pest and building report. So my vision was, and still is, what if when you left the lounge room, everything had already been done magically for you.
 
0:16:14
John McGrath
And then the next and only task for you to do is go and sell the property. So we’re developing and implementing an app that’s going to allow all of that to almost invisibly happen while you’re with the client, including helping the client get repairs done and book in pests and building reports, auctioneers invites go to diaries. So there’s nothing. Once it’ll just be taps on your iPad or your phone, you’ll get to the end of it, sign on glass through Realtor and it’ll all be one environment.
 
0:16:47
John McGrath
Because I do think that that is the issue with technology now. There’s so much of it and most of it is not interconnected. There are APIs that connect them functionally, but experientially. You’ve still got to go in and out of different ones to get there. So we’re wanting to bring all that together, and we believe we will with the new app, which, as I said, it’ll be in the field basically as of next week testing. Okay.
 
0:17:12
Tom Panos
Now, John, we’ve got a big real estate audience that’s watching on Facebook. We’ve actually even got a couple what, we got 183 people here on Zoom as well. Just before we came on, I quickly went on and had a look. The RBA put rates up by a quarter of a percent was 50 50. Whether they put if you ask the average person, some said it’ll go up, some said it’ll probably just stay down the way they did last month.
 
0:17:41
Tom Panos
Did it surprise you that it went up, John, or did you expect that?
 
0:17:45
John McGrath
Look, I was 50 50, Tom. I think that the reserve banks is very laser focused on getting inflation back to sort of two, three, 4%, or at least under four to start with, and then eventually to one to 2%. And whilst it’s heading in the right way, some could argue it’s been painfully slow. Just by ten now, eleven, I think, rate rises. So I think it’s a difficult one because it feels like they’ve only got a one trick pony, which is keep jamming interest rates up and up and up and up.
 
0:18:17
John McGrath
So the problem with that is it’s going to start creating as many problems, potentially I could envisage as it is fixing. So, not being an economist, I’m not sure what other options they’ve got, but I do know when you go to IGA, instead of costing you $40 for a basket of goods for the day, it costs you 80. And when you fill your car up, instead of 120, it’s 200. So there’s a lot of things contributing that are not interest rate related to it.
 
0:18:50
John McGrath
So, look, from my perspective, just get it done with if it’s got to be done. If you got to do one this month and one next month, get it down as fast as possible. And in the meantime, I would back the banks to try and find ways to support their clients. Banks and lenders don’t like selling up their clients. It’s the last thing they want to do. And most of them, as we saw during the GFC, most of them will find a way to support or give enough time to their clients to either sell an investment property or give them a small honeymoon of interest and so forth.
 
0:19:24
John McGrath
So, yeah, look, it’s one of those things in life, but we can’t change it. And as you and I always say, you got to focus on things you can change. And that’s one we can’t.
 
0:19:33
Tom Panos
Yeah, but in the market, John. I mean, just in the last four or five weeks. I know that I’ve been talking to a lot of your agents. I’ve speak to you and Troy on the podcast before we go on, and we always just touch one of the agents saying it’s been surprisingly an extremely healthy market in the last five weeks. Great prices, lower days on market, highest clearance rates that we’ve seen since probably May 2022.
 
0:20:03
Tom Panos
So it appears that from I know what you’re saying, that we’ve got this inflation issue, but real estate for the last five weeks seems like it’s kicked off again. How are you finding it with your offices?
 
0:20:16
John McGrath
Look, yeah, exactly right. Tommy Scarily strong. It feels to me that buyers have just they’re all lining up again, they’re following each other. I think there are still some underlying issues within the economy that need to be fixed, and I think that’s going to take the best part of twelve or 18 months. I would have liked to have seen this, to be honest, more of a period of stabilization, but it feels like everyone’s jumping back on the bandwagon again despite interest rates going up ten or eleven times.
 
0:20:46
John McGrath
So yeah, it’s a little bit on the scary side, but I guess a lot of people default back to property. There’s been a lot of wealth created, especially in the bigger cities and the bigger regionals around Australia, and a lot of people are wanting to put it into either their lifestyle property, their main or their secondary property. And I know you’re one of the Byron Bay investors up there and that’s a classic example of people everyone wants a piece of Australian paradise in a great sea change opportunity.
 
0:21:19
John McGrath
So I think that that’s the situation. Listings are tight because no one can find anything else. So it’s like a self fulfilling negative circle that I’m not going to sell until I can find something. Well, if you don’t sell, no one’s going to be able to find your property because if you’re a vendor right now and you were tapped into the market and talking to agents and attending options, you’d be saying, well, what a perfect time to sell, it’s a strong market.
 
0:21:45
John McGrath
But they’re still not because they’re saying, well, but if I sell, I can’t find anything. So the cart and the horse are both next to each other and I guess we’ve just got to see if people are going to be prepared to take the leap and go to market, which that’s what I’m saying to my clients. I said, look, the reason the market is so strong is exactly because you can’t find anything. So you can’t have it both. If you’re a seller and I say this to my friends, if you’re a seller, you’ve either got to take the leap now or if you wait until there’s an abundance of things to buy, your price is going to be down. So maybe you just jump in and buy and sell. And then if you have to rent for six months, which is the other issue at the moment because of such a lack of stock of rental properties, rents are up 25% in most parts of Australia, some more.
 
0:22:31
John McGrath
So anyway, it’s all fun. And when I say it’s fun, I don’t say that in a silly way. I mean it’s all a part of the game of life and the game of real estate. And as I said, you can only deal with the cards you dealt. And right now we’ve got interest rates that are going high, we’ve got buyers that are turning up to auctions. Despite that, we got good property that’s selling for 200,000. I watch your TikToks and reports of a Saturday night and some of the results you’ve been getting.
 
0:22:56
John McGrath
Same experience that we’ve had. It’s hundreds of thousands above what we expected. Interesting.
 
0:23:03
Tom Panos
John Craig ASPI has asked a question here. With the ongoing trend of remote work and the increasing popularity of flexible work arrangements, how do you see this impacting the real estate market in the coming years? Do you think there will be a continued demand for larger homes in suburban area, or will we see a shift towards more urban living and smaller, more affordable homes? John I see it. The cafe around the corner for me, Hungry Grasshopper. It’s very clear to me at around 1030, you’ve got all these people that are working from home in Zoom. They’re ducking off and they weren’t there three years ago. They’re ducking off and they’re having their coffee break outside the cafe.
 
0:23:48
Tom Panos
And then the way you can tell is, generally speaking sorry, I don’t want that’s ringing. The way you can tell is, generally speaking, is they’re wearing a nice top at the top and a little bit more casual down the bottom. So you can tell that they’ve been sitting there, sitting there on a screen. But do you think the way that we live in Australia we’re going to move towards is the kind of house going to change because of this structural change of not going to the office?
 
0:24:17
John McGrath
Yeah, it’s a great question from Craig. I think COVID has changed the world forever, not necessarily in a bad way, other than those who lost lives, but or got long COVID, but there’s several layers of it. Tommy so let me answer Craig’s question in a few ways. Number one is I was talking to one of my neighbors. I was walking Stintzel and Pitts Pickle the other day, and one of my neighbors works for CSR Big, used to be a sugar company. Now it’s building supplies company, massive multibillion dollar.
 
0:24:47
John McGrath
And she was saying to me, oh, it’s great working, working from home. And I know that she’s a senior executive. I said, when you say working from home, what do you mean? She said, well, we work from home Mondays and Fridays, and we go into their office Tuesday, Wednesday, Thursday. And I said, is that everyone? She said, yeah, unless you’re in like a warehouse and they need you to move pallets around.
 
0:25:08
John McGrath
Everyone junior staff, senior staff, executive CEO, everyone works from home Monday to Friday. Now, CSR, I don’t know them well, but I imagine they’re a big, probably conservative company and they’ve just made a mandate is everyone Monday to Friday? So you think, how does that impact real estate? Well, possibly husband and wife or the two main owners of a property are both at home Monday, Tuesday or Monday. Friday or Monday through to Friday.
 
0:25:36
John McGrath
So the shape of the house has to change to accommodate that or you’re going to find so many divorces, it’s not funny. People need to be able to create space to do Zoom calls like this. They need better connectivity. They’re going to have more leisure time, less travel, commuting. So that’s probably, for most people, 2 hours extra at home that they would have spent on a train. So I think that it has already and will continue to change the shape of the home.
 
0:26:06
John McGrath
People will need a bit more space. I think it’s also a lot of people that were dreaming of moving to the Central Coast and living in TerraGo one day. They’re doing it now they’re saying, why would I wait till I’m 65? I’m 58, I only have to go to work two days a week. I can work the rest of the week from home, wherever that might be. So I think the reason that the regionals, like Illawarra Hunter, Central Coast, Gold Coast, Sunshine Coast, all the great regionals of Australia and that’s only a few of them, is that people are now saying, I’m going to go there early, I’m not going to wait. Life short.
 
0:26:42
John McGrath
A few friends died from COVID I’m now working from home three days a week, so I’m just going to take advantage and I’m going out for swims in the morning and I walk the dog and I’ll pick my pajama bottoms on and put a top and I’ll sit at my desk at 09:00, ready to block. That’s exactly what she said to me. She said basically, she said I was in my pajamas till cord to nine and my nine was my first, so I got ready and she’s a hard worker, for sure, but it was interesting what she said.
 
0:27:11
John McGrath
Commercial real estate, I mean, they’re saying that many buildings in the city and in and around the city are still 50% empty. So the deals, we’ve just cut a new deal. We’re moving offices at the moment as we speak, and we’ve just cut a very good deal, which is there’s many very good deals in the market because landlords want good tenants in their properties and they’ve got empty buildings or buildings with month to month tenants that are negotiating and haggling rent down.
 
0:27:39
John McGrath
So I think we’re going to see a different set of commercial buildings and some of those will be retrofitted into residential. Yeah, I think there’s been a lot of changes, but definitely the shape and location of the home because some people are moving to Mudgy, some are moving to Bathurst, some are moving to Terragill, but anything within two or 3 hours of a main hub airport, major city I think is just going to be in perpetual boom almost indefinitely.
 
0:28:13
Tom Panos
Yeah. John to me, the biggest change that I’ve seen is there was always this view, try and buy as close as possible to the city and if you can’t, buy the next suburb because that’ll go up. But what COVID saw is these suburbs that always went up at a lower rate than the inner parts of Sydney and Melbourne, they blossomed, and they’ve continued to blossom, because it appeared that a lot of people chose to say, hey, give me space and not a unit in town, because maybe I won’t have to go into town every day.
 
0:28:55
Tom Panos
And, yeah, that’s the other side. All over Sydney, even some marketplaces john that weren’t auction orientated markets out in southwest. Canterbury, Bankstown, the Hills, parramatta. We’re talking about Emit. I mean, every transaction that Emit does is an auction in Parramatta and Parramatta and units, units of that, I think nearly every deal he does.
 
0:29:26
John McGrath
Yeah. No, I agree. And look, infrastructure, I know we start we’ve been talking mainly technology, but infrastructure. And you and I are residents of the Inner West. I mean, I’m living at breakfast point and up until five minutes ago, to get to the airport, it used to take me an hour. It now takes me 20 minutes because of the West Connects tunnel, which kind of virtually goes from my door to the airport.
 
0:29:47
John McGrath
So you’ve got infrastructure, you’ve got technology. The Central coast is now 25 minutes closer to the city than it ever was because of the M Two and the north connects. And I apologize to all those that are watching that aren’t from Sydney, but the Sydney side doesn’t know what I’m saying. So I think a good agent and a good investor needs to be across all of this, watching what’s happening in your city or town, keeping an eye on the infrastructure that’s taking place, trying to figure out, as Craig asked, a great question, well, you know, what’s what’s the design of the future or the present?
 
0:30:22
John McGrath
It’s going to be different. Granny flat studios and gardens and so forth, because a lot of people actually don’t want to necessarily work in their home. And, yes, you can, you can have an office in your home, but a lot of people want to have, if possible, a second building, like a Granny Flat in the backyard. So I think that’s going to happen a lot. So it’s really interesting. So I think COVID, despite the horrible things that happened during COVID and it brought to us, I think there’s probably going to be some enhancements to all of our lifestyles as a result of having gone through COVID.
 
0:30:54
Tom Panos
Well said. So those watching now, if you’re not on real tear and you’ve got an appetite to get on Real tear, Susan, I might get you to just put a link up there realtair.com and go in. And John. That’s on us. John, that’s on the program with us. McGrath there have been long term users of it. I just want to answer this question. David Dyer, who’s a good friend and client of ours, Johnny, comes to all our courses.
 
0:31:21
Tom Panos
What are your thoughts on the property lifecycle? I’m finding that 20% of new listings in the market were purchased within the last three years.
 
0:31:37
John McGrath
Yeah, it is a good thing that David’s raised there. Tommy, I have heard that in previous times, and I don’t recall these, but in previous times, when there was a little bit of an exodus out of cities before for various reasons, and obviously the most recent being COVID a lot of people did make the move and then found out they actually enjoyed the city living and moved back. So, number one is, I do think there are going to be some people that move to Noosa or Byron or wherever, and just whilst they might love it, they might feel that they miss other things. And people back in Sydney or Brisbane or Melbourne, So there will be a little bit of that. I think interest rates is another unfortunate and obvious one, that most people, to save their main primary residence, will sell any secondary investment or getaway or weekend that they might have.
 
0:32:34
John McGrath
So I think that that will cause probably more so during this year than we’ve seen to date. We’ll see a little bit of that. Most people bought with interest rates at 1.9% and they’re now having to pay 6% and they’re saying, God, this is not fun. So, yeah, I think it’s interesting. And the other thing is rea we spoke of before, Tom, when you and I were selling, the only real way to market a property or buy a property was through the Wentworth Courier or the Innos Courier or the Courier mail in Brisbane. And it was pretty much a localized market because if I was in Sydney, interested in buying in Brisbane it was kind of pretty hard to keep track of it. Nowadays, I get notifications coming all day in your phone.
 
0:33:18
John McGrath
This property has been listed, this price has been adjusted, this home is open tomorrow for an hour. So I think a lot of people are moving around a lot more. They’re more mobile than ever before and they’re now looking at other options and they’re saying, a friend of mine’s moved down the South Coast, let’s check it out, go to Rea, check it out. So I do think there’s a few things coming together in a sort of a perfect storm that are causing people to move probably a little bit more frequently.
 
0:33:48
John McGrath
Having said that, with listings off the market right at the moment, you’ll probably find in two years, we’ll look back and we’ll see that on average, ownership during this period extended rather than contracted. I think you’ll find the contraction is still a fairly smaller ratio or smaller percentage. Most people are actually holding a bit longer because they’re scared of what’s happening and no one knows what’s happening in the economy, in the market.
 
0:34:11
John McGrath
So I think a lot of people are going to hang on and just sort of wait until interest rates stabilize and then see what the economy does and what the governments do and then they’ll sort of decide and they’ll make a move. Then the other thing, of course, is population increase. Immigration in Australia in particular, is spiraling through the roof and I see that as a good thing. And of course, it’s a catch up because COVID we had no immigration.
 
0:34:36
John McGrath
But that’s the other thing that’s going to be impacting supply and demand prices. In some communities, prices are going to be spiked by overseas immigrants and expats returning. So it’s all interesting stuff.
 
0:34:50
Tom Panos
Does it surprise you John? Eleven rate rises pretty much every month minus a couple of months. We had a holiday no rate rises last month in January where they don’t meet. Does it surprise you? Eleven rate rises are tripling of the interest rate yet there’s not much distress selling or listings falling off the mortgage cliff that people were expecting. Or am I wrong? Are you getting feedback? There is mortgage stress and there is distress selling?
 
0:35:17
John McGrath
No there’s a trickle, there’s a trickle but it’s not thank God there’s not a rush of mortgage sales. I think it comes down to a few things Tommy. Number one is some people just have the ability they cut down on their discretionary spending and they have the ability to tighten their belt for twelve month period because I think we will see rates hit a uturn at some point and come back once inflation has been tamed.
 
0:35:41
John McGrath
So I think there’s some people they’ve got the extra buffer in two is. I think some people have already made a move to sell either their home or their other property. So some people have avoided too much and they’ve been helped by a strong market. So most people haven’t had to take a bath in terms of that. I think that those two things and the third one is the banks. As I mentioned before, they’re pretty damn good. I mean the Australian big four banks for example, they’re amongst the world’s top ten or 20 banks in the world.
 
0:36:16
John McGrath
They’ve got a particularly good reputation and the last thing they want to do is call any of their clients and say I’m sending an agent around to put a board up. So they will do everything possible and they have done everything possible to try and come to an arrangement with a client to get them through this difficult period. So I think all of those things have meant that there’s been thankfully low number of mortgage sales. I’m sure statistically if you looked at the data mortgagee sales would be much higher than they’ve been in any average year but they still haven’t hit a point where I think they’ve become obviously spiked.
 
0:36:55
John McGrath
We’re selling some and we hate it in a way because it’s just horrible thing to have to sell a family up out of their home. But yeah, that’s the time we’re in for the next six to twelve months I think.
 
0:37:08
Tom Panos
All right Johnny thanks for joining us today. Pete was very keen to have you on. We see you as being the most influential person in real estate in the last four decades of real estate. The guy that introduced marketing, ebus structures and processes and was then good enough to actually create the largest real estate or actually largest business conference. I mean I don’t think there’s a forget real estate, I don’t think there’s a lawyer’s conference or an accountant’s conference or any sort of conference that gets over 4000 people attend that which you were kind enough to actually set up early on. Only a few hundred people went back then.
 
0:37:51
John McGrath
But.
 
0:37:54
Tom Panos
This month we have Eric happening for the 25th time. 25th time, and there’ll be four and a half people there. And I want to thank everyone that joined in today. I want to let you know that Susan’s put the Real Tear link up there. And one of the things that John’s covered here that Peter has reiterated with me, he goes when he looks at businesses that are using technology, well, it has normally been driven from a top down approach, which has happened at McGrath. And John, I’m looking forward to seeing over the next few months how your app ends up looking. And it sounds exciting. It sounds like what you’ve done there is just going to try and make it seamless for all the main things, whether it’s realtor or whether it’s a CRM system that it all works in a nice ecosystem in a seamless way. That sounds like that’s what you’ve tried to do.
 
0:38:54
John McGrath
Yeah, I know. You got to go, Tommy. Look, I’ve got no commercial relationship with Pete other than I love him as a human being. He’s a great guy. Realtor is a great product that we use. I certainly don’t get paid for saying it, but I support Pete wherever he goes because I think he’s a great person for the industry. Is he still the head of the Institute? I think he’s still there.
 
0:39:13
Tom Panos
He is president. Yeah, I don’t know either, John. He runs around, he does options. He’s running real tear.
 
0:39:24
John McGrath
Never flustered. And you never feel pressured when you’re with us. Phenomenal. And yeah, he’s he’s a dear friend. Yeah, we use all the Realtor products through our business and, you know, anyone listening, as I said, I got no commercial benefit from saying it, but they are great. I think they’re the Rolls Royce of the products in their class out there. So we haven’t seen any need to look elsewhere. We’re very happy and they’ll continue as we build our app. As I said, we’ll be using the Realtor product beneath the app, but it’ll just appear in a McGrath environment. So there’s lots of good things happening.
 
0:40:00
John McGrath
But yeah, the only thing I’d say is jump in, try this stuff, and just see how it works.
 
0:40:07
Tom Panos
All right, John McGrath from McGrath on Tech Tuesday. To all our audience, thank you again for tuning in. We’ll see you next month where we talk Tech every Tuesday, once a month. Johnny, signing off. Signing off.
 
0:40:18
John McGrath
Very well. Stay well.