Expert: Matt Barrie – Why house prices are the cause of today’s cost of living crisis

Bryce: [00:00:15] There is no hotter conversation than the Australian housing market. And boy, do we have an interview today. Welcome back to another episode of Equity Mates Investing Podcast, a podcast that follows our journey of investing and whether you're an absolute beginner or approaching Warren Buffett status. Our aim is to help break down your barriers from beginning to dividend. Now, if you've joined us for the very first time, a huge welcome. If you're getting up to speed with the basics, you can check out our Get Started Investing podcast. But otherwise, my name is Bryce and as always, I'm joined by my equity buddy, Ren. 

Alec: [00:00:44] How are you? I'm very good, Bryce. Good to be here. This was a red hot interview on a red hot topic in the equity markets community. The price of a house. 

Bryce: [00:00:53] The price of a house. That's it. We were fortunate enough to have at last minute Matt Barrie, founder and CEO of Freelancer Ltd in the studio, ripping through off the back of a a presentation keynote speech at the Sydney Morning Herald, Sydney 2050 Summit. He came in to give us his thoughts on the housing market, why it's so hot and where it's going to go from here. 

Alec: [00:01:19] So Matt Barrie, if people aren't familiar with his writing, he's never been one to shy away from sharing his view on Sydney. He wrote quite a notable piece when the lockout laws first happened in back in, what, like 2014? That did the rounds and this keynote speech. I didn't. I read the whole thing. We'll include the link to it in the show notes. It's incredibly well researched and it's incredibly scathing on Sydney and Australia. So we had to get Matt in to ask him to give us the central thesis. 

Bryce: [00:02:01] It is a fascinating interview. Cannot wait to crack into it, but we are approaching tax time and just a reminder that you don't actually have to sit around and fiddle through all your spreadsheets and figure out when you bought, when you sold, what your capital gains are. There is an easier way, and that is through share side. It's a platform that I use to manage my portfolio and track my performance. There's a link in the show notes share site dot com slash equity mates for you to sign up. Now, if you have less than ten holdings, it's free to sign up. You can plug in all of your holdings and get great performance tracking of your portfolio and tax reporting. If you have over ten holdings, there is an annual premium. The good news is with that link, you'll get four months for free if you sign up to the premium plan. So just jump into the show notes, use our link and be smarter at tax time with our share site. But Ren, without further ado, this is an epic interview, one that we really enjoyed a lot of energy, a lot of insight, well-researched as you said. Let's get stuck in. Well. Matt Barrie, welcome to Equity Mates. 

Matt: [00:03:04] Thanks for having me guys. 

Bryce: [00:03:06] Now we're going to cover two big topics Australian housing and AI. This is going to be an absolutely jam packed episode. Cannot wait to get through this. But Matt, you recently delivered the opening keynote for the Sydney Morning Herald, Sydney 2050 Summit, and the keynote was titled The Great Australian Scream. Now, before we get to the housing points, let's start with how much Sydney and also Australia have really changed over the last 20 years. Can you kind of help us get some context?

Matt: [00:03:37] Well, I'm not sure how old your listeners are, but you know, I'm getting there and in the 2000s, like year 2000, we had the Sydney Olympics and the Sydney was alive. It was electric in the lead up to the Games. Everyone was so excited. We're emerging as an international city. The nightlife was, I think, the best in the world. You go out anywhere, any day of the week, you had things on. It was just so exciting. We won Best City in the World Awards in many different categories and so forth. And just over the last 20 years, we've really stuffed it up in a big way. I mean, that's basically kind of my opening keynote in a way. 

Alec: [00:04:21] You really set the tone. 

Matt: [00:04:23] It's a great city in the world in many regards. What the people about the weather, the beaches, you know, the lifestyle is fantastic, but it feels like you're playing a video game on maximum difficulty sometimes. Yeah, yeah, yeah. You're up to your favourite restaurant. It's closed down forever, right? Yeah. Like, Oh, wow, I want to buy a house. Okay, let's do the math on this. Doesn't really work out or what have you. So it's just, you know, lots of great things going for the city. But we've got a real scenario right now. 

Bryce: [00:04:48] I want to go out, pass one. I am. Can't do it. 

Matt: [00:04:50] Yeah. Why can't I get a meal after 9 p.m.? Yeah, right. It's not hard. Why is my beer now costing $14 down the pub. You know, I was the chef earlier in the week just trying to get a steak for dinner. $70 was the price for a special. Special, special, special. $70. Right. So, you know, I popped this steak at the pub index and it is climbing very rapidly. It's, it's a lot higher than 7% CPI. I think it's running at about 100% a year at the moment. That's ridiculous. Yeah. Yeah. 

Alec: [00:05:20] And you really used that to set up how much Sydney has changed to late into the cost of living crisis but really the housing crisis and you had some fascinating I guess starts and numbers around just how bad it is. Can you talk us through the state of Australia's housing market? 

Matt: [00:05:41] Well, I mean the root of all evil in this country is the astronomical price of housing, and that permeates it. Once you understand that and you understand that, all you know, the ramifications of that in terms of costs and wages and so on, you know, it really is the problem that's the root of all problems. You know, in this country. Socio economists say that if the average or median house divided by the median household income is three times or less, housing is affordable. And that's like our parents used to say back in 1982, I bought a house for three times my income right between three and four times. It's unaffordable. Four and five times it's severely unaffordable. And five times or greater, you know, astronomically unaffordable. Sydney at the moment is 13.3 times. Right. And it's the second most expensive housing market in the world outside of Hong Kong, which is a nice, attractive little island that's extremely dense, very small, next to the most populous nation in the world. So why would Australia, a relative backwater, know 10 to 20 hours by air from really any major action around the world, have the most expensive housing in the world outside of Hong Kong? 

Alec: [00:06:56] Great beaches.

Matt: [00:06:58] Right. Well, there are great pictures of the post-accident. 

Matt: [00:07:05] No. Not exactly. But you've got to you've got to wonder why. Well, you know, it's not because we're making any more babies. So every female on the planet needs to have 2.1 children to maintain the population. Australia is about 1.5, 1.6 and in fact hasn't been above 2.1 since 1975. And wages are not going up at the right that housing is going up. In fact, at the moment, wages are in the greatest decline in real terms, purchasing power terms ever. And in fact, for 20 to 24 year olds in the last year, the real purchasing power of wages went back to 2008. Wow. Now the price of everything else didn't. So what's going on? Like, why does Australia have some of the most expensive housing in the in the world? Sydney is the second most expensive Australia. Pretty much all the major capital city markets, including places like the Gold Coast, Wingecarribee and so forth. They're all in like the top 20 or so in the International Housing Survey by demographic. So why? Why? 

Alec: [00:08:12] Well, why? 

Matt: [00:08:13] Well, the answer is because of the successive Australian governments and this is not just the current government, although the current government is going for dirco. 

Alec: [00:08:22] Yeah, we'll get to.

Matt: [00:08:25] But it's for the last 61 years. Australian house prices have gone up 86 times in 61 years. And the reason why is because politicians have chosen a path of easy, relentless growth. Rather than talking to the engineers, the scientists, the entrepreneurs about what to do to grow the economy and actually build a diversified, strong and complex and sophisticated economy. Instead, they've chosen to go the easy, relentless path of growth, and that is by pumping the housing market to the mother of all bubbles. And when I mean the mother of all bubbles, it is the mother of all bubbles. Right. In 2008 and the global financial crisis in the United States, Australians were already twice as indebted to that housing than the Americans. And the Australian banks were twice as exposed to residential mortgages, mortgages as the US banks, three times the British banks and four times the Hong Kong banks. And Hong Kong has got the most expensive property market in the world. So, so what they've done is just successive policy after policy, after the policy of, well, how do we run the economy? Well, what do we do in the economy? We export. We export dirt dead trees. All right. And now gas from those dead trees and gold. Right. So the dirt being on oil going to China to build apartments in a big construction boom to pump their GDP. In some places, cities that don't get lived in. Right. Coal to China to burn, to make that steel, to build those apartments into Japan in the wake of Fukushima, when they shut down the nuclear reactors. Although those nuclear reactors kept coming back online, all that coal is needed everywhere now. And we've been lucky until recently. And then gold because central banks around the world printing money so that gold every year goes up about 9%. I mean, if you want something to invest in, just buy gold 9% every year, just about every currency in the world, because central banks can't help themselves but to print money, which is effectively another form of taxation and a guess because you need to power your energy. Right. What we have done for this easy, relentless growth is to have one of the world's leading and by flips all of that insane immigration programs. So we bring a lot of people into this country and astral astronomical number of people in this country to the point where now in New South Wales, for example, I think the stats are currently that 33% of people have both their parents born here and nothing, 43% have both parents born overseas. Oh right. It's yeah. And the country, something like 30% of people in the country were born overseas. I think New South Wales it's 35% right. So it's a, it's a, it's a huge program in New South Wales, a population of only 8,730,000 people are brought in, were brought in last year, 730,000 population 8 million, 450,000 moved out because it's too expensive to live here, mostly to Queensland or the country and some overseas and. They're doing that because it keeps house prices up. The more people you've got in a certain area, the more that house prices stay up and go up. And the path of easy, relentless growth that the governments have had is to keep blowing the biggest bubble you can possibly blow. And now we're at the point where it is insane, I think. Was it yesterday in the paper or today? You know, there's a dog box out in Erskineville for $4 million. Yeah. So, I mean, how does that make any sense? At $1.2 million, which was the median household price, you know, a couple of months ago, it's mathematically impossible to pay off the median household income. 

Bryce: [00:12:07] I think the crazy thing with that as well, if we're looking at the same one, only two years ago it was bought for 2 million bucks. So it's up they've made they've cleared over 2 million excluding tax, of course, 2 million bucks in two years in Erskineville.

Matt: [00:12:21] It doesn't make any sense. Mathematically. It doesn't make any sense like I'm sure it was Erskineville or something like a Marrickville or something like that. But what's a good wage? I mean, the median wage is about $94,000 a year. Where you take home is about 5100 a month after tax on a $1.2 million mortgage at the current rate. So I think it's close to 7000. 

Bryce: [00:12:44] Over seven grand.

Matt: [00:12:44] Yeah, Yeah, 7000. And today the RBA was at 230 something rather is making a decision on whether to raise rates again. You know you've got a problem when Suicide Prevention Australia is doing a media event outside the Reserve Bank of Australia about interest rates.

Bryce: [00:13:00] That's crazy.

Matt: [00:13:01] Yeah, that's right because they said today that 40% of Australians in the last 12 months know some of the killed themselves. Right. You know, you've got a problem with the suicide prevention, you know non profit is out the front. The Reserve Bank Doing a media. 

Bryce: [00:13:15] Mm. Without. I want to jump, we'll probably jump into the politics in a moment but Yeah. So I'm going through this process right now and getting more and more turned off as the process continues around buying a house and having these sort of conversations. And it all started for us when we went and I've, we've spoken about this on the show. When you go to the bank themselves and they just look at your income and just times it by five and go, that's what you can borrow. There's no like true, like serviceability on that. Like can you afford it from a cash flow point of view, it's just like an immediate wow whopping he's here's your cash go for it. And so people are just put in these situations where they're overleveraging like crazy because the banks are just I feel like just giving money where money's not necessarily due in a way, if that makes sense. 

Matt: [00:14:01] Like there's so many aspects to that for. The first is just the extreme amount of exposure that the banks have to residential mortgages. So the Commonwealth Bank of Australia, for example, $639 billion of residential mortgages, hundred and 50 billion of business debt and about 17 billion of consumer finance, you would probably be surprised to know the Commonwealth Bank has a bigger market capitalisation than Goldman Sachs, right? It's Australian bank, Goldman Sachs. Something a bit strange about that. Australia is also right about Transparency International is the worst property laundering market in the world. In the world because you can buy a house in Australia and the real estate agents and they were involved in the property transaction, don't KYC, you don't check your ID to find out who's actually purchasing the house or you know, who the ultimate beneficial holder is of a trust and what have you. Right. And then the funny thing about that is with, you know, at the moment, the Chinese have been a little bit in reverse, but they've been a big driver of house prices, obviously coming in, going to university student visas. It's in the buying houses. It's illegal in China to send money more than $50,000 a year. U.S. overseas always has been for a long time. It's also illegal to own property overseas. Oh, yet, strangely, from Auckland to Vancouver, there's a lot of houses being bought, right? So that so that has been a big stimulus of the housing market. The banks of course, themselves on it. We've got a nice little flywheel that's been set up with the banks whereby we've got superannuation and superannuation is one of the one of the things that's really driven GDP per capita wealth in this country around Australia is a relatively wealthy nation, although that's going to rapidly to deteriorate in the current circumstances. But superannuation is being a big driver of that. But the flywheel is the fact that every month I think it's like 11% now the Australian wage bill flows into superannuation, 20 something percent of that goes no, sorry about that, but it's like 16%. I think some like 60% it goes directly into property and then there's 20 something per cent going into equities, of which the big four plus Macquarie Bank at around 22% of the ASX 200. So basically the way the math works out is every month Australian wages 1% go into super and effectively 45% goes into pumping the bank stocks into the bank market. Capitalisations go up, they can lend more money to guess what and the residential mortgages and it's it's extreme and yeah they not they weren't. Checking documentation. There was a big scandal that people were supplying documents that were Photoshopped and, you know, fake degrees. And they said the other. And it was just caution themselves on this. And what they didn't expect was one of the greatest hiking cycles for the Federal Reserve going from basically zero to negative just rates 2 to 5 five. And that caught everyone by surprise. It also caught the Reserve Bank by surprise. They lost $50 billion on their portfolio of half a trillion of Australian government bonds. So the Reserve Bank of Australia was in negative equity and effectively insolvent if was any other business to be insolvent. 

Alec: [00:17:09] That's right. They can just print water. 

Matt: [00:17:10] Well, that's that's exactly their argument, is that even more so. But they're in no position to balancing out at this point. And what I just got just begun. I mean, the you know, the official inflation rate, 7%, but everyone knows it's not 7%, you know, schooner of beer down the pubs now, 13, 14 bucks. In fact, they've got the smart cash register. Now you got to buy a beer, come back 20 minutes later, the price has changed. Yeah, I said, you know, last year the price of a steak down the pub was 38 bucks and it was 48. And then I wrote the article while I wrote I wrote the article. That was the speech that I just gave went to the was $56 for a steak pepper sauce. It was to drop a two bucks to 50 bucks. And I went to the chef this week and those $70 for the special steak, right? Like, like, you know. Yeah. You landlord's checks, the rent 15%.

Alec: [00:17:59] Got Bryce a 25% increase on his rent. 

Matt: [00:18:03] And Energy Australia is up what they said 20 to 25% Australia Post is up 10% like everybody knows. Not 7%. Yeah. Yeah. Right. 

Alec: [00:18:11] It feels like there's sort of two separate conversations going on here and it would be good if you could tie them together. One is the cost of housing and then the second one is like the cost of everything else. And I think in your speech he said that housing is like the original sin or something like that, that it's driving costs across the economy. Yeah. Can you help us understand how the housing cost is driving steaks and everything else? [00:18:32][20.5]

Matt: [00:18:32] Absolutely. Imagine you're in a cab, you're in a cafe, you run a restaurant, right? So first of all, you're paying astronomically high rent in Australia, the average per square metre rent to Sydney City and CBD for effectively a restaurant is around $12,000 per square metre per year in Manhattan. In New York, it's around $10,000 per square metre per year and LA's is even cheaper. So you're paying astronomically high rent and then on top of that you're paying the highest casual wages in the world, which was $21.38, which just went up 5.75% this week or last week to $23.23. So you're paying the highest casual wages in the world, you're paying astronomically high rent and then you've got to try and find a way to sell something like a steak and actually make some money on it. And so you're being squeezed. The cost of everything goes up, the businesses. So and therefore you have an inflated cost of living and then it just cascades through the entire system. And it's because because of land costs. Right.

Alec: [00:19:34] You had this quote that they don't want to write out cause I thought it was so good from your speech. Cafes can't find workers because despite paying the highest casual wages in the world, locals can't make it work with the cost of living. So we import people and treat them for a while to work in a cafe before they realise they can't afford it either. 

Matt: [00:19:50] That's exactly right. I mean, 40% of migrants coming in go work in food, beverage and hospitality and the minimum wage to come into the country. I think so. $53,000 roughly. How do you make that? Yeah, Yeah. We live here, right? How do you make that work and work and work in a cafe? Yeah, right. Like, like, like you can't live anywhere near the place you're supposed to work. I think if you look at the minimum wage, it's a very complicated thing to figure out how much to pay someone to work in a cafe. You've got these levels and grades, you know, level one, two, three, four, five, six. Craig One, two, three, four, five, six. Do you provide? Yeah, you provide services. We provide advanced service, you know, and so forth. There's 122 pay guides that tell us how to pay everyone, including the concrete industry and the Ashfield industry. And the funeral industry has different wages from the cemetery industry and what have you. But yeah, it depend on the time of the day that the person is working, depending on whether it's a public day sorry, a public holiday or whether it's, you know, overtime or this at the other or whether they bring a cheese grater to work or not. It's very, very complicated. So businesses have to pass those costs on. And that's why the cost of living is so high. It's just land costs And money printing during COVID has led to just rampant inflation. 

Alec: [00:21:05] If land costs and housing costs are the root of a lot of these problems, then we ask what's driving that? And it seems like there's probably three key camps that people fall into these days. The first is a housing supply problem. And you know, the AFL, I think last week did housing supply week and you know, Albo has got is $10 billion housing Future Fund and so there's. A lot of people that are camped in the we need to build more. It's a supply problem. Yeah. Then there's a conversation around migration and the migration numbers that are coming to Australia now compared to history, just off the charts. And so there's a conversation around that. The amount of people coming into Australia, the demand side is driving it. Then there's a third camp which you don't hear much about, which is like how we treat housing as an investable asset and the tax treatment of it. And you know, there was that census number, that one in ten houses in the 2021 census were empty. And so does that count? Who's right? Is there a bit of truth in all of them? Is anyone blatantly wrong? How do we sort of know? 

Matt: [00:22:09] There's only one answer, which is migration. That's the only answer. You know, we're bringing in a Canberra sized population every year, and that's quite a large city. Yeah, right, right. On the supply side, we've been gangbusters since the Sydney Olympics in 2000 and building apartment blocks. In fact, it's insane. The rate of building with the fourth highest in the OECD for right of building houses is basically apartments. There's a thing called the Ryder Levitt Bucknall Index, which tracks cranes around the world. And where the cranes are, there's 800 as of the last report, just like a quarter old is 868 cranes in Australia, of which 365 are in Sydney, I think 189 in Melbourne, that's three under 65 in Sydney and there's ten in New York and there's like 14 in Chicago, I think 17 in San Francisco. 

Alec: [00:23:02] So they need to build more. Yeah. 

Matt: [00:23:05] So we have all the cranes in the world here pretty much, I mean outside of China. And the other thing is that we haven't been able to increase the number of construction workers and tradies for decades has barely budged. And New South Wales numbers about 300,000. I mean, every time the cost of living goes up, the tradies flee to Queensland and they're fleeing twice as fast now because the Brisbane Olympics are coming and get paid better rights to go work on that because it's a government project. So the cost cost goes up, the tradies flee to the country or they flee to Queensland or somewhere overseas or what have you, Thailand to live, I don't know anywhere cheaper. Right. So, so we're not able to build any more houses. We've, we've been at flat shed extreme levels for decades and in fact now construction firms are going insolvent. So we had 1700 insolvencies in the last 12 months in construction, our second highest rate of insolvencies outside of food and beverage. And get this cafes to work. You know, someone comes along, does a construction project, sells the properties off. The plan, gets locked into a fixed cost structure because they've sold the property off the plan and then inflation, you know, materials and wages just keep going up and they go bust. It's simple as that. So it's not possible to build any higher than we're building now. And in fact, the number of housing starts is dropping like a rock because the banks won't lend anymore. The banks want to see anecdotally a 17 to 32% return on investment. They're up to the gills in residential mortgages so that the lending has tightened up and the developers can't get any more tradies in in the country and and costs are too high. So that's a it's end right in terms of the ability to, to do anything there. And now interest rates are might go up again today. But the 3.85 let me tell you New Zealand's 5.5 UK is 4.5, Canada's 4.5. They're going up. Yeah. 

Bryce: [00:25:01] the major banks came out yesterday and said they expect them to hit 4.6. 

Matt: [00:25:05] Well, they're playing a game so all the banks are playing a game because they don't want to spook anyone. Right. And so the game is Well, no, I think we'll kind of will peak here. Everything will be fine. And again, oh, just before the great interest rate decision, they will come out, guys, they came out and said, no, it's going to go up this time 25 basis points or whatever, but the next one's going to be all maybe three months away or something. That and then, you know, with a pause for a bit and so forth. And then, of course, as the time comes up, oh no, they got a rise. Right. And they'll just drip feed the pain in there. Like I say, well it could go to seven or more. I mean in 82 it was six and a half or 17, but in 1982 it took only 44% of household income to service the mortgage because house prices were a lot lower. Now it now takes in Sydney 62% of household income to service the mortgage. Probably after today I'll take 68% rather I like. Yeah, in New South Wales 70% of people are in rental stress, which means their outflows are greater than their inflows. 86% of young families, 86% are in stress. You know, no wonder locals are having more kids. It's too expensive. And then the flipside is 69% of new immigrants are also in rental stress because they don't know how expensive it is they're told to. Bring in $60,000 Australian to survive. On if they're a student, for example, that apparently is not going to enforce anymore. The poll is the third biggest demographic and the GDP per capita, there's 1200 dollars. So I don't know that expect $60,000. But you're hearing these stories about international students coming in, of which we've got 620,000 of them. And in Melbourne, a survey just came out where 180,000 international students, Melbourne, 90,000, are in food stress. They don't have enough to eat. And there's growing demand for food banks and for free food and so forth. Yeah, we're creating a real problem. And and why is government doing this? Because they're stuck between slow and Charybdis like they're at the point now where they've pushed this Ponzi and it is a Ponzi scheme. It's a Ponzi scheme because you need house prices to keep going up. You're going to find more suckers to buy house prices, even higher prices, houses, even haven high prices. And you guys keep bringing more and more and more people in because the thing has gone so mathematically insane that it's impossible for the average person to buy the average house. 

Bryce: [00:27:33] All right, Matt, we're going to take a very quick break and we'll be right back. Well, welcome back to equity mates. We are here with Matt Barrie, CEO and founder of Freelancer Limited. Outside of policy, around immigration, though, there's other government policies, particularly here in New South Wales, around, you know, scrapping stamp duty or at a certain price. And then there's the first home buyers grant like plenty of policies to give people more ability to spend more on housing, I guess. So what's your thoughts just broadly about housing policy? 

Matt: [00:28:07] Well, in terms if the government ever wants to restructure a tax, I guarantee you they're not gonna make less money. Yeah, it's all there's always an outcome here. If you look at the New South Wales budget, the plan to make more money off the property tax and stamp duty now is yeah, in theory, property tax is better than than stamp duty because stamp duty is basically illiquidity. Yeah, you got to pay a huge amount of money. You just pay the stamp duty and the government love stamping things. I mean, what are they doing in return for that stamp? Nothing is a document stamp. Do you pay us some stupid number I like? It's. It's a joke, right? It's an archaic way just to basically extract money from people. But yeah, it does lead to illiquidity issues. But then likewise, how they want to create this sort of two tier property tax thing is also going to create liquidity because some houses will be on the new regime, some will be on the old regime where you don't pay a property tax and who wants to buy a house and continue to pay property tax. So you can buy a house that doesn't have ongoing property tax in a way. So the government part, the government's policy is basically just keep house prices up and keep them growing or we've got a banking crisis. And the thing where it now is, if you have watched the movie The Big Short with Steve Carell in it, you should you should be watching the movie. It's a great movie. We are. Exactly. There are so many echoes of exactly where America was in 2007 2008 with the global financial crisis that is now, is it? I mean, there's a famous scene in the movie where Steve Carell's in a strip club in the strip is they're dancing around saying she's got five houses in a condo. And she was on what they called in America adjustable rate mortgages. These are fixed rate mortgages that lasted two or three years on low teaser rates to get you in that these they call them exploding arms. After two or three years, the interest rate went up higher and they doubled or tripled. And that was basically the global financial crisis in the US because all this lending went crazy to the point where now, as you say, you go to the bank and they don't check your documents. They don't check to see that you've got an income or assets or job, right like that. And in America, they call them ninja loans. No income, no job, no assets. You could go just borrow money and buy a house is a bit bit different over there in the U.S. in many circumstances. You can just hand back the keys if you can't pay the interest bill. But know basically everyone was going crazy on houses and all the lending was to increasingly lower and lower quality borrowers who were unable to pay back these loans. And then and then the mortgages reset and they doubled or tripled. And guess what's happening right now? So there's a lot of people were on 1.95% mortgages during COVID here in Australia. And then that being reset and what's a mortgage now? 

Bryce: [00:30:46] Currently five and a half.

Matt: [00:30:48] Private hire as a wishful thinking. Look this time I mean like I you go on Twitter and you see I mean, it's Australia's it's very hard to figure out what the price of anything to do with housing costs. It's the only place in the world where you need voodoo to figure out what how much a house costs. Right. Everywhere else you go, get here's a bunch of houses for sale. He's their price. Yeah. In Australia, the average house price is contact agent. Yeah. Yeah. 

Alec: [00:31:14] Well, Bryce has been lamenting that every place that does have a price listed or a price range listed just gets blown its. 

Bryce: [00:31:20] Plus 20% to start before you even speak to anyone plus 20%. 

Matt: [00:31:24] Well, yeah, I mean, I don't think I mean, there's this whole thing about I'm quoting what? I don't really think the agents in many ways to blame must. These agents don't have a brain to be that conniving. Right. Like you demand there was a there's a point in time, actually, where I actually looked a bunch of different houses and I'd go in and I'd write to fill in a spreadsheet. I go, How many bedrooms, bathrooms, whatever. What price do they tell me it will sell for? And then down the track I would fill up and say, What price did it sell for? Now, in New South Wales, they're actually not required to publish the price or tell you who owns the property. You're I think that's why Transparency National says it's such a bad market for money laundering. But but you know in some circumstances you can get the price what have you. And let me tell you, I looked at 50 homes and I looked at the price the agent told me the price itself for. And guess what the deviation was between the two of them.

Alec: [00:32:09] You're closer to the 25%. 

Matt: [00:32:12] 0.56%. They'll spot on every time. Oh, really? I just couldn't believe it. So this guy's not savants? Yeah. How is this happening? And I think what was happening is I think the software they use to manage the whole process just tells them the number and it just ends up being that number, right? It's kind of like they maybe be bit tail wagging the dog. Yeah, a little bit. But whatever software system they're using, this tells them this will be the price and that ends up just being the price for whatever reason. I just seem to. Weird to me that it was so accurate. But of course, that's the subway systems constantly adjusting the prices, and they're constantly changing, probably based on a bunch of different factors. But but yeah, we're just at the point now where the maths doesn't work. So just like in the U.S. where, you know, your mortgage went up, doubled or tripled, you know, I think the writes I saw on Twitter just recently. Yeah, you got some sixes and then you got some sevens in there. I think I saw a couple of eights on the second set of circumstances. And I think there's some tricks with bank accounts in Australia now and mortgages now, like anywhere else in the world, you can pretty much get a bank account and it just pays you interest. In Australia, the Commonwealth Bank pays 0% interest, 0.00 and then you have to have like this online saver account and you got to play this, like play this stupid game of like shuffling money around to actually get the interest. And then yeah, you got, you got to put your wage in there and it's gotta be paying it every month and you can have 70 withdrawals per month and you gotta pay the ATM. It's a joke right. Yeah. You have it, you have a bank account in the US and it just pays you interest, right? Yeah. Yeah, that's it. Right. And it's the same with mortgages. Right. So you see these teaser mortgages, what have you, and then you read the fine print and you've got to, you've got to like have your savings account with them. And this at the other end, it's always, always. Yeah. So when you actually get down, if you don't want any of that, you want to figure out actually how much is just a mortgage. Right. If I don't want to move my banking to you and you know, sort of a your first born son and you know. 

Bryce: [00:34:03] The other is not the headline. 

Matt: [00:34:04] It's not. Yeah. And and, you know, I think it's it looks like it's, you know, 7/8 and who knows where it will be after today. Right. 

Alec: [00:34:11] I want to get to how this ends because the death of the Australian property market has been called before. Yeah, I remember John Hempton in like the mid 20 tens did that tour of western Sydney and yeah, you know, they pretended to be a couple and they would go and they called 

Matt: [00:34:26] Job to Jonathan Tepper Yeah.

Alec: [00:34:27] That's right, Yeah. .

Matt: [00:34:29] Great Perception. 

Alec: [00:34:29] You had an article. Oh yeah. Pulling a bubble. 

Matt: [00:34:32] In San Antonio. 

Alec: [00:34:32] And we've got a, we've got a good mate Joe Walker, who I think you might know, but he's been calling Bubbles for years and you probably none of you are wrong. It's just that the property market keeps boiling on. So how does this end?

Matt: [00:34:47] Well, I mean, the lesson I mean, it's a great time. Back then 2017, I wrote Australia's Economy as a House of Cards, and yet I know John Hempton quite well. I mean his brothers and yeah, he was, he was running around with Jonathan Tepper, who has studied bubbles around the world from the tulip bubble in Holland and was a 1400s Australia. And he said Australia is the only housing market I know where they auctioned off middle class houses like fine paintings, you know, like, like it's like to an American. It's a bizarre thing where people top to an auction. What is this? Never gets excited now. Congratulations. You've been paid more than the other guy, right? Like, it's insane. And at the time I pointed out how insane it was and the numbers just weren't working. But, you know, continued government intervention, you can kick the can down the road a long time. It turns out a very long time, far longer than you might think. And they've done that with a variety of policies that historically low rates. I mean, the COVID is unpredictable and immigration and this that the other. But the answer to all of this if you wait is end up is maths, right? Yeah. Maths eventually comes in and maths doesn't work anymore. And I saw this week talking about transportation costs is not a can't remember which newspaper I was in. It said you know, tolls going up and you got petrol and you've got this at the other and it's a the average cost of transportation in the average household budget now is 15%. Okay. Well if that's 15% and it's 62% to service the mortgage right then how much is it left is left to eat right or do other stuff pay for school fees, you know, health care and just all the normal stuff people and you eventually run out of money, right? And you can pump new people into the economy as much as you want from overseas. But, you know, I just don't think that the maths works out anymore. Right. Because we're not bringing in. Yeah, there are a lot of millionaires are to move to Australia, but I just don't think the maths works. And so people can take the pain for a little while and then eventually things break. And I think the big the thing I see, it's amazing you get to look at the GFC with the adjustable rate mortgages tripling and so forth. You look at what's happened with our fixed rate. So this is $350 billion this year, a fixed rate mortgages reset this quarter, this quarter. This is the June quarter. I think it's like 17% of all fixed rate of the 350 billion resets this quarter, 15% next quarter, and they're not resetting ten, 20%, they're resetting, you know, 200, 300% plus. So then you look at in America what's happened recently in the banking sector with silicon. Bank. So I went I was actually over in Canada at my my office in Vancouver just to try to take a couple days off in between to go skiing, of course. Every time I tried to take some time off, something blows up around the world. And what blew up that day was Silicon Valley Bank. Now, Silicon Valley Bank is one of the largest banks in America. It banks 50% of the tech sector in America. And business was great. So deposits like tripled in like three or four years, right? It's like $180 billion with deposits from 60 something like that. What had happened? What causes the banking crisis in this bank where business was going really, really well because you had this big boom in tech, You know, people are rising, you know, start-ups are raising more and more money out. This whole unicorn phenomena. You know, people in that talk about I raised a seed round of $50 million seed that's like series AOB, that's series Z, like the seed round of 50 million us. Get used to flexing now this is my seed round dollars 50 mil. I know. Lazy 50 bar on the couch. Right. So they're raising tons and tons of money. And then Silicon Valley Bank had all these deposits and was try to figure out what to do with it. Right. It kind of ran out of things to lend money to. You know, there's only so much money you can lend to Start-ups, especially cash building Start-ups. So what did it do with the money? It bought mortgage backed securities, so it bought 80, 81, $82 billion US of mortgage backed securities and some T-bills and an average yield of 1.56%. Now, when the Fed hiked rates to five from basically zero, why would you want to hold a 1.56%, ten year mortgage backed security? When you can get at call, you can go to a US bank in three but get 3% deposit account. Yeah. Unlike the Australian banks which pay you 0.00. Right. And you get to do this shuffling around and that account to move your money or you about to extract some of a yield out of the account. Right. It's a joke. What happened was in May of last year, you had a bit of a tech wreck, right? So it started with the crypto crash. I was an adjunct professor of cryptography for 14 years. You know, this is Sydney and this whole crypto space has been just fraud all way through, right? I mean, Bitcoin is a fantastic invention for sending money overseas without government intervention, but it's it's never been a store of wealth and all this hot money is flowing into it to try and figure out how to shuffle money around the world, whether it's hot or extremely hot money. And in fact, at 1.90, 98% of volume in the in Bitcoin was money going out of China. So that's where it went after the casinos stopped working. It used to go to Macao, get your money out China through Macao. Then was the Australian casinos and the British Columbia casinos. When that stopped working, it went to Bitcoin and then trying to crack down on it. Right? And then they try smurfing, smurfing things where they would send money 50,000 all the time and the $50,000 just under the limit to banks in Hong Kong. Right. And try and extract or allow it to go buy an apartment in Sydney or have, you know, Melbourne. So it's exactly like this life is exactly like this. So you look at Silicon Valley Bank, right? So they put all of money into mortgages and then crypto crash happened because surprise, it was just all, you know, every scam you had before the markets got regulated, you know, over the over the last 100 years came back and got reinvented, you know, painting the type, you know, walking up the prices of things like the NFT market, you know, monkey JPEGs, whoever thought that was a good investment. Like seriously. But everyone lost their minds, right? Because what was happening was a few people were painting the type I sell to you. You pass it, you pass it to you, you pass around the circle, just walking the price up and eventually some stupid NBA basketball local Paris Hilton comes along and buys the monkey jpeg and hey, hey, hey, I've got a receipt. Look, I've sold it. Yeah, that's how I got my money out from my drug cartel and, you know, Columbia or whatever, right? Or Bondi Beach. Yeah. So? So if you look at look at Silicon Valley Bank, the crypto crash happened, Tech crash followed that. VCs withdrew funding massively. That led to a big cratering in technology stock prices. And then the you know, start-ups are cash burning, right? Because they're not profitable yet. Otherwise they go public or what have you. So the bank balance at Silicon Valley Bank were being drawn down further and further and further and further was a bit deeper and a bit longer than Silicon Valley Bank expected. And they put a bit too much money in these ten year mortgages. Now, if you if the starts wanted to wait ten years, they'll get their money back. But in the short term that a bit of a duration mismatch they had to kind of sell these mortgage backed securities to get that starts withdraw cash. And it's kind of funny actually, they got to a point where they like we have to kind of sell or I'm available to sell securities. So they they dumped that security book and they lost $22 billion. And yeah, there was a lot of commentary in the leading up to that. Said, Gee, this looks a bit risky. Silicon Valley Bank could be in trouble. And remember, I'm in a group with all the top tech CEOs in the country. And I was like, guys, there's no I mean, guys, like, there's no way they're going to let Silicon Valley Bank fail. But this is such a systemically important bank. There's just no way. I mean, just mark my words, I'm skiing today and finally taking the day off like like the bases will come out today and they'll all say, you know, we stand behind Silicon Valley Bank, you know, there's money available, etc. and so forth. You know, we unite. It's so important. Why have you. 10 minutes later Peter, till get out there then. Yeah. Then some of my mates forwarded an email from Union Square Ventures. Get out the Founders Fund. Get out! And that's like. And it's just Justin and his. It is great To get out, right? I think that goes musk. Yeah. There's this like, yeah, I just was just insane. And of course that led to a solvency crisis and, and then effectively the Fed had to step in and go, well, we're going to guarantee not just the 250 grand, but get guaranteed all deposits. Right? And of course, was Silicon Valley Bank. It's quite pronounced because the deposit were large, because bank start ups held $50 million deposits. Now, you look at Australia, so you look at the Commonwealth Bank, right. And this is bigger than Goldman Sachs. And you know, the financial results look pretty good, right? And the Australian banks are essentially better run than other banks around the world. Right? So it all looks hunky dory. It looks great. Right? But if you look at one side of their book, which is their assets, right, it's all $689 billion worth of residential mortgages and one fifth of business loans. And business is not doing so well. So the business deposits have been dropping. Right. And very little in terms of consumer lending. That's like 17 billion. And then you look at deposits and deposits have been doing pretty well. Why? Because we're bringing in a Canberra saw as a population of people every year that need a bank account. And where do you go? You go the Commonwealth Bank and ANZ and so forth opened a bank account. So that's capitalised in the banks and the banks are a much better place than they were in the GFC. In the GFC they were insolvent, they were totally reliant on overseas funding, U.S. funding and then when that freeze stop, they were basically insolvent and the Australian government would come in and lend the triple-A credit rating in order to guarantee the borrowing. And that on froze it. So they've got, you know, they've got, they've got now got having a 75% of them mortgage book or loan book is covered by deposits, so they're definitely better capitalised than the GFC. However look at Silicon Valley Bank, look at the Australian situation in the GFC and also the GFC and the GFC. You had the problem with default correlation. We always had a recession and in Australia the two tens curve is just your curve is just inverted, which is a signal for recession. And in a recession, people stop spending, you know, people lose their jobs and you have loans defaulted on. You know, Australia is at the point now where people can't afford their mortgages, they can't afford to rent. You know, they're all in rental stress, 70% cent as well as you know, citizens are the rent are in rental stress. Interest rates are getting to a point where the math doesn't work out anymore. So could you have a mass default correlation event even though the bank's been done, done pretty well and you know, by global standards, great. And micro-cap bigger than Goldman Sachs, could everyone suddenly at the same time in a correlated fashion, not be able to pay their mortgages at the same time? If times are bad, could the cash deposits get drawn down just like a Silicon Valley bank? I think it's plausible. 

Bryce: [00:46:07] If that's the thesis, and you can definitely see it, I guess. Do you have like a time frame on how I mean, we were talking about in 2007 and it's just one of those things. It's like you've got the you know, people talk about this mortgage cliff and it's coming it's going to affect people. I mean, I think the grand scheme of things you said it's what, 17% of all mortgages are going to have this cliff. Like it's 60% of Australians are going to experience this. So how do you how do you well, one time frame on. 

Matt: [00:46:40] One third of Australians are not affected because they own their own home or one third of a mortgage and one third rent. Look, I think the thing about now that just when I watched that movie Big Short, again, it just resonates is is the rapid reset of of those exploding mortgages. Right. And right now we've got a rapid reset and it's not a 10% increase, 20% increase. It's 200, 300% plus the reset of your mortgage. And people like to feel wealthy when they borrow money. They think, oh, wow, you know, you got read the you know, Herald or, you know, Telegraph and it's, you know, unemployed train driver earning less than McDonald's workers now has a property portfolio of $40 million worth of houses. Right? Like, yeah, yeah. Like people love to borrow to the gills and make them feel wealthier. They own property. Will they die in the bank owns it and mal changing interest rate and you've gone. Right? Yes. There was extreme leverage in 2017 when I wrote the article, but now you've got a rapid reset of a major cost and you've got inflation at a rate that it wasn't before. I mean, things just got bad. Things got more and more expected. Friends would just come visit from overseas, come to a strategy that lots of things are expensive for. This is kind of ridiculous. Whatever. But. But now it's the point where it's just insane. I was 70 bucks from the state in the public eye. I have to be taking the of. So what's next is like the

Alec: [00:48:07] To answer your question Bryce the when it gets to 100 bucks to Yeah. 

Bryce: [00:48:11] So asking for a friend then if they're looking for a house what would one be doing. Is it a just a sit and wait like. 

Matt: [00:48:20] Well I see, I see, I see. It's just a crazy market in terms of housing because first of all, there's very little transparency in what really is going on. So on one hand, you'll hear a narrative that, oh, yes, some house prices are falling 20% from the peaks and below. On the other hand, you see these ridiculous prices and it's just very hard to get a picture of actually what really is going on. I mean, Aria is about 74% of News Corp's market cap demands about 34% of Fairfax's market cap, at least when I checked it last. Right. So. So it's not in the best interest of the media to tell you how the markets stuffed. Right. It's just a very hard thing to get a get a proper picture of of what's of of what's going on and I just the maths now if you add it up right, you add up what percentage the average mortgage and what percentage of household income goes into that and what goes into transportation and energy Australia. Right. Prices by 20 to 25% and you know ideally costs up like it. Where's the money going to come from? It's a drawdown savings and they've been unlocking a super drink cupboard. You can unlock super. And one of the reasons you could unlock super was to pay off your home loan if you're at risk of losing your home. Now I want to go to one side. The libertarian in me might say, Well, it's your money. So you do. What do you want to do with it? Right. On the other hand, well, maybe stupid thing to do. And I think another telltale sign is you go look and you go look online Now an aria or what have you for a to rent. And I was pretty relaxed. I do a browse through and you look through Paddington and it's like 8000 a week, 9000 a week, 10,000 a week, 12,000. But I've got What the hell? These are not amazing houses. These are just your average what Whatever, a house. But I think the telltale sign is you look at them and half of them are fully furnished. And they're not furnished as in for rental. These are premium furnishings. So obviously someone's moved out in a hurry because they can't pay their mortgage anymore. And like, can someone else pay this and that? The maths works out that there's that how much they to pay and not going to pay that. No, no it's it's it's so so I think you could have default correlation you could have the same a Silicon Valley bank you could have cash balances being drawn down. You could have people will not be able to pay their mortgages all at the same time. And you've got massive reset of rights and at the same time is pretty much out of control inflation. And if the RBA is not game enough to temper the inflation and typically if you want to stop inflation, the policy rate needs to be above inflation, right? Typically, typically I think called the Taylor rule, which you can do, you know, some people look at. But you know intuitively if inflation running at 7%, why would you keep your money in a bank account at 4%? Because you just might spend it. Yeah, maybe buy a house or what have you to try because you know you're going to build some wealth. And that's been 61 years. It's been a phenomenal trade to buy a house and own a house in Australia. Right. But if inflation's at seven, what right do you need the bank paying interest on your savings account to kind of pull that back? Yes. You can make mortgages completely unaffordable and tighten lending practices which are going to happen, which is happening right now. But but you also need to attract people to put money into bank account. And it's kind of weird when the major banks are pay you zero, they let you pay zero unless you open a second account and you're shuffled around and there's a you know, Australia had this this is not the first time it happened. Australia in the 1800s we think was 1851, We discovered gold in Ballarat. You know, a huge number of migrants come to Australia to, to seek their fortune with, with gold, gold mining and so forth. And we had a big property boom as a result because a lot of people and limited supply of houses and you know, massive property boom and it was in Sydney, Melbourne, it was exactly the same, right. Like house prices just went through the roof, land prices went through the roof and they had a banking crisis and in 1890 you had some contagion with the banks and they all had to kind of shut for a little period of time and so forth. And it took 70 years if you bought at their peak to make your money back on the house, 70. 

Alec: [00:52:23] That's the rest of our life if we're lucky. Yeah. So we're going to include Nasdaq. We're going well, I think that's it's worth like people will be listening to this and getting scared. You know, like if you're in Australia, you're. Job and your salary is tied likely to the Australian company or the Australian subsidiary you work for. If you want to buy a house, it's in Australia. But the stock market gives you an opportunity to buy overseas markets in overseas currencies and that's an important thing to remember. Or you can just go and buy gold. Yes, we want to. So we'll include the full transcript to your speech in the show notes if people want to read it. And I would recommend reading it because it's a good read, very well researched and quite funny as well in the audience when you gave this speech with some heavy hitters for New South Wales, I believe the Premier Chris Minns was there or he was the face. 

Matt: [00:53:15] Facebook after me. Actually, he wasn't there when I was speaking. I spoke for you, but I got a full brief.

Alec: [00:53:19] I'm sorry. 

Matt: [00:53:20] Did I say a funny story about that?

Alec: [00:53:21] Yeah. What was the reaction? 

Matt: [00:53:22] Yeah, well, I'll tell you a funny story. So I was actually asked to give this speech last year at the same conference last year. So it was originally scheduled to be held much, much earlier on. I was I was kind of surprised and interested that they wanted me to be the opening keynote before the premier and before the ministers and all, you know, the commissioner. I thought the Opera House, Australia see what I thought was kind of interesting, I guess. Yeah, I suppose the conference organising how well I've seen you do keynotes at other conferences and you certainly make the converse more exciting. So, so people talk about, you know, this debate and. 

Alec: [00:54:01] This way we would have had no idea. The estimates put this conference on if it wasn't for your speech. 

Matt: [00:54:05] Well, I do six too, so I tell you, I say, what happened? So, so they asked me to be the opening keynote and actually thought about it. Actually, I actually talk about my article. I thought so in the transcript I said, you know, I thought, you know, why should I? Why should I do this opening keynote? What? Like what? Why? Why me? Like, why am I relevant to this? Right? I mean, I just got I did write a few pieces on other issues. 

Alec: [00:54:27] Yeah. On the lockout. Yeah. Yeah. I think people will be. 

Matt: [00:54:30] You know, I wrote yeah, I wrote a piece called With Last Person in Sydney, placed in the Lights out in 2016. Now I was again skiing in Canada when that happened and I could not. I was just thinking, how should I write this All shine. All right, This is all about the lockout laws and what actually was really going on, because back then everyone thought Australians, it's because we've kind of drunk our alcohol and it's because we're violent. And that's why toxic masculinity is like the whole show has nothing to do with that. It's it's again about property, It's about it's about the $20 billion I think at the time property portfolio in Woolloomooloo, which is a housing commission which you could which is the most amazing location for property, but you can't clear that out and build apartment blocks while you've got Kings Cross there. So let's build a new zone in Barangaroo. We'll do that at 24 seven, we'll move the nightlife there, we'll make up some fake health and safety crisis fund, a few non-profit groups to go a bit crazy or whatever, and we'll get the media to chime in so they can pretend like the relevant and and what we'll do is we'll just move borders rezoning this area will make less money on apartment blocks and and then subsequent taxes and we'll move and it'll be a nice nightlife anyway. Of course, that was the plan. It didn't work like that. And I'll say kind of slightly right, something to kind of explain what's going on, because today in the media, it's all 500 word articles because they're driving the Google ad click machine. So, yes, any time you have a headline, you know, I stumble across a blind dog and you wouldn't guess what happened next. And you click on the headline and bang, we get some ad revenue, right? So I was in Canada skiing and I was all right. So not so every day after I'd ski out in the Jacuzzi for now and ride a little bit and do it again and again. And then I got to the end of it. I said to my publishers, not because I had to it. And by the way, he's a list of ministers you just send it to. I've got I used to he's in the Liberal Party is like he's a list of Liberal Party ministers and so forth. And I said, you know, I guess you have your crazy people, your mum, all the time to worry about it. So then I, and I remind all the ministers, both sides and so forth, they write a welcome next day and on LinkedIn I was an influencer, one of the 100 influencers globally and they got 1 million trades in two days. And then on the Wednesday afternoon, 16,000 people marched. Yeah, Yes, that was a bit crazy. Anyway, so I thought, why? Why would I be relevant to this? I don't know, like I was trying to go get a meal and I went down Victoria Street. We used to have all these cafes and restaurants down Victoria Street. I thought, I'll get a meal and it's about 9:00. And I went to Tropicana. I thought, Can I get something cheap and cheerful? Sorry. Kitchen closed or down the street? Kitchen closed. You know, room is closed. It was close. I thought, Oh, I guess it's Betty's burgers and some of the poo on sticks and a Betty's burger. And I go, okay, can I please. Sorry. Kitchen closed like 9:11 p.m.. And so and I thought I was so frustrated. I thought this city was very difficult. Like like I swear as 10:00 that the restaurants used to close. Now it's 9:00, right? This is ridiculous. So I tweeted, Was it take to get a meal in Sydney after nine anymore? And the answers were. Hilarious. It was like an alarm clock. So you wake up early or a taxi or a kebab or maccas or a sledgehammer. And the best was a time machine. Back 15 or 20 years, I thought, you know, maybe I should do that, you know, so but I so I said, I'll do it. But then I think parrot, I found out about it. Now, I didn't mind potato. I thought, you know, I actually thought, you know, it's kind of a weird guy because he's very, very, very, very religious. Then at the same time, he's a libertarian, right? So he's the guy who came in and said, okay, well, we'll just get rid of the VAX passports and also stuff and open things up. So I thought it was actually pretty good. But apparently he said after speaking, we'll have to wait till after the election. And then he didn't get in and then Christmas cut it. So. So in the coffin? Yes. Anyway, so I was there, I was at the conference and I came in. I guess we have to talk. And of course, went off the reservation, basically. And there's a video of it actually is a recording. And surprising enough, Fairfax was not recording the conference, which is strange for running, but I think it was originally important conference. So my comms guy just flicked his iPhone on the table and just recorded it. It was quite funny because at one third the audience was just in hysterics the entire time. One third was like, Should I? Awful not laugh. I feel very because there is a $13 a ticket. So it is all consultants to the government and so the other and they weren't quite sure what to do. But you see that smirking and looking ahead furiously and then you had one third in sheer terror, like what is going on? You're not supposed to say this. And I was trying to get a reading for what Bevan and Michael, a journalist, were thinking. I think it was very clear after that that that was not writing about this conference at all. So they wrote those two articles that came back entirely from the entire conference. One was that Chris Crispin said we should build more apartments going up, and that's how we'll get the housing supply going. And then another article was on Australia. Sydney is overlooked for food. 

Alec: [00:59:31] Is overlooked. 

Matt: [00:59:32] Yeah, because food's great and it's, it's a great overlook for food. If it's 70 bucks a steak. 

Alec: [00:59:38] Yeah, yeah, yeah. Food is great, it's just expensive and obviously not open enough. 

Matt: [00:59:42] Yeah, correct. 

Bryce: [00:59:44] Geez, Well, Matt, unfortunately we have run out of time, but it's been an enthralling conversation. We've certainly oh, I've certainly really enjoyed it and I know that a lot of our community will, will have taken a lot out of it. You've left us with a lot to think about, including me, because I'm sitting here in the midst of all of this just feeling like what is going on. It's just so hard, as you said, to get a read on the market and how things are actually panning out. But we do have one final question. Every expert that comes on the show is automatically entered into our expert of the year, and it's an opportunity for our community to just celebrate those that come on to the show and help them in some way, shape or form with their investing and money journey and to help them vote at the end of the year. For the expert, if you can let us know where you would put the nice gold trophy or glass trophy. It's not exactly that one, but it looks something similar. Where would you put it if you were to win it?

Matt: [01:00:38] Where would I put it? I feel it is us.

Alec: [01:00:48] If you don't win.

Bryce: [01:00:50] Or you don't win, then okay. And I guess I'm glad we asked that question. Oh, much appreciated, Matt. Thank you so much for taking the time. Very much looking forward to having you back on at some stage and getting a bit of an update on how you think about things. 

Matt: [01:01:07] Appreciate it. Thank you.

Alec: [01:01:08] Thanks, Matt.