Operation Claw, the Thirty Per Cent and a Trip to Bali

Episode 15 · 21 Aug 2026 · 1h 33m

This week on Before the Weekend, Kasey McDonald and Peter Schravemade work through the week the buyer's agent industry stopped being a story about one bad operator. First, AUSTRAC. Operation Claw pooled data from ten major Australian banks and found potentially hundreds of millions of dollars in suspected fraudulent home loans - inflated incomes, misrepresented employment, offshore and third-party funds at settlement, most of it linked to Sydney property. Peter has been one of the loudest critics of how many AML checkpoints Tranche 2 forces on a single transaction, and says this is the answer to the question he put to AUSTRAC's CEO on stage last year. He's still not happy about how it was implemented. Then the number every property manager will be asked about for the next twelve months. Ray White modelling puts the break-even gross yield for a leveraged investor at 5.15 per cent. Capital city yields are sitting at 3.95. Something has to close that gap, and rents can't. Peter puts his own money where his mouth is and explains why he just locked his tenants onto two-year leases - and why he thinks making that compulsory, as the ACTU proposed on Tuesday, would be the fastest way to make the problem worse. Josh Deckart of Zapiio joins to give the state of the buyer's agent market from the inside: the SMSF wave that ran to the deadline and then stopped dead, why he could name fifty small operators who have already left, and the argument nobody else is making - that the budget put jet fuel on the commercial market, where leases are CPI-linked and every increase gets passed to a small business tenant. Two hours after that interview was recorded, Atlas Property Group announced it was entering voluntary liquidation. Then the interview that changes the mood. Peter Diamantidis of Ray White United Group has spent three years building a recognition program that rewards property managers exactly like sales stars - overseas trips, partners included, gated on hard metrics his teams don't get to negotiate. He set a target of 500 new organic managements. They brought in eleven hundred. Three property managers have left in three years. His answer to principals who think it's too expensive: "Just pay two recruiter fees, there's your trip." Also this week: Real acquires REMAX, McGrath partners with 172-year-old Hodges, the REIV takes on the Victorian government over auction reserve disclosure, and the last regional markets standing.

Full transcript

Peter Schravemade (00:05)

Good morning folks. Welcome to Before the Weekend. It is Friday, the twenty first of August, and this is episode fifteen. Unbelievable. Big thank you. Just before we begin to all of the listeners that make this happen. I really appreciate your messages of support through the weeks and a lot of the story suggestions and interview suggestions that have been sent through. Greatly appreciated. If you're just joining and this is your first time, you can find us at any of the majors to log in and listen to podcasts, including Amazon. Spotify, Apple, iTunes, and of course beforeTheWeekend.com. And if you've got any questions or you have any suggestions for us, you can hit us at hello at beforeTheWeekend.com. Now we've got a packed program for you. We're talking about the ACTU housing plan. We've got a fair bit of information on buyers into buyers' agencies, including an interview with Josh Deckart from Zapiio. We're talking about AUSTRAC's Operation Claw, which sounds like something from Inspector Gadget. The thirty per cent rent number. Two follow-ups from episode fourteen. We've got some numbers from Cotality if we get to them. And a couple of we've got a story bank of six items, just depending on how much Kasey and I bang on. Now I am joined by my wingwoman, my sister from another mister Which is Kasey McDonald. Kasey, thank you for joining this morning. How has your week been? Yeah, look, pretty amazing. What a busy, busy week again it's been. Been on the road.

Kasey McDonald (01:24)

Yeah, look, pretty amazing. What a busy, busy week again it's been. Being on the road, you know what exactly that's like. I feel like I'm living out of a suitcase at the moment, but really enjoying it, you know, just being back, hearing exactly what is going on in the

Peter Schravemade (01:30)

Ground, in our offices day to day. So yeah. It does give you a broad perspective, the travel, you know, like and it seems glamorous. I know a lot of people follow me on social media and they're like, Your life is so glamorous. It is not. After a while one hotel room's look the same as the other. No. But I'm with you that sometimes you don't get to eat and so you have cheese and crackers on the plane. Like so people might think that's amazing, but anyone's like, yeah, no. Yeah, maybe that works

Kasey McDonald (01:58)

Yeah. It's not. No. No. And sometimes you don't get to eat and so you have cheese and crackers on the plane. Like so, you know, and people might think that's amazing, but yeah, sometimes you're like, yeah, no. Cheese and crackers again.

Peter Schravemade (02:13)

For you, Kasey. I don't know if anyone's going to look at me and go, He hasn't eaten in a while. They're probably going to put me on a diet. But I certainly enjoy coming back to your point I certainly enjoy hearing from other real estate agents as to how the profession is proceeding in their area and the you know some of the issues that they face that we deal with on this show and there's a large reason why we put before the weekend together. So we should kick in and our first story our first story of today is Operation Claw, which as I said it sounds it sounds quite spectacular. So AUSTRAC would have to be one of the most boring organizations I've ever encountered. I had the pleasure of meeting Brendan Thomas, the CEO, or a year and a half ago, and he's not a very exciting dude. I mean he wound up. Sorry, Brendan. Maybe he rages outside of

Kasey McDonald (03:10)

He's keeping all of that energy for the weekend.

Peter Schravemade (03:13)

Yeah, he is the CEO of AUSTRAC. But one of the things that I thought I'd bring to the attention, it's typically not a story that we would talk about, but there was a lot of conjecture when AML and CTF came in and I was one of the voices. I actually I actually asked Brendan Thomas exactly this question when he was on stage at LIFT in 2025. I couldn't understand why there were so many checkpoints. So For those of you who are uncertain as to how the AML CTF is working, if Kasey is a seller and I'm a buyer's agent and we have paired a buyer and seller together, we have to check to make sure that we understand who our how who our client is. Know your buyer, know your client, we would both have to do checks. Then the conveyancers behind us would have to do checks. Then the finance institution would have to do checks. And all of these are the same checks, just to make sure that the, you know, there's no funky business going in. And I what I couldn't understand is why are there so many checkpoints in there? Like why does six of us have to do AML CTF checks to ensure that this person is correct? Well, I think this article kind of answers that. So the story in case you're not aware is well do you do you know have you read this article, Kasey, or do you want me to cover off on it?

Kasey McDonald (04:40)

Yeah, no, I have I have read it. And I guess this the broader storyline I think that everyone's going to see for those that are listening is that it's worded as mortgage fraud. So if anyone looking for the story, let's probably kind of just share with our listeners that's what that you should be looking for if you want to obviously have a read of this and interpret that content of that article yourself. But yeah, please continue, Pete.

Peter Schravemade (05:06)

Pete. Yeah, well it the main point that real estate agents or property professionals need to focus on is that this was a joint analysis of data from 10 Australian major banks. So it wouldn't have they wouldn't have been able to find this had they just looked at the data from a singular bank. And why this is so important is that the 10 banks, the data from that or data It showed inflated incomes, misrepresented employment, fabricated or unverifiable business activity, offshore and third party funds used to complete settlements and make repayments. Now, the thing that Brendan Thomas was saying is that one bank on its own wouldn't have been able to have a look at this, but because they have the ability to look at 10 and the data from that, they were able to pick up there was major fraud happening like bank fraud and it's hundreds of millions of dollars. Ten banks, hundreds of millions of dollars. Now you know, coming back to my original point, I was like, Why so many checkpoints? And I think AUSTRAC may have answered that with this article, even though they're not pointing to it because they're boring. Told you so. I felt when I was reading this, a big sense of regret as to firing barbs at AUSTRAC about why all the checkpoints. Well, I'm saying that the multiple checkpoints in Australian banks is actually working because we're looking at the data from that. And although it's subtly different, there aren't major differences between one bank and the other, we were able to pick up that hundreds of millions of dollars of major fraud. Now, the thing that thing that I'm going to put forward is that this is retrospective. How do we make it proactive? So We don't lose hundreds of millions of dollars. But I like I don't know, do you have another read on that? That was the major story for me was understanding how AML CTF is actually going to work in practice and why those multiple checkpoints are so important.

Kasey McDonald (07:15)

Yeah, agree with that. I think I guess to put it in layman's terms is the as a part of that, the reason we now have to do it, because it's what I'm hearing on the ground as well, is obviously the conveyancing solicitor is doing the checks, real estates are doing the checks, you know, and there's obviously queries around why. But just remembering, I think the ultimate I guess sentence that I've taken out of this article is that at the end of the day, the transaction passed through the agency's. Trust account or somebody's trust account and we're a part of that transaction. So I you know, this is why, and I think that's the underlying message is that it's still a transaction coming through the real estate organization. And we've got to do those checks and balances now to ensure that there are there aren't, I guess, misconducts or frauds happening in that regard. We are identifying those people who are actually buying and or our client, of course, selling. Yeah.

Peter Schravemade (08:16)

Yeah. Yeah. And I suppose to pull this all back, you know, if you're a principal in Sydney where most of this mortgage fraud happened, what do you do on Monday? And I think firstly if you're a principal in Sydney and you're not currently enrolled in AML CTF and have no processes, you've got big issues. So that would be the first one. Tranche 2 has been live for seven weeks. So the second thing is that comes out of this is if a buyer's funds arrive from a third party or offshore, what policy do you actually have in place? Is it a person's instinct? Is it Joan who works in accounts? Is it for her to deal with? Or do you actually have an ironclad policy in place? And then the second thing is has your agency, if you're in Sydney, because all of this was in Sydney or a lot of the vast majority has your agency filed a single SMR? And if not, is that because there was nothing to report or nobody knows how? And then the SMR is like an alert that says, look, we've got a bit of an issue here. This looks to be like it could be could be an issue. And you know, we know now AUSTRAC flagging that they're actively looking at Sydney. And if you are If you were organized crime, you'd probably be looking at that and now targeting Brisbane, Melbourne, Adelaide and Perth. So, you know, I don't think it's just a wake up call for Sydney. I think it's a it's across the board. But super interesting, like I was not a skeptic of AML CTF, by the way. I b there is a good reason we bring that in. We shouldn't have we shouldn't have money laundering, we shouldn't be funding counter terrorism. I fully understood that. I was a absolute critic of the way they did it because I've seen it better. In Singapore they have a national identity card called Sing Pass and it deals with all of this. Therefore the onus is not on small business, which is a real estate agent to do it. I'm still a massive critic of that. I couldn't understand why all of the checkpoints needed to be there. I think Brendan Thomas has answered why the check checkpoints need to be there, but I don't think I still don't think that Australia is best practice in AML CTF. I think if you go and have a look at the Singaporeans that much better. And we didn't even you know, when I when I threw that question to Brendan Thomas back in the day, he didn't even know about the Singaporean system. So, I'm you know, I'm not rewinding everything I've said on that, but he has certainly answered why so many checkpoints. And I think that's because that's going to show up in the data behind that they're seeing. Like if there's a single flag in there that might correlate to a financial institution and they might be able to track it from there. So really interesting. Even though it's happened, it's a good learning for all of the real estate agents to get their head around.

Kasey McDonald (11:09)

Absolutely. Look, I think, you know, compliance is important for those listening today. Don't just now have undertaken your training, kind of got your document in place and then just put it on the shelf and think, yeah, that's okay. I've done and I've ticked a box. You know, this is really important and compliance within our industry needs to remain as a high priority in how we operate. So yeah.

Peter Schravemade (11:33)

Yeah, yep. Let's move on. So in our next segment, we're this is we're talking, I suppose, property management, but it's not specific to that. So Ray White modeling, which was published yesterday, 20th of August, post negative gearing. The break-even gross yield for a leveraged investor is around 5.15%, with an 80% loan-to-value ratio and 6.5% rate. So for pre-tax cash flow neutrality, you're looking at about 6.5%. That's the Ray White economics figures. Capital City gross yields sit at 3.95%. That's Cotality. They're saying 3.3% for houses, 4.76 for apartments. So holding prices are flat, but r everyone's predicting that rents have to rise about thirty per cent nationally for investors to reach breakeven. So this has been a big story this week. We heard this come out in financial modeling. It's featured the opposition have been attacking the Albanese government about this figure because remember we had the stat thrown at us that rents are going to rise by only two dollars. Yeah. Actually my our friend of the program, Mike Mortlock, put a really good spin on that this week and said people are misunderstanding that, but then said it's still a it's still a poor figure to be quoting. So I'll get you to go and have a look at Mike Mortlock's podcast because he explains that in great detail. But we still have a massive problem because people are saying that rents are about to rise. And you do you remember talking to Tim Lawless from Cotality about this at ARIC in May. And do you remember what he said about the about the state of rents? He used a really interesting word called elasticity, and he said the tenant doesn't have the elasticity in their finance to pay more in rentals, right?

Kasey McDonald (13:29)

Yeah, that's that affordability piece, right? There's just no flicks currently. But we're already seeing, and I saw this morning actually, where there's particular pockets and they were only showcasing this within the Sydney regions, but there were there was areas like Narrabeen and the entrance that are already shifting and have shifted within the last 30 Of 11%, 7% rises. And some, I think one location was at 14%. So it's already starting to occur in particular pockets. And I think it's really important that property managers probably understand the two phases of this, right? So you've got this tenant affordability piece, and how are we looking at that and working with them? To ensure that then we're not going to have a an influx of vacant properties, tenants in arrears, more, I guess, going through the tribunals, which we all know are already at bottleneck. So, you know, what is it that property managers need to understand about that piece? But also what do they need to understand about yields and how that model works? And more importantly, how they're explaining that to their landlords.

Peter Schravemade (14:52)

Yep. And I'm going to put my hand up and say I locked in all my tenants on two year leases the other day.

Kasey McDonald (14:58)

Mm-hmm. Wow. So you're like leading into our next article, which says that unions want that, right? And think that should be coming become legislation. But yeah.

Peter Schravemade (15:07)

I'm aware, I'm aware that I'm going to take a bath on that. My property managers are all saying, like they're saying now, I could have put the rents up fifty dollars per week. But I'm looking at what I'm earning and I'm going, that is sufficient, that's covering my mortgage and I've got great tenants in place. Every single property manager are reporting back that. All of the regular inspections come back. And I'm putting a message out to investors to say that if you're in my position and you can afford to do so, you should you should do so. Now that's a huge risk to me because same the interest rates might rise another three times in that. And I potentially could I don't think I'd go backwards on three, but four might be cutting it very, very fine. But you know, the this is This is the industry that we're in and I'm looking at the amount that they're paying and I'm going, That's ridiculous. If that was my kid out there, you know, and but y there's one of my properties too, by the way, that has all of the utilities covered. So they're not even absorbing that cost of living. I'm bearing that as well. And this is not putting myself on a grandstand, it's more just saying that there needs to be a and my property managers to your point did this really well. They came to me and they said, You're at you're at the lower end at the moment. You could put your rents up. It's you know, it's 12 months. You could you could easily raise your rents. And I said, Well, how do you think that would impact the tenants that were there? And they said, Well, one out of them would definitely go. There's no way that they'd be there. And this particular person has been incredibly loyal for a very, very long time. And very helpful around the property. Nothing's too hard for them. They respect it really well. And I'm like, well, I don't want to lose that tenant. So here is what here is what we did. And we it gives them surety. They you know a two year lease in this kind of market is crazy. I'm not necessarily condoning that. I think you probably should go at one. But yeah, very, very interesting that this I just want to highlight one thing. So Cate Bakos, the PIPA chair, which is Really, really she's really, really lovely. She said established property investors outside of self managed super funds for a very brief window have pretty much left our market since the twelfth of May. Maybe two per cent still exists. Two out of ninety-eight. We're going to come back to that comment, but that was part of this article. So we're you know, the whole idea of this budget, if I want to pull it back to that, and the capital gains taxes, all of the change to negative gearing. Was to get first home buyers into the market. We have spectacularly seen that's not the case. Now, one of the things that the treasurer said at the time is he said, we're going to see property investors come into the market. Well, we have nearly every single source of information telling us we've got the construction industry, we've got the real estate industry, we've got the buyer's agents industry saying investors have fled the market. Not just that they're not there, they are silent. They're done There is no nothing going on at the moment. I have reports of property developments, th a 35 lot property development where 23 of them were done in to investors. They've all canceled the contract and there is no further interest coming through, which is that's catastrophic if you're a developer. That means that the funding that you are about to rely on to actually complete the development has gone missing in action. And I'm seeing this across the market. It is it is less than and then on top of that, this article saying that rents are going to rise catastrophically. Of course they are. We're not pouring any more investment property into the into the market. So I don't I don't know. I don't know, Kasey. I just do you know do you know this kind of stuff leads to a lot of a lot of this is further down the track. But not far away from where we are leads to a lot of social issues. So on the absolutely on the back

Kasey McDonald (19:19)

Absolutely. Yeah.

Peter Schravemade (19:21)

Of things like this, we see homelessness rise, we see people living out of their cars. And I would have already said it's the worst I have ever seen it in generations, where we have whole tent cities devoted to we've got city councils designating areas for homeless people, which I think is un-Australian. That should never happen. We should never be in a scenario We've got enough land here. We're the lucky country. We should be we should have enough roofs to h to shelter people. But we have now homeless camps. We're wondering why crime rates are rising. And, you know, not to throw a shade at any of the government's this adult tri adult crime adult time. That's coming about because our these people are growing up in less than satisfactory communities that we don't see. We're quite fortunate where we live and in the scenario that we're in. But the more that we see this, the worse it gets for a society. It's not a case of sitting here going, woe is me and investors not buying a house. The knock-on effect of this is just absolutely shocking. And it sits outside of real estate. It makes everything difficult for our society. We just shouldn't be in this position.

Kasey McDonald (20:32)

Yeah. Yeah. And I think a really key aspect that I'd like to put forward to our listeners, especially principals and our property managers who are listening, you know, respectfully, as a part of our training and education, we don't go through these types of numbers or these situations. You know, what you're taught and you know, initially when you go to think, hey, I want to get into real estate, I'm going to start in property management. Is yes, you know, you're taught about legislation, you know, how best to complete a tenancy agreement and what particular clauses mean and the right and the wrong. But we're not taught how to have these types of conversations effectively. More importantly, it's not about us being a financial planner or providing financial advice. And I'm not suggesting that anyone needs to do that, but principals listening. You need to make sure that you are investing the right type of training to your property managers and your BDMs right now. It matters more than anything to so they understand what is the strategy you're going to have in your business about retaining the customers you have. Also, what kind of advice are they advising landlords, right? Like not every property manager has the skill set, experience, or takes on some of the learning and development themselves to go. What is yield? How do I calculate it? How do I understand what the gap could mean? Do I suggest a two-year lease with an increase at the 12 month mark? And what does that even look like? You know, so what types of conversations are we actually happening? Because remembering many within the industry are still young. They might not even own a property themselves, Peter. They could be 25, 26. They're also trying to potentially get into the market. They're not the economist, but yet they've got to answer and field. All of these questions from a landlord going, what should I do? And so anyone listening, get the right training in, get someone in to talk to your teams about this type of information so they feel more empowered and more confident to share some of those key metrics, and then know where to guide the landlord from after that.

Peter Schravemade (22:47)

That. Well we do have a solution coming later on later on the program. I'm aware that you may not know the full ins and outs of what Zapiio does at Z-A-P-I-I-O. But one of the things that they do is they assist property managers in understanding the portfolio of the investor that they're dealing with. Right. So they do full analysis of that and so I would be pointing principles to that piece of technology because it's time saving. Like, you know, to get somebody in to analyze, let's say, your portfolio, that they might do it and it might take them weeks to do it, the snapshot as it sits. But this is technology that does it on the fly. So you know, Josh Deckart's coming up. The I'm not going to sell his product for him, but to that point. Let's move on because I there's this next one actually made me angry. I get I get that feeling from a few articles I read, but having just read the article that we've just read and understanding that investors have fled the market, we've got the PIPA chair saying that less than two per cent remain out of ninety eight per cent. Catastrophic for the buyer's agents industry. We now have this union and you know how favorable I am to unions at the moment. Unions have a place, don't get me wrong, but because of the corruption associated with a lot of the unions at the moment, they're a little bit on the nose. And I'm one of the people who are skeptical of the way they behave at the moment because that a lot of them have been infiltrated by organized crime. The ACTU has put together a housing plan to the federal government on Tuesday, the eighteenth of August. So three days ago, a national two-year minimum lease standard, public housing from one in fifty to one in ten new homes. I do these people actually understand how the market works, or they are they just idiots who are sitting here going, you know what, this is going to appeal to our members, so we'll put it forward. Do they understand that there are no investors currently purchasing in the market? Rents are tipped to go up by 30%. But hang on a second. Compulsory two-year offer to renters. Now I know that I just turned around before and said that I am offering mine to a two-year period. That should be optional. There's no way that should be compulsory. You will see investors liquidate their properties quicker than anything. And we know now at the moment that the f the whole idea of the first home buyers coming in to pick it up, that's not going to happen. Like that hasn't happened. The banks are telling us they're no longer lending in the way that they were to that sector. So wha for what purpose would this would this come in? And like it seems to be a grab to try and get renter voters, but I don't know if you're reading this the same way I'm reading this, Kasey, but this just made my blood boil. It's just stupidity in its finest form.

Kasey McDonald (25:42)

Yeah, to make it mandatory, I think, is absolutely stupid. It should be a choice, but more importantly, not every single renter might also want a two-year lease. And I think that's where they've also missed they've also missed that, right? Like everyone's circumstances are completely different. And a renter might only need that home for 12 months because they've needed to relocate for that work contract for 12 months. So why Would they sign a two-year lease? Why would they want to bind themselves as a renter to that? But it just it just means that from then even operating a real estate business, you know, internal processes would need to change, you know, their revenue will be impacted. So then would we see real estate businesses, you know, exiting if this change came in, which then of course is just going to make it, I guess, even worse for our market. More homeless, n you know, less homes, less investors. There'll be a flood of properties for sale. So I just they have not thought about it. Again, those trying to come in and make policy without one understanding our industry and two, without actually consulting with the right type of people before presenting this type of policy to government.

Peter Schravemade (26:58)

Well I actually don't know if anyone would sell anything. I think what you would see is could we can't sell it because of the tax changes. So I'm one of the people holding something. I wouldn't sell it because the government gets fifty per cent of the profit of that. So there's no point There wasn't part of my strategy anyway to sell a property that I purchased. It the idea is to build wealth like every other Australian parent that has purchased a property.

Kasey McDonald (27:24)

'Cause we're all going to work 'til we're eighty or eighty-five now. And you know, super's not, you know, super's not going to support us anymore. Many of us aren't getting that the pension. And so we're relying on this, right? Like this is our wealth strategy.

Peter Schravemade (27:39)

So I don't I don't think that you would see I think it was Mike Mortlock gave us a figure of about seventy per cent of investor owners and mums and dads. I'm one of them. I'm not a professional investor. I am a mama or a dad who has built, even though I'm in the real estate industry, I've just built wealth by building put it putting one house after the other and I've lived in all of them. So it's not a case of I've gone out to seek an investment property, I've just retained one and rented it. Anyway, not defending myself here, but the perspective is I if they said that tomorrow and that came into play, I wouldn't necessarily change anything about selling a property. And I don't think many of the mums and dads would do. What you would see is they would go, What price do we have to put this at to cover the possible changes to interest rates over the next two years? Now I hedged my bets and I took a risk. I might lose that risk. We'll follow it through this podcast, right? We'll follow it. We'll come back and look at it in six months and go, you know, are you losing money? Etc. And it could be that the tenant needs to get out in those two years as well. Two years is a long time. In absolutely

Kasey McDonald (28:48)

Mm-hmm. Absolutely.

Peter Schravemade (28:49)

In eighteen to twenty-five year old periods. Like you they lose their job. I'm going to have to be understanding of that. It's a big ask for that tenant. But I think what you're going to see is investors are going to go, rightyo, we've got two years. The rent's currently at $1,000 per week. We're going to up that to $1,500 just to cover any potential changes. And again, who do you think loses out in that process? It's not it's not the it's not the landlord. The stupidity of this suggestion is just insane. It is just crazy. I

Kasey McDonald (29:23)

Yeah, we're just we're just shifting it all to again this whole piece where you know we sort of started this rents were kind of not affordable already, right? But it sort of was not more about an affordability piece. It's always been about supply, right? About where we are positioned, right? But it'll then it'll shift. And whilst it still will be about supply, but to some of our earlier points, and absolutely to Tim's point, you know, back in May. Is that the tenants are already at the point, they're already at capacity, right? And now we're already looking at increases coming in. They're going to get to 30%, and then by doing this, it's going to increase it even more. Because then as a part of their strategy, there's just not going to be any further supply come to market.

Peter Schravemade (30:09)

Yep. Look, let's move on and let's invite our special guest, Josh Deckart. I th you've met Josh prior to now, haven't you? Yeah. And we've

Kasey McDonald (30:17)

I met Josh. Yes, yes.

Peter Schravemade (30:19)

Spoken about Zapiio in this program. Zapiio is he's a tech technology provider, but has a deep history in his background, he went into the buyer's agents field and saw a need for a portfolio analysis, which is what Zapiio does. Maybe we'll look at that in a tech byte, but the objective of I getting him on here today wasn't to talk anything about his technology or sell it. He's talking about the state of the market when it comes to buyer's agents. Now I've seen a bucket load of real estate agents comment about how much they hate these are selling agents, how much they hate buyer's agents in the market. Well, look, for those for those of selling agents who are out there, there are some really great buyer's agents in the market. I've met them, I've worked with the professional institutions. They are wonderful people. Mike Mortlock, we had on the program, he's a quantity surveyor, he works with that industry. There are quite a lot of them who are genuinely excellent. And just like selling agents, there are some of them who are not necessarily so conscionable, you know, and not mentioning any names, but you know, our Dashdot mate Goose, [passage removed pending verification] with a bucket load of mums and dads' money. He might be one of them. This is all alleged. No one knows anything at the moment, but that looks very suspicious to me. So let's go to let's flip to Josh and let's have a listen to what he has to say. G'day folks, this Peter Schravemade. I am not joined today by Kasey McDonald. She is busy working. Someone's got to do it. So off she is working. I am joined by Josh from Zapiio. Josh is part of part of the Reach Australia and New Zealand cohort for twenty six. Josh, where are you joining from today?

Josh Deckart (32:10)

I'm in the beautiful rainy south coast of New South Wales.

Peter Schravemade (32:14)

As I am in the beautiful rainy Queensland, Sunshine Coast. Well, it's good to have you on board. And one of the things that we were thinking about in order to get you on board is we've been talking, Kasey, myself, and even guests on the show have been talking quite a lot about the plight of the buyer's agent and I in this current market, what that means, what is happening, and I'm well aware that you've got your finger on the pulse, but for those of those listeners and I guess the people are watching on YouTube as well, who I have never met you before and don't know who you are, or don't know anything about Zapiio, what is it that you actually do?

Josh Deckart (32:52)

Yeah, so thanks for having me on. I guess the main concept behind Zapiio is to create a plan, portfolio plan, which really helps an investor deconstruct what the moves are they need to make and really plan ahead, move things around, residential, commercial, what are the best next steps? That's primarily driven by agencies like buyer's agents, accountants and brokers at this stage, just helping their clients get ahead and really just giving yourself clarity to be honest.

Peter Schravemade (33:23)

So the people in the real estate industry that you work with are primarily buyer's agents, would you say? Was is that is that a lot of the client that you work with? Are there others?

Josh Deckart (33:35)

Majority of them are buyer's agents at this stage. We do work with some brokers, but the dominant cohort is buyer's agents. Yes. Yeah.

Peter Schravemade (33:43)

And you know, I guess so far as climate, market climate at the moment, we've seen the you know, the federal budget came out, there's tax reform out. In most of our states and territories, we've seen incredible changes of compliance and regulation all of a sudden hit the real estate industry, all the way from sales through to property management through to buyer's agents. What is it exactly that you're seeing in the wake of I'm going to call it the end of financial year, which includes, you know, that includes obviously the tax changes and it all also includes the federal budget. What are you seeing in buyer's agents land? What's the feeling on the ground? What's happening?

Josh Deckart (34:31)

Yeah, so it's an interesting one because there's been multiple different events like happening at the same time. So I guess to break it down just a little bit, in May we had the budget, which really sort of put a bit of uncertainty in the air, just around property in general, particularly residential. And then at the same time we had the proposed SMSF changes, which obviously have now gone through. So, you know, we're seeing a little bit of a complete landscape change, and then you throw in the their money laundering compliance as well. So there's three distinct big ticket items that have happened at once. But to be honest, it's just a little bit of uncertainty. And from a structural point of view, nothing's really changed from a supply and demand point of view. But from an agency level professional basis, it's just harder conversations with clients, very difficult to give clarity to clients, I guess is probably the, you know, in a time of uncertainty, Is it the right move that I'm trying to make? Is really what everyone's asking, or should I hold off? Is it the bottom? What's going to happen moving forward? So ultimately it's uncertainty. People just can't answer the questions that they could answer three or four months ago and you know, the questions just keep coming.

Peter Schravemade (35:43)

Yeah, and we've seen that uncertainty in other areas like sales, property management, there's uncertainty. So it makes it, you know, it's not surprising to me that buyers, agents are also impacted. What where does it actually lie though? Is it the investor has pulled out of the market, the self-managed super funds are pulled out of the market, or you know, are exhibiting no confidence in transacting at the moment? Is that what you think you're seeing across the board and how what is the impact upon buyer's agents?

Josh Deckart (36:17)

Yeah, so interestingly, I think there's definitely been a pullback in the amount of investors that want to so called pull the trigger and purchase.

Peter Schravemade (36:26)

I'm one of them. I'm on the record as one of them. You know, we were about to go to get go again personally, and then we had prepared a self managed super fund to invest. And at the moment I'm kind of in limbo. So I can completely relate to that. I'm one of the people who are not currently investing in housing stock at the moment, but have the capacity to actually do so. Yeah, continue. Sorry.

Josh Deckart (36:48)

I guess I guess the point is that, you know, you're sitting there and the investors are sitting there saying, I was going to pull the trigger, but now what's going to happen? What's my cash flow look like? You know, is this going to put me in a hole? If there is a downturn, are we going to end up with negative equity? And that's really a sort of a I guess a framing for, hey, let's just sit on the sidelines. So it's not a matter of me not wanting to invest, it's a matter of, you know, Is now the right time. And I guess the ultimate question is it comes down to are you doing it personally? Are you doing it in SMSF? Because what we did see is a big flood actually. So some of the buyer's agents that we work with have done record numbers over the last two months on SMSF deals specifically, because they're all rushing to get in by the twelfth of August. And it's an interesting narrative that, you know, nothing really changed. The supply hasn't changed, as I said earlier.

Peter Schravemade (37:40)

August has been gone now, so we're

Josh Deckart (37:42)

Yeah, yeah. So

Peter Schravemade (37:44)

At age now.

Josh Deckart (37:45)

This week so or last week and so there was a massive flood of investors push it into residential and now what we're hearing on the ground is it's actually more or less slowed down to nothing, is grinding to an absolute halt. Now that's the residential marketplace. SMSF commercial still works. But yeah, just generally speaking, investors are on the sidelines and want to see how the rate's looking. Are they going to hold? Are they going to cut? And just sitting on the sidelines until, you know, the dust settles, so to speak. You know. Yep.

Peter Schravemade (38:16)

Yeah, well I've got in the back of my mind that it's been so unpopular. And like I'm watching the news on it and the news is, by the way, not my Bible. I don't sit there and go, they've said that on channel nine, therefore I must sign off on it. But I am I have in the back of my mind something you haven't mentioned yet, is that I'm wondering whether there's a repeal coming. You know, this government doesn't make it through to the next election. And the other one rides in on a wave of going, We're going to switch it all back the way it is. And so you which is further uncertainty and a delayed time frame that, you know, I think is catastrophic to the industry.

Josh Deckart (38:57)

And it is, yeah, it is catastrophic. We're hearing, you know, we obviously talk to multiple other businesses, selling side as well. You know, they're saying that they've got or property managers have really big churn. You've got selling agencies, the ones that are very low volume are leaving the market. Selling agents Look, it's very hard to get leads. The stimulus was intended at being a primarily PPOR based or owner occupier based stimulus. The brokers that we talk to daily are actually saying that the there's record low volumes of owner occupiers now entering the market for the exact same reason. They don't want to lose money. You know, no one wants to go and buy a house and lose money and then not be able to move and to upgrade in the future because they've got negative equity. And I think that, you know, just generally it's all sentiment psychology. And people are very scared to be in a position and going backwards. On the contrary to that though, you've also got a cohort of investors that are quite savvy, have been around and seen have a long term horizon and they're looking at this going, this is a really good opportunity to get into the marketplace, you know, regardless of tax incentives. If you're set up pretty well and you've got the capacity to do so, looking at a extended timeline, you know, those people are still in the market, quite active. They are also migrating to other asset classes as well. So This is a combination of probably about ten different things, to be honest.

Peter Schravemade (40:24)

Well, I see the federal treasurer came out. It was it was two weeks ago, so old news now, but he came out saying there'd been a record amount of companies set up and yeah, you know, just the stupidity behind that because all I'm seeing is small business go bust. Yet he's he was citing that as evidence of small business gains. But of course we've seen the business council of Australia and a bunch of others come out and say that's actually not the case. The what the treasurer is seeing. Is a bunch of savvy investors start companies in order to invest in commercial enterprises. Is that does that echo what you're seeing in the market?

Josh Deckart (41:01)

Yeah, to be honest, it's exactly what's happening. SMSFs require a company to be set up and likewise, you know, if you talk to property savvy accountants, a lot of the talk now is that commercial or so corporation is the way to go in many instances. That's you know, depends on your situation. But the reality is the savvy investors were using that prior to the budget as well and so for them it's business as usual. It just means you can get things at a slight discount. But yeah, it's record numbers and they've obviously got a grace period of restructuring that they're talking about implementing to allow people to move structures and whatnot. Now, you know, we're going to see those numbers, but it's pretty distorted metric. To be blunt, it's pretty ridiculous to associate that with business success. But we're seeing the opposite. People don't want to spend and that's not just in real estate.

Peter Schravemade (41:56)

No, I see consumer confidence is down in even in the retail space. JB HiFi came out yesterday swinging saying that they were they were down month on month and they're down a further 14% this month in retail spend. So I you know, the this whole confidence thing, it's not just affecting real estate, although it seems to have been a catastrophic impact for the market so far. Kasey was at a conference last week and they were saying how flat it was in the sales side. You know, I've got you here telling us what the feeling is on the ground for buyer's agents. That there've been you know, I have to really address the elephant in the room because there have been a series of high profile and low profile buyer's agents seize, close, leave, go bankrupt. You know, Dashdot was one that made national headlines. I think he left owing sixteen and a half million with seventy-one thousand dollars worth of assets. And now he's come out as a business coach. He's a guy called Goose, isn't he? Isn't that isn't that what they're calling

Josh Deckart (43:03)

Yeah, that's correct. Yeah. Yeah.

Peter Schravemade (43:05)

The irony, the irony of all that. Anyway, so Goose has sent a company bankrupt. Apparently it was registered in the Cayman Islands all of a sudden and all of the money's gone missing. This is what the news is reporting, and again, not my Bible, but if that's legitimate and then he now he's come out as a failed business owner who's gone bankrupt, training people how to be better at business, is that what you're hearing as well? And to extrapolate that out, are you seeing buyer's agents leave the market? Yeah, how is this playing out in the world of buyer's agents?

Josh Deckart (43:42)

Yeah, so look, even when times are good, there's people that, you know, struggle to build big businesses and then there's the small operators, there's the medium operations, and you've got the real corporate style buyer's agency. So I think there's three distinctly different, you know, business models there. The small guys, I could I could name fifty that are leaving the space and got part time jobs are gone back to working in their own their old industry. The middle guys are really starting to clamp down. You know word is across the industry that there's lots of redundancies, like a lot a significant amount of redundancies. What I want to like really allude to is that's from, you know, when times are good, it's very easy to bloat a business with staff. And so, you know, we're seeing quite large fees as well come out of a lot of these businesses. You know, lots of lots of clients, lots of staff and large fees. And so It is hard and we're seeing, yeah, there's quite a few potentially on the horizon that are looking not so great, even at the larger scale. Pretty well known operators and everyone's hurting collectively. You know, it I think it doesn't discriminate. The market conditions and shift in sentiment definitely doesn't discriminate. When there's uncertainty and no one wants to w wants to pull the trigger. Despite opportunity, people really sit back and just say, Hey, look, no, it's not for me and you know Unfortunately, the way that real estate's structured is that, you know, you need people to do the job. Technology is a really, really foundational part of that. But, you know, building a business that's full of heaps of people to do lots of deals, when you don't have those deals, it starts getting pretty hard. So yeah, I wouldn't be surprised if a few more you know, start falling and you know, we're hearing that there's a few that are pretty close to that.

Peter Schravemade (45:29)

Yeah. And I suppose if you're listening to this and you are a buyer's agency and you're in that in a scenario where you know, it's looking pretty bleak at the moment, can I suggest that there are you there is assistance available? All real estate agents, buyer's agents included, have access to something called the Realcare app through the Rise Initiative, which entitles you to mental health sessions and things like that. So I'm conscious of the fact that there may be peace people listening to this who are in a dire scenario at the moment. And I guess I'm saying to you, there's always a light at the end of the tunnel. If you're in that scenario, seek help if you if you need to. But it's incredibly sad how quickly things have turned. Like we're a month and a half out, right? It was it was a different market a month and a half ago. I'm am I am I not wrong there?

Josh Deckart (46:24)

Yeah, yeah, look, I think that the when we're talking about the budget in isolation, it probably it didn't the full effects of that didn't flow through instantly. And that was because the superannuation changes were delayed until August. So, you know, many businesses are probably sitting on a, you know, a pretty good month or, you know, two months. And so for them it's not so bad. They've been very stressed and very busy trying to get all the residential deals through the pipeline. But now it's slowed down. I think you know, the next four weeks particularly will be a very, very concerning time for many businesses as they sort of realise that they're all dried up now. The SMSF wave is finished and we're now migrating into a space of or an uncharted territory where marketing conditions aren't great. Yes, there are opportunities, but sentiment's down and people quite frankly, you know, they don't want to just buy a deal. They need to sit down and make sure it's the right decision for them, I think is the ultimate, you know, way forward.

Peter Schravemade (47:24)

Yeah. One of the things I spoke to you about off air earlier, and it may have even been last week, is ADU's we call them granny flats, second dwellings. Well there is a whole heap of terms for them. This is this is something that is becoming increasingly more popular. Am I am I wrong there or

Josh Deckart (47:46)

Yes, it is. Yeah. You know, it depending on how you structure it and yes, it is very, very popular. It does solve a real big issue, to be honest. It's one of the unfortunately the government doesn't see it as a new dwelling per se in the budget and how they, you know, pulled down the part the are pulled apart the budget. But it does serve a real purpose not only for investors, but adding additional stock to the market. You know, savvy investors are looking at them. You know, there's two different conflicting You know, arguments around secondary dwellings. Using the word granny flat's probably not the best term and I know we talk about this offline all the time. Secondary dwellings is probably a better term for them. However they are

Peter Schravemade (48:26)

Referred to as a Fonzie flat. If you've ever watched Happy Days, they used to live in you know I've they've got different names wherever they go. ADU is in the American, that's a accessory dwelling unit.

Josh Deckart (48:39)

And if you look at you know the cost benefit, you know, you're looking at something that, you know, could be anywhere from 180 to $300,000, which is still a lot of money in many instances, but they rent, they're quite they're quite nice, they appeal to a certain market, and they allow you to hold property, I think is probably the most important thing. So, you know, the fire sale and let's get rid of all my investments, it's everything's grim. Not necessarily. You might have options and that's something to explore. Doesn't appeal to everyone, doesn't appeal to every site, but it's definitely gaining popularity and it's definitely something to consider if holding long term is what you need to do and what you want to do. You know, that's a consideration if you can do it on your site for sure.

Peter Schravemade (49:22)

But I haven't really seen the fire sale. You know, I think that's what the federal government actually thought was going to happen. I think they bought this in and they thought, everyone's going to sell. And that's going to be great because we're going to, and they mentioned this in the budget, we're going to get this generational change where the baby boomers will you know, hand over the properties to the incoming first home buyers. Now, the first home buyers are all but out of the market. The capital gains is grandfathered if you're existing if you're an existing investor. So there's very little incentive for any of them to sell it. It just seems to be I don't know who they're talking to and I don't know you know, what I've heard all of this about treasury modeling and whatever else. I don't know who did it, but it just does not seem to have worked. I think it's fallen flat on its face at this stage.

Josh Deckart (50:16)

I would agree with you and my concern about what they've done is they've just put jet fuel on the commercial market, which is great for commercial investors, but it's actually probably the opposite to what they really intended on doing. You know, you've got an asset class that's linked by CPI, the leases, which the values driven by increase in CPI. We've also then got really, really low stock and has been for years in this in the commercial marketplace. So You've got the perfect storm for a migration of capital into commercial. And then you know which is which is happening massively. So in the commercial space right now, like if you're a commercial agent, like you can get listings, great. And commercial buyer's agency space is starting to ramp up. But the problem is that the capital migrates to commercial, that lease or that so that cost of rent gets passed on to obviously the landlord, the tenant. Once the they then have to pass that cost on as a small business or medium business owner to someone else, right? To cover off their rent. And so we've we're really stimulating this inflationary cycle that we've been seeing over the last few years. We're trying to shut it down. They're putting jet fuel on that side of the market and then the leases are CPI linked and it's a it's a self propelling, self propelling machine.

Peter Schravemade (51:32)

Regardless of whatever it turns up there's a CPI increase. CPI is correct. Yeah. Well, that's very that's a very interesting insight. So you know, I guess I guess for our listeners out there, there's a there's a fair bit of doom and gloom, but you're actually saying suggesting that there's still plenty of opportunity in the market. And you know, I've heard you talk about the who I would call Buyers agents have been in the industry for years and have seen similar markets to what is going on now. What would be your advice to somebody like me? Like I'm looking, I've obviously got the capacity to purchase. I'm in a holding pattern now, but I love a good opportunity as well. Like, you know, I'm still aware that there are great places to buy, Melbourne being one of them, even with all of their investor, you know, the having the legs cut out of. Everything that they do invested by the state government, the prices down there are ridiculously low, you know, in certain areas compared to other capital cities. So I'm a big believer that there's opportunity in every market. What would you your advice be to somebody like me?

Josh Deckart (52:44)

I think the best advice would be, you know, you can get caught up in these short-term cycles. And if you, if you actually take a medium to long-term outlook on everything and just look at historically what's actually happened in the marketplace, you'll really identify that things will come good. And if you can honestly say to yourself, do you see that the properties in Melbourne, for example, in 20 years' time are going to be the same or less than what they currently are? And you can honestly say that's the question, then don't invest. If you can see that there's this growth on the horizon, you know, people want to live here, and you can buy in the best possible area that you can afford, whether that's for owner, occupier, or investment that you would like to live for your for your budget, ultimately that's what's going to succeed. And then the next thing is cash flow. And so cash flow is oxygen and it's something that I got told that a long time ago, and that's something that w I will never forget. You know, just because you can buy something. Doesn't mean you can hold it forever. So just be conscious around cash flow. Model your cash flow before you buy. Just make sure you can. And if you can buy something with the opportunity to add cash flow, like you mentioned secondary dwellings earlier, buy with the intent or the ability to do so. It doesn't mean you have to. So when times get tough, there is a mechanism for you to continue moving forward, whether it's adding an extra door to that site, adding additional rent in some capacity so that you can hold it longer. For the long term. And I think contrary to what we've seen in the buyer's agent space of the last sort of five, you know, five years, everything has been very short. I think the market cycles are getting quite short. They're, you know, really ramping up. People pile in, people come out, they go to the next market and they're sort of following around Australia. You know, over the long term, buying the best possible area and you, you know, you, you're, you're basically going to set yourself up for success. This is all noise. It's a blip in the radar in the scheme of a twenty to thirty year investment. But there's opportunities. And what I can say is that you know, everyone's situation is different. And if someone the motivations behind a sale are always different. So whether you're on the buy side or sell side, unfortunately people have circumstances where they have to sell or they, you know, and someone else has to buy, you don't have a choice. There are opportunities, you just gotta know where to look and you know, just take a long term horizon, that's all I can say, and manage your cash flow.

Peter Schravemade (55:09)

For those of those listeners out there who want to find out more about your product, where do they where do they go to seek more information? And who would be the ideal person that would come looking at Zapiio?

Josh Deckart (55:22)

Yeah, so for us we run a few different models. So we have a Zapiio as a b as a business. And so you can you can have a look at that. We basically, you know, our product is based around just giving you clarity. So if clarity is something that you actually need and you want to understand what moves you need to make, or whether buying an investment versus an owner occupier, for example, just visit zapio.io and you can send an inquiry through there if that's something you're interested in. We can sit down and we'll just do a session with you and just give you clarity 'cause at the end of the day, right now, is that's exactly what people need. They just need clarity on the moves they're making and is it the right thing or yes or no? Just gotta feel comfortable.

Peter Schravemade (56:03)

Yeah, but you also work with principals and rent roles in helping property managers understand the portfolio of the clients that they serve, right?

Josh Deckart (56:16)

Yeah, so one of the really exciting things we've been doing lately actually is noting that churn is a quite a large part of a property management's business right now. It's been yeah, the rent role is obviously an asset base that they need a hold over the long term. And that's what you retire on. You retire on your asset base, you know. So we are looking to partner with property managers, identify what assets they have under management. And just looking for opportunities. And that might be a secondary dwelling. We can assess at scale. What are the opportunities there? Are there additional opportunities for you to add doors to your rent role? So that's to increase the amount of doors, increases the amount of rent and increases your asset base. But additional to that, it's just being seen as a trusted advisor and helping your investors out, get them into a session, basically understand and give them the clarity that they need. So that's something we are doing as well. And we do the same thing for brokers as well.

Peter Schravemade (57:13)

Outstanding. If you're listening today and you're interested in anything that Josh or Zapiio have to offer, I'm going to have all these details on any of the forums here, but definitely on before the weekend dot com and the episode the correlating episode that we have there. Josh, thank you so much for jumping on today and giving us the lie of the land. Hope to catch up with you further down the track on before the weekend. But you enjoy your week, what's left of it anyway?

Josh Deckart (57:40)

Yeah, thanks, Pete. Thanks, Abby. Appreciate it.

Peter Schravemade (57:44)

Kasey, what did you what did you think of Josh Deckart and his interview?

Kasey McDonald (57:49)

Great interview, great addition to before the weekend and just some of those key points that Josh shared. One in particular, around obviously the exiting of buyer's agents. Now Pete, you and him were also talking off air. So maybe you'd like to share a little bit about that.

Peter Schravemade (58:14)

For sure. Yeah. So before Josh jumped on, he shadowed that there he was aware that there was probably going to be another high-profile buyer's agency would fall or enter voluntary liquidation and he was he was dead right. During the course two hours. So that was recorded on Tuesday, but two hours after that interview, it was announced that Atlas would enter voluntary liquidation, which is another major buyer's agency gone under. And there are rumors circling of I've heard, you know, since that about other high profile buyers agencies. It's estimated, we think at the moment that around sixty-five per cent of buyer's agents who have left the industry in one shape or the other, in less than one and a half months or just over one and a half months now, which is catastrophic. And it's estimated — we think looking at the industry, this is not me and Josh, this is just the hive mind, are expecting anecdotally anywhere between eighty and eighty five per cent to be gone. Inside three months with only twenty per cent surviving. And, you know, that might be an indication of the professionalism or the longevity of the buyer's agents. But when you hear Cate Bakos from PIPA actually talk about only two per cent of investors remain, that's a light leading reason. Like if you lose ninety eight per cent of the consumer coming in, how would you possibly expect anything else? Can you imagine if 98% of sellers said we're not going to sell anymore, we would see a bloodbath through the real estate industry. Now as it is, it's already flat. And we're you're reporting that last week. We've heard that everywhere and they're already selling agents, selling agents, listing agents leaving. So, you know, the bloodbath on the other side, which is the buyer's agents, is just — you know, I hate to I hate to over dramatise it, but these are people losing their income. What I would say is if you're looking for a property professional at the moment, there's a lot of them out there looking for looking for gigs. You know, if you've found it hard to recruit somebody, you now would be your time. There seems to be quite a few of them looking for jobs right now.

Kasey McDonald (1:00:41)

Yeah, I think obviously with a lot of these reforms, right, this is where we've seen it because the buyers are just kind of being patient. Again, just hearing that in particular pockets, they are or they're going to open homes. They're looking around, but now that's exactly what they're doing. That they're thinking, yeah, you know, we're just going to wait. Because they're hearing that of course the prices are going to continue to fall. So if we don't have the buyers there, unfortunately, then we're, you know. It means that side of our industry I is collapsing and sadly though they're losing their jobs and their incomes. And those that have, I guess, I guess those buyers looking who have invested money to s have a buyer's agent support them, is also losing their money by doing so. And I just hope that there's not a lot of that happening. I hope some of those buyers also get any of those funds back as a part of these collapses. But Yeah, it's just really sad that a government has made decisions and it's just meant now that businesses are failing and people are losing their jobs.

Peter Schravemade (1:01:48)

Yeah, and there's a couple of warnings out of that. If you're dealing with the buyer's agents, like REBAA Vice President Zoran Solano says the warning sign of taking fifteen to twenty thousand dollars up front is an enormous large amount of upfront cost. So you shouldn't be taking that Ben Kingsley of PICA. Says while the industry remains unregulated, these property spruiker types will keep servicing and operating, never pay a hundred per cent up front. Cate Bakos, the PIPA chair, again says a lot of these buyer's agents have originated through the Buyer's Agents Institute, which is not a formally recognized training institute at all. So they're actually also saying the professional institutions are throwing some shade at buyer's agents who are not part of the industry associations that exist. And it's it is un it largely unregulated. You know, which is which is another angle. If you were to go and get advice on shares and stock investment, you would go to a financial planner.

Kasey McDonald (1:02:51)

Yes, I would.

Peter Schravemade (1:02:52)

There is no regulation for anyone telling you what property to buy. And that's been a very, very interesting thing for me is why is it one side needs somebody with a license and the other side it can be Joe Blow who has had no experience in doing that. Now, again, I will point you to the fact that there are a lot of amazing buyer's agents who are professionals in the industry and you'll probably see them as last men and women standing. But yeah, it's crazy. So industry response to Dashdot was three peak bodies issuing consumer warnings. And then now we're seeing exactly the same thing. After the Atlas collapse.

Kasey McDonald (1:03:35)

Yeah, thank you. And today on Before the Weekend, we have our special guest, Peter Diamantidis, CEO of Ray White United. Thanks for joining us this morning, Peter.

Peter Diamantidis (1:03:45)

Yeah, thank you for having me.

Kasey McDonald (1:03:47)

Yeah, I what I was really hoping that we could dive into was an article that we sort of read a month or so ago, I believe through Elite Agent. And the key kind of title was sales always get the trophies and kind of property management doesn't really get rewarded in the same way. And what resonated with me the most was about how you've thought about this in a different way for your property management team. So my first question for you is you know, why that What why that thought? Like what made you think of how you reward property managers? What makes you makes it different for you?

Peter Diamantidis (1:04:24)

Think the big thing for me was you know I've been in real estate now twenty four years and you know coming from a property management background before I got into sales I used to see that you know all the you know the highlights all the news it's all about salespeople but you see the property management team I've always looked at them as the engine room I've always said you know now you know of course more into sales is you know without you know a strong property management team you know, and then also a strong sales team, you could potentially get double market share in any area. So I've always believed in looking after them, rewarding them, trying to get them into that same level as a salesperson, because, you know, a lot of their work and what they do, they don't get recognized in our industry. So I've wanted to, you know, do something a little bit different and create that recognition program for PM.

Kasey McDonald (1:05:18)

Yeah, and so talk us through that if you don't mind. So I'd love to kind of understand the metrics behind it. And as a part of that,

Peter Diamantidis (1:05:26)

With

Kasey McDonald (1:05:28)

Do you do them differently for each role or is it kind of a team target?

Peter Diamantidis (1:05:35)

Yeah, so there's different recognition. So you've got the big one which I call it, it's the team one. Now we came up with this one here probably around nearly three years ago, where I said, you know what? You know, what would they like? You know, would they like just a bonus? Would they like to go away? And when I was speaking to a lot of the property managers, property office even leasing was, you know, a lot of them haven't been overseas. So I said to myself, you know what, let's try to create an overseas trip. So didn't give like, you know, location or anything, but we said, Listen, BDMs, you've got to hit, you know an X amount of property managements, but we run a pod system. So you've got your seniors, your property managers, and everything. So what it meant was you know, you can't have a certain amount of preventable losses. So five preventable losses or more, you don't qualify. You basically sync your team. But then you've got your BDMs also working to gain 500 organic managements. Now I know that sounds very high, but the where area that we cover, it's a pretty easy target. But then we chucked in also metrics like lease retention, because again that's big for controlling workloads and stuff like that, and then reviews. So what it meant was if you worked in our business for twelve months and you ticked all these metrics, we're going to pay for an overseas trip, you, your partner, you know, accommodation and everything like that. And it's worked well. You know, you know, we've ended it, you know, the first year we went to New Zealand, you know, five star resorts, accommodation. Last year Fiji, five star resorts. This year, next month we're heading over to Bali. So we're doing things and the good thing I love about it is it feels like a team effort to get to that recognition. So that big one is your overseas trip. And then of course we've always got like quarterly challenges and, you know, just trying to make it competitive. So then we don't, you know, think that, you know, property management, nine to five, you know, complaint, complaint, landlord, tenant, you know, you're getting beat around all the time. We want to make it a very you know, very interesting, but, you know, competitive and you know, to keep us on our toes.

Peter Schravemade (1:07:41)

Peter, Peter Schravemade here. Look, I love this idea. I think it's fantastic. I can see so many positives for it, all one of them obviously being culture to you, you know, increased sense of culture. Is there any pushback? Like, have you had a year where targets aren't met and is it market dependent? Like at the moment we're in a bit of a tough market. Do you see this as still being something that's offered or is it just when times are sailing and it's great?

Peter Diamantidis (1:08:09)

Well, the last well this will be the third year running, so they've qualified straight away. So from gaining property management, which technically should be the hardest thing to gain, but I will say in two years that have running, there has been two pods that have not made it. And, you know, it's been because of preventable loss. So I have been pretty hard on this because, you know, I've always believed in, you know, like you're setting the rules, you know, I if you've done the wrong thing, then unfortunately yeah, you get a few chances, you get five chances. But if you get to the sixth chance, you just won't make the trip. So no, even with the market as it is, I just feel that, you know, we're gaining so much momentum. I put a target of five hundred managements, they hit nearly eleven hundred. And that's organic growth. So, you know, like is the target too low? Now I'm not a person that, you know, will go and double it, but of course, this year now we're in the 2026/2027 financial year. I've changed it up a little bit more to add a few more little things into it to make it a little bit more creative.

Peter Schravemade (1:09:12)

Have you noticed a decrease in it attrition? So Are you retaining more of your property managers? I'm well aware of what the cost of hiring a new property manager is these days. And I think most of the principals listening to this would be wondering whether, you know, this has led to a less of an attrition. How is your team? You know, were they solid? Have you have you noticed a change in figures since you implemented this?

Peter Diamantidis (1:09:39)

Definitely. So I the figures that I've got is in the last three years in doing this, we've only had, I would say, I think it's two I'd say three, three property managers that have actually left. And hasn't left that we don't like the office or anything. It's either relocating, maternity leave, not coming back, or just out of the industry. So I look at it again, and it's a good point that you raised, is you know, you've probably got a lot of principles thinking this crap, this is going to cost me a lot of money. But the flip part of the thing is, I'll say to you, if you're running, I don't know, even just a I don't know, five hundred managements, how many times do you pay a recruiter every year? Two, three, four times? Just pay two recruiter fees, there's your troop.

Peter Schravemade (1:10:24)

Yeah. And the cost of the cost of I think we've got defined stats now on the cost of losing a property manager, which includes like not just the hiring process. I don't actually think a recruiter was factored into that. It's the cost of onboarding and the and the time management. I know Julie Davis and Katie Cotton from Recruit RE, which are two companies heavily engendered in that. They have actually put a dollar figure on it and it's not flattering. It's less than a trip to Bali. So you know, kudos to you for that. I think this is a brilliant system. Can you can you tell me like from the staff perspective, do is a lot of their is a lot of the way they operate focused now on achieving that status? Because like I if I was a property manager in your business and I'm about to apply by the way. I'm going to consider an application to come away for you. But me too.

Peter Diamantidis (1:11:14)

Yes. Very good. It's never recorded things. No record of things.

Peter Schravemade (1:11:21)

But is a lot of it like are they almost tunnel vision focused or can is it still operating as a business as such? Like do you do you find people cutting corners just to tick the KPI boxes that you've set for that or is it is it no, it's

Peter Diamantidis (1:11:36)

No, no, no one no one's no one's cut corners. Like I had a few decisions this financial year just passed where, you know, they're all very unfortunate and like you're on the you're right in the grey line and of course I'll always allow it. You know, like you know, you look at their effort and time and some things are out of their control. You know what I mean? Like, you know, some of our some of our team are working really long hours, they're putting effort in and of course mistakes happen. Like I'm a sales agent, I could too, I've done mistakes. You know, I've done mistakes as a leader, I've done mistakes everywhere, but you gotta look at is it repetitive, is it every month, is it every two weeks, you're doing the same mistake. So no, I reckon they're really, really focused. When we what I find is when you get to that say March, like March this year to get to the financial year, because it works on financial year, they're really, really focused. Since I've doing it, loss managements and especially just think of it, if I said to you I've got five thousand property managements and we have a preventable loss less of 30 a year, that's I've not heard of any businesses that do it. You know, have it. You know, it's near impossible, especially with that volume. So I think it's working well.

Peter Schravemade (1:12:42)

Yeah, no, it's outstanding. And I'm reading through some of the some of the figures on that article, like the two hundred and forty minute response time from your PMS. That's interesting. What happens at two hundred and forty one? Where did the two hundred and forty minute come from?

Peter Diamantidis (1:12:57)

So how it works is we use a system, and you may have heard a property management system called Ailo. Ailo is a property manager. So again, ahead of PM, Carl, Karl von Regen, he's come up with all this. Like if I said to you, do I know much about the detail on that? No. But apparently it's a figure which Ailo met use a metric around the country on how PM's response back. And we believe that response time is super important because, like anything, I always keep, you know, giving the basic example. Ubers and taxis. You know, if you had to wait 10 minutes for an Uber, you are kicking and screaming, you've cancelled it. It's the same as landlords. If they're waiting for, you know, three or four or five hours for a response or a day, it plays on their mind on why I'm not getting a response back because everything else in life is fast. Why isn't my property manager fast?

Kasey McDonald (1:13:48)

Yeah. Yeah, it's a big thing and it's still the number one reason that landlords move around and find a new property manager and it all comes down to communication.

Peter Schravemade (1:14:00)

It's across every it's across everything. Sales. Like if you're not getting a response out of the salesperson, you gotta go somewhere else or you've got to look at another property. I've reached out to four commercial agents recently and got bupkis. So, you know, I think it's in every customer service industry is that response time. The 600 organic management, is that is that a gate? Like we mentioned what happens when the market's harder. Do you modify the KPIs in order to suit the market that's out there? Or are you are you capable of pulling six hundred organic managements all the time? I know you said it was a big group that you have, but

Peter Diamantidis (1:14:36)

Yeah, well tha that's the thing. When we did originally I think the first time we did it was four hundred and I think they hit like six fifty. And I said, Okay, maybe that's easy. So the first year was like a trial to see how it's all going to work. 'Cause you've got to remember I've just pulled this out of thin air, looked at it all and I You know what, I want to make this competitive But like this year now, it again six hundred, mate, they've hit eleven hundred. Eleven hundred, like You know, we've had one BDM that signed up, I think four hundred and forty eight or forty-seven themselves. So like if you look at it is and this is not like, you know, chasing managements, these are just people walking in the door. So, I again, I if something got harder, like you I can't foresee the future, but if something got really harder, of course I'll always look at this and adjust because you don't want to make it impossible.

Kasey McDonald (1:15:07)

Well.

Peter Diamantidis (1:15:24)

You don't want it like an impossible target that hey If you don't hit a thousand managements, you're not coming. It just it would wouldn't sit well. I want to make something realistic. And if they go beyond which they have this year, you know, they deserve it.

Kasey McDonald (1:15:39)

Yeah. Peter, I'm really loving this. Of course, my background is property management as well. But and yes, I think every many kind of still see property management as the, you know, second cousin over in the corner. But you know, it is your biggest asset, right? And you're managing properties for mom and dad investors who also see that as their biggest asset. And to one of your points earlier, you know, the cost of that trip. And I think your article kind of indicated it's approximately around 50,000. If you actually look at the amount of properties that have been brought into your portfolio and into your business, they're worth more than 50,000. In fact, the revenue you'd be generating is worth more than 50,000. So I think, you know, overall, you know, this is a really great strategy. And it's certainly not going to be for every principal and every business out there, but I think it's a really good point for everyone to start to consider. What's a different way that you can be rewarding your property managers? For many reasons. It's about how do you grow your business, how do you grow your revenue, how do you keep really amazing staff, how do you keep them happy and the culture I think is such an important part. You know, many leave for burnout and because they're not kind of, I guess, feeling special in their roles. So really well done, Peter. I think this is absolutely fantastic. And so great to hear that. A as a sales principal as well, you've really sat down to think about how do I reward my property managers.

Peter Schravemade (1:17:07)

Yeah, I'd love to circle back on this, you know, maybe a year down the track and see how it's still tracking, if that's okay with you, Peter. It if people have questions about this, is there a place that they can go to find details on what you're doing? Are you are you happy to share or

Peter Diamantidis (1:17:24)

You know. Well, so I've always been that person for like I said, being in industry for twenty four years and when I started not knowing anything, I'm happy to share because I believe that, you know, in our industry we need to share ideas and come up with ideas and that's how I've grown, you know, from you know, having, you know, one office to, you know, going nearly on to ten shortly. It's just, you know, growth by, you know, talking to people like yourselves and then and then the audience, and it works you know, I say it works, it comes back around.

Peter Schravemade (1:17:55)

Yeah, fantastic. Thank you, thank you so much for joining us. For the people listening, we'll include any links to Peter and how you can get in contact with him at before the weekend.com. They'll be in the episode description there. Peter, thank you so much for jumping on early and chatting us through this weekend and congratulations to you on a great model.

Peter Diamantidis (1:18:14)

Thank you and have a great weekend.

Kasey McDonald (1:18:16)

Yeah, thanks Peter.

Peter Schravemade (1:18:17)

Thank you. Well, that was Peter Diamantidis of Ray White United. Did do I have that right? Ray White United? Yes. I don't want to attribute him to the wrong Ray White group. A fan that's a fantastic model, Kasey. Like I kind of wish I had that implemented. We always had issues with not just culture but attrition of real estate agents in our property management environment because it's high pressure, high stress. And you do your best to try and maintain these, but that sounds like a I've gotta say, it had the property managers that I'd been responsible for been incentivized to get trips to Bali or Thailand or New Zealand or wherever the heck they're going, Fiji, whatever it is. I reckon that would have been a bit of a deal breaker. And I don't think I'd ever thought about it in the way that Peter Diamantidis has.

Kasey McDonald (1:19:03)

Yeah, no, I agree. I think, you know, many property managers are feeling undervalued. And I, you know, kind of covered that as a part of the questions with Peter. And I think now he's really highlighted that there is a different way. Now metrics come with it and the numbers, they've got to achieve certain targets. And I've got no issue in that. He's saying that, you know, every year he's kind of trialed some different things and tested it based on market conditions as well and the teams. That have been awarded have overachieved in those targets, which I think is amazing. So people are obviously seeing this as a really positive incentive. It's keeping them motivated and enjoying their roles as well. I think that's also important because like you said, it can be really stressful. And some days it can be incredibly challenging in the property management space. And so to know that you've got something to really look forward to and yes, it's a competition, fantastic. But yeah, kudos to him. And his team leader for really kind of diving in and thinking, how do we really improve the way we operate and how can we support our property management business?

Peter Schravemade (1:20:10)

Yeah. And by the way, if you know of any other incentives, like this whole podcast is industry conversations that should be affecting the way that you as a property professional, even a property management buyer's agent, whatever it is. Should be affecting the way that you guys do business. And so if you've seen anything that you think is worth shouting out about, email us hello b at before the weekend dot com. If you've if your boss has some great incentives in play that might dial a needle for you or make a difference to your just the way you feel about your job, your incentive to turn up every day and do this again. We'd love to hear about them. That's a really good news story. Kasey, I'm glad you brought that one to my attention and thanks Again to Peter Diamantidis for jumping online so early this morning from Sydney. Look, we've almost run out of time, but just before we close today, we've got a couple of quick hits to go through. Do you want to take the first one and then we'll go from there and jump in?

Kasey McDonald (1:21:06)

Yeah, obviously we all would have seen through some articles this week that Real is acquiring RE/MAX Australia and they will now become Real RE/MAX group here within the Australian network. And they'll still, you know, r remain as they are. We've still got the Davorens, of course, involved. We love the Davoren boys. Shout out to you both this morning. But settlements expected in the next few weeks. But look out for that change you know, within the industry and what that means for all of those RE/MAX officers.

Peter Schravemade (1:21:41)

Well, I think the real news out this week, because it'd been talked about for some time is that the shareholders had approved it. So it's actually going ahead, which is great. Absolutely. Yeah, definitely. We got a story, McGrath partners with Hodges. So this is Victoria's oldest agency. It was established in eighteen fifty four. My goodness, a hundred and seventy-two years old. Five Bayside offices plus rye. So it's not so much about the deal, it's the timing. So the national network buying into Melbourne the same week that Cotality models Melbourne back to two thousand two sorry two thousand seventeen year values. It's an I it's interesting timing. And like I've got to say, there's a bit of nostalgia. If you're part of an agency that has you know, that kind of history, I don't know how you feel about McGrath taking over, but, you know, at least that heritage can continue on through a new brand. And that's pretty much the same as what we're discussing with Real and RE/MAX. RE/MAX's obviously a an industry recognized title. They constantly finish in the top franchises, the top ten franchises in the world next to things like McDonald's and Google. So, you know, it's a time of change, whichever nation that you're in. What else do we have? Yeah.

Kasey McDonald (1:23:00)

Victorian auction reserve rules. And I think we covered this one of our really early episodes. But the REIV wants the new reserve price disclosure requirements paused. And look, you know, I haven't read this article in detail myself, but I think, you know, potentially, you know, it's really looking at all of the regulations that are coming into play specifically in the state and understanding and I think we've got if we do get some time it'd be great to kind of look at those auction results from Tim's if not we might share them Pete so everyone can have a look at them but I think it's important to understand maybe why the REIV have gone there. For me, there's just too many changes occurring. It's the same as New South Wales, right? With Tim McKibbin coming out saying there's just there's too much. There's all this legislation appearing and regulation coming out. Yeah, and the auction results are a are not at the same kind of levels. And so it's about, yeah.

Peter Schravemade (1:24:00)

Yeah, well this is this is Toby hitting out again. So the first time this happened, we saw the outgoing premier, what was her name? Jacinta Allan was having a crack at Toby. That was one week before she was then gone from the job. And Toby's come out saying, Look, they're asking for a change in when the what is it, the reserve. Price is disclosed. This is what the government's mandating. And Toby's

Kasey McDonald (1:24:23)

Mm-hmm. Mm-hmm.

Peter Schravemade (1:24:25)

Come out and hit back and said we should put this on pause. I effectively think that Victoria has a caretaker government at the moment. I they're all in election mode. They're heading to an election. There shouldn't be any changes that are that are made during this period because it's quite clear that the Labour government there doesn't have the mandate at this stage. That it's their second successive leader who have hasn't been voted in. There is there is a large amount of conjecture to say that. They may not survive this, although it's still a bit of an arm wrestle. And my opinion is it should be a caretaker government with nothing really moved along between here and November. And I know that's difficult, but this is a major change to legislation that affects auction clearance rates. Yeah. So well done to Toby for sticking it to them.

Kasey McDonald (1:25:11)

Yes, I think it's great, right? He's absolutely going. I guess I'll use the word hard, like it's probably the wrong word to use, but like he's going as an advocate for the Victorian real estate industry, in the right way and sort of saying, like, you know, why now? What do we need to do here? This needs to pause. The government's not making these right decisions. So good on you, Toby, for sticking it to them in Victoria.

Peter Schravemade (1:25:38)

Yeah, yeah, exactly. We'll move on to this story. Only eighty seven per cent of forty eight thousand households on the five per cent deposit scheme are in negative equity. So the only eighty seven per cent. But they're saying it's under point two per cent. This is a Queensland outback has a fourteen point two per cent average equity. WA outback has twelve point seven. Look, and I could go through all the numbers. I'm not going to do that today, but it's the REA economist Luc Redman is saying that when it's the market starts to turn, it's going to be these first home buyer regions on price point that turns first. And a lot of them are regional, like there's West Sydney East and suburbs, Melbourne in East. There's WA out back north and there's Queensland out back. These are the areas that are going to turn. And that leads to the next article, which is the WA and regional as the last market standing. Yes. Yeah. Do you want do you want to take on this one?

Kasey McDonald (1:26:37)

Yeah, I think they're looking at the I think regional WA versus where we're at with capital cities is we're looking at a you know 0.1% I guess, down versus 2.5% through the capitals. And then you've got those regional markets are actually up 0.21% across WA and South Australia. So there's a few standouts that have come out in that market, Kalgoorlie, Geraldton, Port Pirie. And then you've got areas like Coffs Harbour, Goulburn and Nelson Bay that are actually falling in those locations. So yeah, is it the sea change? Is the sea change where the pain is, is, you know, inland holding, and it seems to be based on these numbers.

Peter Schravemade (1:27:21)

Yeah, my area is up against all of the others. Admittedly, it doesn't take much to do that. I'm in a suburb with only five hundred people and it two sales might make the difference. But it's funny. A lot of the you and you've raised this before, a lot when we talk about the Australian market. Is directed at Sydney and Melbourne and there are so many other areas. And it'll so if you're again feel free to give us the feedback. If you've got a story that you want to write in for us to talk about in your particular area, you might be going, look, I listened to your podcast and this is a absolute garbage. Everything's happening fine here. So nothing to see

Kasey McDonald (1:27:57)

Ha.

Peter Schravemade (1:27:58)

Nothing to see. I don't know what you guys are talking about. The here this is a pretty good news story just to end with just before we close out. There is First National Byron Bay, Chris Hanley, is posted his best year and in what he's terming is one of the hardest markets in memory. He says that there's three market types headwind, tailwind, no wind. And most businesses are still talking to sellers as if a tailwind will move the stock. But I guess he's kind of saying that there's a no wind at the moment. This is the market. So he's saying that he did the best. And I think that points really, really well to tie this all back in. We've spoken a lot today about buyer's agents falling through the cracks. We're we've had Peter Diamantidis talking about incentives for property managers. We know how property managers are under the pump. It's only been a week since you were you're in Sydney and you were reporting back to me that everything's flat and I've heard that as well. You know it is very much a no-wind market. There's not much happening on the horizon. And to take us all the way back to what the legendary Tim Lawless said is he mentioned we were entering a period where the professional was going to stand out in more ways than just one. And if you're listening to this podcast, if you're a property professional, it's about getting back to the basics. It's doing the consistent things that prove that you are the actual operator in the suburb, not just the flyby night that has turned up to make a quick buck and then the market's not moving and you're going to go again. There's a real opportunity to embed your business, you know, not just now, but you know, for further into the future. And I think a lot of people, you know, like that first national office know that, like Peter Diamantidis. I don't think they're fly by nighters that are that are just in here. So really happy to have some of the great operators on the industry on this program talking about what they do in order to help you guys as property professionals move forward.

Kasey McDonald (1:29:56)

Yeah, absolutely. I think, you know, as the market shifts, we have to shift the way we operate and work. And you know, there's lots of mergers also coming into play. I'm seeing that across our industry. You know, some of the smaller businesses are merging into bigger businesses and some sales agents who have gotten into real estate when times were fantastic, are now kind of moving away from the industry or kind of going, how do I kind of negotiate some of these deals or what does prospecting look like for me? Because they haven't needed to do it because the market has allowed for that behavior. So, you know, Tim made a valid point, I think, in like episode two or three, right? About how, what this is going to mean for us. And so he was on the mark, wasn't he? Yeah, dear friend Tim.

Peter Schravemade (1:30:42)

He was he was dead set. It's been a been a hallmark of the last ten episodes prior to now. But hey, look, if you're if you're joining us, it's Friday, the twenty first of August. I really hope that you're you've had a great week and you're gearing up towards a weekend of prosperity ahead. It's been so great to have you on before the weekend.com. That is our website. If you need to go there, don't forget you can email us at hello at before the weekend.com. You can find anything or subscribe to anything to this podcast almost anywhere. So on your on your favorite channel, if you go to beforeTheWeekend.com and look at episodes, there's plenty of buttons to click on there that will allow you to sign up. But thank you for joining us on another Friday, yet another Friday. Kasey and I are delighted to have you with us and listening to us in our humble podcast, which is growing, by the way, episode 15. We have more than a hundred subscribers to this now, which is early days, pretty happy with that growth. Again, we'd love to hear from you. If there's anything that you think we should be doing or talking about or people that we should be talking to, hit us up. But Kasey, thank you for joining me again on another Friday. I'm sorry about the consistency.

Kasey McDonald (1:31:52)

No, thanks, Pete. It's always a pleasure to co-host this podcast with you. Hey,

Peter Schravemade (1:31:58)

You can tell them what that they know that you're lying.

Kasey McDonald (1:32:02)

Smiling as I say that, right? Yeah, no. But to thank you to everyone listening to Pete's Point. You know, we brought this together for you in our industry to talk about what matters. So if you do have a story for us or if you there is a guest that you think that we should be talking to, please absolutely let us know. Happy selling, happy leasing across the weekend and whatever it is that you're up to, stay safe and enjoy it. And that's a wrap from us on before the weekend.

Peter Schravemade (1:32:32)

Chow.