Albo and Chalmers don't have the guts to say this (but I will)
Here’s what Albo and Chalmers don’t have the guts to say (but I will):
House prices are falling, and that’s a good thing.
For anyone under 40 who’s given up on ever owning a home, this is the best news since your dad stopped emailing you the auction results with “food for thought” in the subject line.
Yet for a real estate agent with an Audi lease, it’s the end of the world.
Heck, if you listen to the property industry you’d think the sky was falling.
“Worst auction day in 30 years!”
“Property panic!”
“Sharpest correction in 40 years!”
So … let’s check the scoreboard.
Over the June quarter, prices across the combined capitals slipped by just 2.5 per cent. Over the past year they’re still up 3.9 per cent, according to Cotality.
What is true is that at the moment, the market is colder than a mother-in-law’s kiss.
And if prices were to fall 10 per cent ... they’d still only be back to where they were in late 2024.
Some perspective you don’t get from the outraged:
Average house prices have increased by more than 400 per cent since 2000, partly on the back of taxpayer-funded landlord welfare. They’ve grown much faster than workers wages. Which is why we’re in this pickle.
My view?
This is a correction we’ve needed for 20 years.
The government set out to make property investing less attractive, and they get the gold star.
For a new property investor, the income is less than they’d get on a savings account. The only way the sums ever worked long-term was the price going up at a constant clip. Take that away and you’re volunteering to fix someone else’s dishwasher at 9pm on a Sunday.
And the public (as usual) is streets ahead of the politicians here. A Resolve poll found 61 per cent want prices to fall. Yes, even homeowners. Which sounds kind of mad, a couple hoping their biggest asset drops in value … until you clock the 28-year-old still asleep in the back bedroom.
Somewhere along the way we started treating houses like a share price. Something to check, brag about, and borrow against. We forgot what they’re actually for.
A house is for living in.
So when the news runs around with its hair on fire about “the crash”, look at who’s actually panicking.
It’s not the young couple who might finally get a foot in the door.
It’s the bloke with the Audi lease.
Let him sweat.
Tread Your Own Path!
Your Questions & Answers
My Babies’ Daddy Just Dropped a BOMB
Barefoot Business Buckets?
Don’t Skip This One
My Babies’ Daddy Just Dropped a BOMB
Scott,
I’m six months pregnant with my first babies (twins!) and about to stop work. Over several years I’ve saved $50k with zero debt, all while working part time and studying full time to change careers.
I’ve been with my partner for eight years (we’re unmarried). We’ve always kept finances separate. He’s a doctor who’s earned good money the whole time. He has expensive hobbies but has never been flashy with possessions (we both drive 10-year-old bombs), so I assumed he was solid. He always told me he was putting money into savings. Three months ago his contract ended. He’s made almost no effort to find another job. Says he needs a break before the babies, even though I’ve begged him to work before we’re down to one income.
Tonight he dropped the bomb: he has no savings at all, and is $20k in credit card debt. I was blindsided. Do I help him pay it off? Or does that just enable him? Or do I walk, so my hard-earned money goes to my kids’ future instead? Please help me.
Jane
Hi Jane
You’re six months pregnant with twins and the floor just shifted under you.
Of course you’re bloody stressed!
Look, the debt isn’t the real problem. That’s just the symptom.
Twenty grand on a credit card isn’t the end of the world for a bloke who’s been on a doctor’s wage. It’s months of grinding, not a life sentence.
The real disease is his lying.
Jane, he’s doing something he’s ashamed of. That’s why he looked you in the eye while you were carrying his twins and told you he had savings.
This bloke is a doctor.
He delivers uncomfortable news to frightened people every single day of his working life. He knows his patients won’t heal until they face up to the actions that got them into his room. Now he needs to sit on the other side of the desk and hear it.
So here’s what I’d do.
Book a relationship counsellor and put every last thing on the table. The debt, the lie, the job, the fear.
And then you build. Together. Set up your buckets, put date nights in the calendar, and start from the truth instead of the lie. The money will sort itself out. It always does when two smart people decide to face it head-on.
He’s obviously bright. He’s got three very important people counting on him now.
I reckon he’s up to it.
Barefoot Business Buckets?
Hey Scott,
I’m 18 and just starting a small painting company. I grew up on a farm 200kms from the nearest internet tower. Mum had us reading your book at age 10, and we’d chuck our market cash into old Jalna yoghurt buckets. Thanks to your book I’ve already got all the personal buckets sorted (Mojo, Fire Extinguisher, the lot). Now I need a simple way to split the business money so I can support my family, keep growing the business, and still have a life. Any advice on business buckets?
Sam
Hey Sam
Let me paint you a very bad picture.
Running a small business is one of the most dangerous things you can do with money. Most people go broke. Even the ones who are busy, earning good dough, and look like they’re killing it.
Why? Because they don’t pay the two most important people first.
When you own a business you’re in bed with two bosses: the Australian Taxation Office (Canberra’s bagmen) and yourself.
Most owners pay suppliers, wages, fuel, paint and the fancy new compressor first, then hope there’s something left for tax and their family. There never is. That’s how good businesses die.
So we flip it.
You’ve already built your personal buckets. Now build a second set for the business and keep them completely separate. Different accounts. Different worlds. Mixing the two is like still sharing a bunk with your brother at 18. You’re past that.
Every time money hits the business account, move it straight away. Tip 40% into a Tax bucket — you’re just the bagman and that money was never yours. Take a fixed cut into an Owner’s Pay bucket, because that’s how you actually get paid and feed the family. And skim a small Mojo buffer so a snapped ladder or dead ute clutch doesn’t sink you. What’s left is all you can spend running the business.
No credit. Ever. Borrow money to paint houses and you’ll spend more time huffing the fumes than spreading the paint.
After a solid year, if the business still can’t pay you what you’d earn working for someone else, you don’t have a business. You’ve got an expensive hobby. Park it, get a job, keep your buckets humming, and try again later.
Pay the two most important people first. Everything else comes second. Any kid who grew up stuffing market cash into yoghurt buckets is already streets ahead. You’re going to be fine.
Don’t Skip This One
Hi Scott
Just a quick note to say thank you. I read your book more than 10 years ago and changed my income protection insurance from the default two years to until age 65. I forgot I did it and it was the best surprise to find that I had that insurance backup after my brain injury in 2024. I don’t know what my employment prospects will be in the future so it is hugely reassuring to know that my super plus 75% of my pre-injury income is taken care of for more than 20 years.
Paul
Hey Paul
Insurance is soooo boring.
It’s not sexy like buying shares, or property, or bashing Albo, Jimbo or … the other guy.
You made one decision a decade ago, and when you were at your most vulnerable, it changed everything for your family.
Proud of you.
Thanks for reading,
Scott.