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(generated from captions) Hello, I'm Peter Switzer - Welcome to the program which puts you in touch with the best and brightest minds in business. We are broadcasting from Melbourne tonight. We will look at what is going on with earnings season in the US going US and here, on a day when Telstra dropped nearly 4%, dropped nearly 4%, all
dropped nearly 4%, all will rate the stock, is a dividend cut coming up? We find up wide women have a black spot when it comes to super, and where are the wealthy investing nowadays? David Salmond will tell us, particularly -- David Salmond will tell us. Louis Christopher will tell us his update on his very bullish call on home prices. tell us his update on his very
bullish call on home prices. Let's talk to Paul Rickard my colleague, at switch to super report who wrote a very interesting article on Telstra, interesting to know whether Telstra will cut the dividend this year or next or maybe never. Thank you to joining us. A lot of so-called experts out there are telling us that this dividend of Telstra is going to be cut pretty soon. Do you expect that was behind the sell-off today?I think it was a bit to do that. As Telstra gets towards its presentation of its 4-year results on the 17 August, sorry the 15 August. And also potentially the outcome of its capital review. What Telstra has been telling the market for almost 12 months now is it will look very carefully at it capital allocation policy, in other words what gives out to shareholders, as dividends, its balance sheet and how much potentially it might do in things like off market buybacks, they have been liaising with shareholders over the last 612 months, and it is due to announce that at some stage. The market expects to happen its annual results. I think the first tip we will see is whether dividend will be cut, it may not be cut this year but Telstra will save what it is likely to do in the coming years. You actually look at a number of analysts, and was at only two out of eight thought the cup was coming, and the other six didn't think so? Of the major brokers I think it is fair to say that six basically expected the dividend this year to be unchanged, two were expecting a cut probably more to happen in financial year 2018, and those were looking at a cut from 31 cents down to 25 cents, but if you were going to talk to those same analysts who projected a couple of years out, they would certainly not rule out a cut in later years. I think we will see more market talk, certainly a lot of fund managers are of the opinion that Telstra probably should cut its dividend, and make it a little bit more sustainable as it goes through what many have described as sort of the NBN crunch. I am trying to work out whether $4 22 or a little bit lower might be a good lie in price. A lot of the fund managers said to me that when they cut the dividend cover the share price will actually go up, it happened with BHP, do you think we can just carry the BHP story over to Telstra?I think BHP was a little different, although I am sure there will be a bit of a carryover, I think BHP, a number of people said this is not sustainable, simply because you cannot control the market cycle for resources, there for having a progressive dividend policy does not make any sense, particularly when you have no control over the output. In other words the pricey actually get the iron ore or your oil or whatever. To stretch it a bit different, you have a more critical revenue stream, so it has a slightly different case to argue. The problem to Telstra of course is that earnings are not going up, and if anything Telstra has told the market that the cause of the conversion over to the NBN, it faces what it calls an earnings crunch, somewhere in up to FY 22 and it predicts that to the order of two million dollars to $3 million. In other words the impact of the NBN will impact Telstra by about $2 billion in about five to six years time. And that actually gets worse over the next two years. That is the difference with Telstra, although I think some of the BHP relief story would also make a case, in other words the market would say that Telstra is responding to the feedback from shareholders and analysts and actually getting its capital position in order. So maybe a relief rally could be partly on the cards will stop but Paul, if the NBN.-- if the Indian relationship relationship petered out over time, won't Telstra have an opportunity to cut costs as well at the same time? That is part of the plan, Peta, so what Telstra has said it is they face an earnings whole of 2- $3 billion, and they have programmed to address that, a just do not have the chance to update the market on how the program is going. And that has three essential components, there are $100 million from property savings, they say they are pretty certain to be able to bank, also there are more plans to invest in the network and that includes investment in so-called customer service businesses, and it expects to generate about another $500 million from a combination of both cost and potentially revenue initiatives, but that still leaves a gap of somewhere between $0.8 billion and $1.8 billion and the market are still waiting to hear how Telstra will address that. That could be out of new revenue and new businesses, but Telstra does not have a great record of developing new revenue streams, and certainly in its first half-year result, revenue was down a fraction. It is very hard to Telstra to say it can automatically plug revenue gap. Going back to the cost savings, or do harder? Probably, but is it hard for outsiders to actually say that, and I guess Telstra will lead to tell that to the market, to say it has a plan to address the so-called earnings hole.Do you think Telstra has a dinosaur problem, Paul, is kind of big and slow, and they allow all is little competitors to eat away at parts of the market, when you would think they would be in a business to nuke a lot of these small players write off the face of the earth?I think most commentators would probably say Telstra does have a bit of a dinosaur problem, Peter. I think Telstra's strategic plan for many years has been telling us how it is going to be both a world-class technology company and also a world-class customer service company. And I guess if you spoke to a lot of Telstra customers they probably wouldn't agree. So I think Telstra faces the basic challenge from being transforming from essentially a wholesale provider of services, with a monopoly position, into becoming very nimble retailer rose in the mobile and broadband space with the NBN, but also being able to innovate from a technology site, and so far it really has not been able to convince the market do that.Looking at the arrivals, TPG and others, they are struggling as well. Are they vulnerable to Telstra just serving up to them with substantial price discounting?I think that is possible, Peter, but I'm not sure of Telstra sees the threat from TPG and Vocus, but Vodafone and Optus, who took their eye off the ball on the investment side, 3-5 years ago, have been investing a lot more in the resilience of their networks, so in the mobile space while Telstra certainly still has the best reach and if you want to go to any parts of rural Australia it is almost a given that you have to have Telstra providing your coverage, certainly the capability of both the Vodafone and Optus networks have improved. So I'm not sure Optus has -- I am not sure Telstra has such a commanding position in mobiles that it had two years ago. If Vocus and DVD set out going to build -- TPG said they would build their own mobile network, they have set aside only $3 billion, but that could cause Telstra some problems in the future as well.You said that if the dividend fell from 31 cents down to 25 cents, based on $4 25 share price with the yield of 5.9%, if it goes to 20 cents it goes to 4.7. What is your best guess on what the dividend would be cut by?I am probably with the analyst who said 25 cents. One of the analyst at city Max said it would properly be -- city Max said it would partly be 25 cents, Telstra's cash flow is probably what it could do, and down towards that level it is open to get attractive. We are probably not quite there, at a price of $4 25, and 25 cents dividend, that is a yield of 5.9%, and you throw in the benefit of franking, but if Telstra is a zero growth zero increase in revenue proposition, I am not sure that is quite attractive enough for some of the players out there. So my guess is we are going to probably see more talk about dividend cuts in the coming month or so, and maybe in that environment it will be hard to the Telstra share price to rally too far.I'll only you off the hook, is Telstra buying $4 22 or $4.I am more in the $4 category, I would like to see both the announcement of the capital review, and I would also like to see their 4-year results because their first half was a little disappointing, we saw negative revenue growth, and if Telstra has actually been able to do something turnaround, maybe the costs, better work on the costs at that has been saying, maybe it has a bit more market share, maybe the market can re- rated, but I think it is unlikely you are going to see a rerating in the next four weeks, but around that $4, $4 10 level, I think Telstra looks like it is in nimble territory.If anyone wants to check out Paul's analysis, just go to switch to super report, put in regard and you will probably get the Telstra story as well. -- regard. Our next story involves a question around women having trouble with super, and to tell us all about that we have Ross Clare from the Association of superannuation funds of Australia, thank you for joining us. Ross, Kenny Hinkley?I can hear you. Fantastic. -- Ross, can you hear me.We know women are fantastic managers of their household budgets, that you guys are saying that maybe they have a problem when it comes to superannuation?I think superannuation is challenging for many people, both women and men, research surveying the Australia population late last year shows that there is a lower level engagement by many Australian women on a number of key indicators such as... Their superannuation fund, tracking what is happening with their superannuation, reading the documents, levels of engagement seemed to be about half the level of man. And that can get -- give rise to some real negative outcomes over the longer term, because without that engagement, people won't necessarily make the right decisions in number of areas.Have you seen any difference in the attitude, I guess the aptitude towards super as women get aggressively older?One of the things that drives a lot of engagement in super is impending retirement, and we have a higher superannuation balance -- increasingly older. As people get older they get more engaged, those are drivers there, but the disadvantage of not acting earlier is the compound investment benefits are that the people. And also if you have been running too many accounts were too long, that is a problem. If we can get more people, especially women, engaging earlier, than they can have a look at how many superannuation account they have, they can go on to myGov, it is quite easy to see every account you have for an individual, if you have accounts that you don't need, you can consolidate them into your active account. It's also a good idea for women and men to check on their insurance cover, it may be more than they need, but on the other hand it may be insufficient for their family situation. Another thing to look at is the investment option, for someone with many years to go to retirement, being in a more aggressive growth option might be the way to go. All of those things are good for individuals to look at. How important is the differences in pay scales between men and women? In the early stages, you made the point that the quicker you get into super, the more you start building it up, the better it is, the pay scale is different, does that explain why women's superannuation balances are smaller than men in their 40s and 50s?There are many factors contributing to the different outcomes, one of them is the pay scale, many women are in industries and roles which historically have been receiving less pay than men, there is also time out of the paid labour force, and it would be a good thing if superannuation was paid along with paid parental leave, that is something we have been lobbying for. All women affect that by the $450 month threshold before superannuation guarantee contributions are made, so those factors are contributing to the different outcomes. But many people, couples as they approach retirement, and earlier during their life, so it often can be a joint decision how much to contribute, with lower contribution caps it can make sense for a couple to have a look at their situation, and for a woman to make use of any unused concessional contribution cap, that is one of the advantages of having a lower wage, lower compulsory contribution. It's not much of an advantage, but the couple can in effect share there two contribution caps. So that is a good family decision to make, both people in a couple engaging with their superannuation, or king at the tax concession and seeing what they might be able to afford. I suspect a young couple being married would be a bigger help to superannuation than being unmarried. Is anybody out there really doing anything to make women more interested in superannuation? Is anybody trying to link Kim Kardashian to superannuation to make the whole thing more sexy.It would be a real challenge to make superannuation sexy. That might be asking too much. We do have our Super Booster day coming up and we have launched a campaign in regards to that, to encourage people to look at our soup emulation. We have been doing that with another media organisation which has a number of titles particularly directed towards women. There is a number of funds actually very much involved in the work place more generally, targeting their material at the circumstances of women. I do not think you necessarily have to make it sexy, but you have to make it relevant, important, understandable, and that is where the industry organisations such as my own are starting to do more to help without engagement. I think people know what they have to do, but they want the information on the tools to help them do it.OK, well, I have to say, given what I see young women reading all the time, I think making it super sexy might be a really good idea. Thanks for joining us.It has been a pleasure speaking to you this evening.That was Ross Clare from the Association of Superannuation Funds of Australia. Coming up, we are speaking to Michael Knox about earnings seasons here in the USA -- year and in the USA. And we will be speaking about where high net worth individuals put their money these days.

Welcome back. Reporting is season has started in the USA. US banks reported very well on Friday. We begin in August. The big question is, will earnings season be a ripper in Australia and the US? A man who has his finger on the pulse of earnings is Morgans chief economist Michael Knox. Hello, Michael.Hello. You are of course Mr Morgans to me. Tell us, let's begin with the USA, what are you expecting with earnings season?Well, it is kind of interesting in this last year. Every time there was an earnings season there was another round of disappointment. What has been happening since the middle of last year is that earnings have been coming in pretty much where they were expected to 3-month forehand. That is what is happening. Only five cent reported for the second quarter. -- 5%. But it is coming in very close to what was anticipated. We have had a significant improvement in earnings in the United States since last year. On a 12 month rolling operated earnings per share, in the middle of this time last year that was $98 per share. That has risen up, including their reporting for the second quarter for this year, to $116 per share. Now, the single biggest chunk of that is technology earnings. 22% of that is technology earnings. That is expected to grow to 25 cent by the end of the year. -- 25%. By the end of next year, operating earnings are expected to be $146 per share. So we have continuous growth in earnings and earnings announcements are coming in pretty much in line with the forecast three months beforehand.The Dow and the S&P 500 are in record territory 's. Has the US market got ahead of itself, or is it pretty well responding to what earnings are likely to do?Well, in the grand old way of stock markets, yes, of course it has got ahead of itself. I think the difference between the Australian market and the US market is that in Australia, investors receive most of their return in terms of fully franked dividends. So we tend to trade pretty much where you would expect, relative to earnings per share and volume. A touch higher, but not much. In the United States they have a concessional rate of capital gains tax, the same as we do, but in the US for the corporate city is about 15%. So most of the return is received in terms of capital gains. So US stock markets tend to overshoot to a far greater degree than Australian stock markets. We make fair value at the moment from the S&P 500, about which 100 points, and we make it at about the end of next year at about 2450. So right now, the S&P 500 is trailing at what fair value would react the end of next you. -- trading. So there is a great deal of anticipation that is going to stay positive in the US market as long as earnings momentum is positive. When we get from 2018 into 2019, we think those earnings might roll over and we might be in trouble then, in late 2018 or early 2019, but not before then. If you look at our own earnings season... That is what I was going to say, let's go to the local earnings season.Sure, sure. What is anticipated is that... Uh, earnings per share, operated earnings per share in Australia, by the time we get the earnings announcements through the earnings season we are about to see, we will have gone up about 13.5% for the financial year we just emerged from. And right now we make fair value of the ASX 200 the for the earnings season. We make it 56 .6%. That incorporates a bit of the earnings we have in April and May. After this earnings season, that kicks up to about 5870. Next year, earnings are expected to grow at about half the rate of the financial year that just passed. Therefore we get above 6000, to a fair value of about 60 to 70, or thereabouts. So, our market is going up, but our market is far closer to what the fundamentals of earnings per share and volume should suggest, is the correct fair value.Going back to the US for a second, if Trump should get his tax reform through, and I kind of expect they will try to do it before the midterm elections, will that change your calculations on earnings and where the S&P 500 should be?Well... Well, the consensus estimates for operated earnings per share do not include those tax cuts. So if you get, uh, corporate tax cuts through by next -- the first quarter of next year, and it is very reasonable to expect that is going to happen, then there would be further upward revision in those estimates for operated earnings per share in the calendar year 2018. I cannot tell you what they our, because it hasn't happened yet. -- are, because. We can update that forecast when the legislation passes.You know that I am a man who likes to look at blue skies. That was the reasoning behind that question. Let's go back to Australia. One problem for some of our companies is the rising Aussie dollar. Now, what is your expectation for the Aussie dollar. Let's get the answer on that one first. Where is this dollar heading? Well, we have been saying all year we thought the fair value for the early dollar was 75 cents and a bit. There is a standard error to the model. It has to go up 79 and a bit since the floor it is overvalued at a statistically acceptable level. -- and a bit cents. It has to go under 71 cents before it is at a statistically acceptable level. I think it trading sideways in that range. Now, some technical analysis that I have read, well, that I have read in the last day, says that it could peak in this cycle between 79 cents and 82 cents. Or what actually happens is that unless there is a major structural trend happening like a couple of years ago when we talked about the decline of the US budget deficit and how the US budget deficit fell from 7.5% of GDP to 2.5% of GDP, and we said that would make the US dollar go up and the Australian dollar down, and that is kind of what happened, right now those kinds of structural forces are not acting. The US budget deficit is going sideways at about 2.5% of GDP. In fact, it has to do that for the Republican Party to have its, both its health-care bill, and its taxation bill, passed as reconciliation deals. A bill that can be passed with a simple majority in the Senate. They have 52 senators, so they can pass that. If those bills go through and do not change the budget deficit, then they can and get it passed. Apart from that, it is true that the Federal Reserve is tightening and the Reserve Bank of Australia isn't. But that tightening is that such a slow pace that a whole lot of things like the improvement of the European economy can overwhelm them. I think what is really happening now is that you have got to consider the many years of nothing happening in the European economy, we have seen a resurgence of investment in Europe, that means that money that was invested by Europeans in the United States is being brought back and invested in Europe, which is pushing up the euro and pushing down the US dollar, and it is those capital flows of a falling US dollar generally and a rising euro which are pushing the Aussie dollar up. We are going up with the euro, effectively. OK, we are out of time, mate. As always, thank you for joining us. I hope your prognostication low is right, except the Aussie dollar. I would like to be lower than we are currently seeing. Coming up after the break we will find out where high net worth investors are putting their money since the super changes with David Sam at from Citi.

Welcome back. The budget introduced superannuation changes, and as a consequence lots of investors, including high net worth investors have been looking at alternatives to see where they should be putting their money. David that to the back David Zammit has been looking at this subject come and hears from Citi Australia. What superannuation changes in particular have had an impact on the way high net worth investors are investing their money?There are probably two key areas where we have seen of this changes for our clients, there have been changes around the concessional and non- concessional contributions into super, so the amount of money people put into super every year has radically decreased, and at the other end, we have the 1.6 million dollar cap for the pension clients, whether tax won't apply. The areas where they are causing the most out of change, and given these areas are designed for those clients to be paying more tax in that space, that Ben has implications for those clients in terms of their aftertax returns. The aftertax returns have obviously going to be getting lower because of this changes so clients are we looking for alternatives to make up the difference that they would otherwise have received.A lot of people sort of surprised that what they planned to do many years ago, now in many ways have been frustrated?I think it is always a hot topic when you are talking about tax and in particular people 's nest eggs for retirement, but I think the expectation of the last few years was that super wasn't going to be touched into many ways and given their having multiple changes over the last few years, that has caused a great degree of frustration to that Macs are quite difficult for clients to plan for decades at a time, which obviously super requires.Let's imagine you have already hit the $1.6 million cap, you are still in your 50s, you have some working time ahead of you, your compulsory super is going to go into an accumulation fund, right?Yeah there are multiple different options at a lot of our clients are in a position, shifting money back into the accumulation fund also looking at exploring other alternatives such as setting up companies, setting up trusts, obviously depending on the client' circumstance will dictate with a end up going, but the money will need to be pushed into another vehicle.They are entitled to put non- concessional contributions into as accumulations, aren't they? There is no limit on that, they will pay 15% on earnings?To 15% tax will be paid on earnings, that's correct. Clients will look for, as I said, ways to either shift that out of that environment, or alternatively will look for ways to get a higher rate of return than what they otherwise would be looking at.Tell us how an investment company would operate and be beneficial for someone who feels as though the $1.6 million cap has frustrated them in terms of their plans the future?We are seeing some clients looking at setting up companies, because as there are benefits to a small business in that space, to drive that lower tax rate, and in particular it enables in a lot of cases the holdings of the investments that they can put inside that vehicle. We are starting to see in particular of income driven -based investments in that space. What about trusts, a lot more people are looking at using trusts for their investments?Trusts have obviously been an area where a lot of clients are focused on over the years, but as the changes to come into effect, it has put that more in focus if you like. Because the complexities around how those would be managed and the different avenues in that space.Do you suspect as a consequence of these changes are we are going to see the growth of family officers?I think a consequence of the changes is that a lot of clients are looking for more alternatives, so it comes back to how do I deny that aftertax return, so many clients who previously were happy sitting in cash, or basing in the equity portfolios are looking for all 20 -- alternatives to generating that aftertax return. We are sucked to see a big focus on client shifting from cash into fixed income in particular, and a lot of offshore and US denominated fixed-income in particular. We are starting to see clients looking to develop their own portfolios at Simla to a family office style where they are creating their own structures for their investments, rather than buying off-the-shelf investments or just investing directly into the equity market or into cash, they are looking to try and structure of investments that can be tailored in terms of their returns and exposures, so that they can plan over the next 5- 10, 15 years for their retirement.I know you have some work done on high net worth investors from overseas, looking at Australian property, is that still the case?Over the years there have been significant numbers of migrants coming into Australia and that certainly hasn't changed, and I think one of the key attributes for those migrants, the first thing they will look to do is set themselves up with property, we are also seeing the huge boom in education as well, so a lot of clients coming in, particularly from Asia, to get access to the high quality of education in Australia, and that will obviously mean continued growth in the way that they buy their property, and also the investments that they do locally, and having such a highly regulated market in Australia in comparison to some of the markets that many of these migrants may be coming from, that gives them a great degree of comfort in that space.Are there any other developments or trends that have come as a consequence of the super changes? Probably the biggest development that we are seeing is in the past, local clients in particular have had a very basic view of their investments, and what they can get access to. So typically we see cash exposure, and a significant portion in property and equities, and over time what we are starting to see is quite a big shift in that space which is more akin to what we see in Asia and in the US, where many of those clients are more heavily weighed into fixed income in particular, and also in the alternative space. Because of the fact we have such a go -- low yielding environment in Australia, and the rest of the world has been a a longer period of time, we are far to see that transition, that the rest of the world went through a few years ago. So as the yields start is to get compressed on cash and that is likely to continue further over the next 12-18 months, as we start to see the property prices starting to hit levels of people getting uncomfortable, is there a Crush or is there a downturn in the forward equity markets, they have been volatile over the past few months, and years, and that is creating concern are around having such a large equity portfolio. Plans are looking for something else in that space. -- clients. We are suddenly see a significant portion of our clients that space looking for more conservative fixed income, also looking to tailor exposures that are more suited to them in particular, rather than just buying directly off-the-shelf, in that equity space. As you know, as governments change the rules, investors go looking for exotic and alternatives, and that is good for financial planners and accountants and tax lawyers.Thank you for joining us on the show. Coming up after the break, we will be looking at what is going on in the property sector. Our property prices on the way down, or are we just taking a breather? Louis Christopher from SQM Research Jones is after the break. -- joins us.

Welcome back. Lewis Christopher was that the bullish call lot of the year, telling us house prices were going to rise I double-digit amounts. That was when people were tipping much smaller rise or even a fall in house prices. Lately UBS thinks the property boom is over. I want to see what Louis thinks. Thanks for joining us.Good to be here.Are you still will wish on home prices?Yes and no. It is a mixed market, no question. I think the moves by the bank to restrict investor lending have had something of an impact on the market, particularly in the month of June, when we saw lower auction clearance rates. The question now, particularly for the east coast and Sydney and Melbourne, is whether the new concessions which have kicked in for first-time buyers will affect the market base. Right now we are watching the auction clearance rates closely. They have firmed up slightly in the last few weeks. I'm not so sure whether we can put this housing boom into the Senate Eric quite yet.-- Cemetery. I think UBS is predicting that actual home building, something like 250,000 units built last year, will come down to about 170,000. If that happens, is that a substantial bust, or is it an orderly correction? Well, it is a correction in construction, which raises its own concerns. Let's remember, this time last year, the Reserve Bank of Australia came out and said they were worried about an oversupply of apartments in Brisbane, Sydney and Melbourne. What has actually played out is that we have only had the oversupply in Brisbane. Why haven't we had it in Sydney and Melbourne? That is because we have had far greater than expected population growth, absorbing or taking up all of that stock that everybody was concerned about. Now we are having a situation where completions are about to peak and actually go into a trough. On that part, I do agree with the research, completions are going to fall. Yet we are still recording vacancy rates for most capital cities of about 2%. You tell me what is going to happen to rents in about 18 months time, assuming this population growth rate we are still having keeps going. All of those warnings, I must admit, I kept asking myself the question in Sydney and in Melbourne, you know, if the prices come down even just a little bit, there are going to be people who look at that and say, well, Docklands Apartments are not all that bad, and Sydney apartments are still pretty attractive. Brisbane was always a bit of a question, and we will talk about that in a moment. All these warnings, do you think some developers actually pulled the pin on actually producing complexes, and that also helped the situation. Yes, I do believe that. In fact, we have had further evidence -- firm evidence that developers pulled back on projects because they didn't have that much investor demand, or they were fearful they would not have enough investor demand. So to an extent there have been a number of projects which have actually cancelled.So do you think they may start coming online as a consequence of the fact that Sydney and Melbourne have not had a serious apartments supply problem?I am not sure whether they will come back online yet. I think the developers will wait until the banks quietly loosen up in -- loosen up lending again for investors. Just remember, we always see the media releases from the bank saying that they are tidying up credit to investors, but you can never settle reverse a policy. They tend to do it quietly. That may well happen once we see the banks get their books in order regarding investor credit. I might just add on this point, very quickly, we know that Apra has been very aggressive towards the banks on the quiet. -- APRA. They are actually visiting bank headquarters once per quarter and are literally going through the banks' looks down to a locality level. So this has not really been announced, but it is actually happening, that APRA has become even more aggressive. That might mean we see even less investors in the marketplace come the second half of the year.Tell us about Brisbane. Lots of experts think of Lisbon as an area -- Brisbane as an area has potential. Lots of them thought that apartments around the River area were a problem. Are they?Yes. When we look at vacancy rates, we are recording Brisbane CBD vacancy rates of about five cents. It has been trending higher and we are recording rental falls. The Brisbane CBD is now about as bad as what it is in the Perth CBD market. So we are pretty bearish about the Brisbane marketplace. Developers are offering more and more discounts and bargains but you have to be careful about whether that is really a bargain or not. Not just throwing in a new car to buy an apartment. You have to be careful about that, as a buyer.Is there any discrimination between Brisbane apartments that are a worrying investments commodity, as opposed to some apartments which, in the area, are actually good value.Well, outside the CBD apartment market, and the inner ring apartment market, when we look at freestanding houses in Brisbane, we see more straight. There is more demand for freestanding houses, particularly on the east side of 's been and the outer ring of Brisbane, where affordable housing is still in demand. So we are seeing some strain. But overall Brisbane is still a relatively soft market compare to Melbourne or Sydney.Are you seeing any improvement in Perth? Not at this stage. We were thinking earlier this year we may well see that what second half of this year based on a rebound in commodity prices, but you may recall that iron ore has definitely slipped away again in the second quarter. I think that has delayed the recovery somewhat for Perth. We are still recording vacancy rates in excess of 5% for that city, and not seeing a bottom at this point in time.SA? Adelaide, G, hard to talk much about Adelaide. It is a bit of a flat market. I would say that there is value to be had in SA. I would like to see an improving economy before we could be more bullish in Adelaide. Our forecast in Adelaide remains the same, we had it at about 2- 4% capital growth for this year, if I recall correctly.Great to catch up.Good to be here.That was Lewis Christopher from SQ M research. That is the show for tonight. Thanks for joining us. Have a great night.

This program is live captioned by Ericsson Access Services. Hello and thanks fortuning in to your Monday night edition of Your Money, Your Call. I'm Margaret Lomas. Joining me on the program