Managing Director Ilya Melnikoff shares his view on the 60 Minutes segment featuring Tim Gurner and Harry Triguboff

One of the greatest US presidents John Kennedy once famously said that it’s not what your country can do for you, but what you can do for your country. Both the US and Australia have been built by immigrants, people who for the most part came with nothing. But a select few decided to make something of themselves,  they worked day and night, they took risks and they created economies in both of our countries. These people were the Harry and Tim Gurner of their time.

Lets say that even if in their case their father or grandfather gave them something small to start with, what young people should look at is how these people used that money. Harry was given some money from his father to buy a house, but he instead invested it in a way his vision and instinct guided him and 30 years later became the man who built thousands of homes for people who couldn’t afford to live in a cottage and funded people who could not receive a loan from the bank.

Now whether Tim Gurner has worked his ass off to save up money for his first place at 21 or was given $30k as some people commented as a jump-start, I doubt very much that even 1% of people given the same kind of  jump-start could turn that $30k and make themselves be worth almost $500m only 15 years later. It is an achievement that not many could replicate even if given a similar opportunity to do so.

Not everyone is born to be an Entrepreneur, President or a Professor, but people can achieve anything they aspire to be as long as they have it in them. However not everyone can take risks, step out of their comfort zone and put everything they worked hard for on the line. Its just a fact of life that most people are not programmed this way but yet this is the one thing that is shared not only by both people on the program but all business leaders globally who accumulated wealth and drive Sydney and other global metropolises like it. 

No country or system owes it to anyone to change itself for them. You need to change yourself, expectations and work ethics  if you want to live a certain quality of life that you desire in a certain type of economy such as Australia in this instance.

To say that Australia or Sydney is not affordable and their opportunity to buy will become easier if only we restrict property policies or if investors or foreign buyers are banned from buying certain properties is a very easy socialist and simplistic view on life. Not all investors make money, many lose money too if their decisions are made poorly. But their activities act as catalysts for the property economy, provide rental housing and drives the construction industry and a multitude of ancillary jobs that support it.  Take them out of the equation and so many pieces of the puzzle would fall. 

Sydney just like NYC, LA,  London and other financial centres has an expensive city centre along with many not so expensive areas nearby. Ideally people like to live close to the centre but not all should expect to start there straight away. There is nothing wrong with buying a place in the lower price bracket a bit further out of the city centre, let it create some growth and then buy something better or better still leverage and invest. Now, vendors you know it,  you have stepped on that property ladder.

If you buy in the right place at the right time, you will succeed even further and will afford both a home to live and to invest further. This is how all successful investors started for the most part, most started with nothing and created their wealth through property.

It is true that Government needs to do something but that something is to create supply to help create affordability. If there is more stock, developers would have to be more competitive and prices would have to be better. So far, various restrictions on lending, for both home and developments and in particular the slow approval processes by Councils will cut supply and therefore will increase prices as it will prevent developers starting new projects.

It is basic rules of economics. Less supply, higher prices. More supply, more competition, better pricing.

Let’s not complain about how bad we have it but do something about it. It’s a great country we live in that gives us all opportunity to make it.  It’s how we use it that matters.

Ilya Melnikoff – Managing Director Luxcon Group