Property Report – March 2017
Quarterly Market Report No. #42 – March 2017
By Terry Ryder, creator of hotspotting.com.au
Introduction: You Just Can’t Believe What You Read About Real Estate
I fear for Australian real estate consumers. Seeking information to underpin investment decisions is like walking blindfold through a minefield – in this case a minefield of misinformation.
The standard of reporting of property issues has deteriorated to the lowest levels I have seen in my 35 years as a real estate researcher and writer. Much of the real estate content of media outletsis nothing more than recycled press releases from developers, agents and other industry spruikers.
Recently I wrote an editorial with this headline: “It’s dangerous to be a newspaper reader in Australia in 2017.”
It’s apparent from my communications with many thousands of consumers over time that most people think reading newspapers and magazines constitutes research. In my view, it’s the opposite – it’s anti-research.
The wrong information is worse than no information at all and much of what is published in mainstream media about residential real estate is misinformation.
That sounds like a sweeping statement but it’s one that’s substantiated by the analysis I present in this report.
In this edition of the Quarterly Market Report, I analyse the major markets around Australia by presenting the conflicting data that’s published by research sources via the media and seeking to make sense of it.This is something that should happen in major media, but sadly no longer occurs in modern Australia.
For analysis of markets nationwide, click on the topics below …
National Overview:Journalism Is Dead As Media Massacres Sensible Debate.
Adelaide/South Australia: Published Numbers Tell Us Nothing Useful About Adelaide.
Brisbane/Queensland:REIQ Vacancy Data Tops Brisbane’s Pile of Misinformation.
Canberra/ACT:Is Canberra Booming Or Is It Merely Doing Okay?
Darwin/Northern Territory: You Can Tell Myriad Different Stories From Data For Darwin.
Hobart/Tasmania:Hobart Is Undoubtedly Rising, But By How Much?
Melbourne/Victoria: Melbourne Is Moderate Or Booming, Depending On The Source.
Perth/Western Australia:If Can Believe Local Media, Perth Is Recovering Fast.
Sydney/NSW: You Will Be Misinformed If You Believe Media About Sydney Prices.
Conclusion: Be Willing To Do Your Own Research Or Pay For Data.
Journalism Is Dead As Media Massacres Sensible Debate On Property Issues
Conversations I had recently with noted property researchers Louis Christopher and Andrew Wilson confirm my views about the state of Australia media, especially when it comes to reporting real estate issues.
Christopher is probably Australia’s most experienced property researcher and currently runs the respected research firm SQM Research, a valuable resource for property investors. Wilson is the chief economist for Domain, which competes with CoreLogic as the nation’s biggest provider of real estate data. CoreLogic has a higher profile, but Domain is a lot more professional and ethical in the way it processes and presents real estate price information.
Wilson, Christopher and I have a number of things in common: we’re all experienced real estate researchers who are horrified as the way media presents property information and reports real estate issues. It’s difficult to imagine how it could be worse.
We’ve all had conversations with journalists who know that CoreLogic figures are rubbery and have been discredited by the Reserve Bank, but continue to use them – indeed present them as fact – because it makes their jobs easier. There’s a steady flow of neatly packaged statistics that can be re-cycled as credible news, even though journalists know the figures are often unreliable.
One of outcomes is that Sydney has been widely portrayed in media as continuing to have a prolonged house price boom. It simply isn’t true but that’s what media has indicated, based almost entirely on inflated price growth figures and even more rubbery auction clearance rates.
Price growth figures from other sources, including the Australian Bureau of Statistics, Domain and Residex, are considerably lower.
ABS and Domain calculations suggest a realistic growth figure for Sydney houses in 2016 was 3% or 4%, but CoreLogic claimed it was 16% – and that’s the number repeatedly quoted by media.
There are also big discrepancies in the figures for apartments.
Out of the illusion of soaring prices has flowed relentless outcry about bubbles, an affordability crisis and a blame game focused on foreign investors, negative gearing, immigrants and other scapegoats.
The end result is a great seething mass of misinformation. Most of what is written about Sydney real estate is wildly distorted and inaccurate.
The problem is compounded because much of our major media emanates from Sydney. Writers and commentators based in Sydney extrapolate their local situation to the nation, creating furphies such as “Australian house prices are soaring”, there’s a “national affordability crisis” and “the Great Australian Dream is Dead”.
Media is obsessed with the storyline that no one can afford to buy any more and it’s become quite ridiculous. Much of this has been generated by data from CoreLogic which cares less about accuracy or fairness than about maximizing publicity. Most of the “debate” about national housing affordability is presented against the background of Sydney’s median house price (a figure that irrelevant to the discussion, even in Sydney).
For these and many other reasons, I believe it’s dangerous for property investors to read newspapers and tune into mainstream media.
Not only are the real estate statistics often distorted and misleading, but the people writing the articles or providing the commentary are not real estate experts. They’re often inexperienced writers with no specialist knowledge about the property market. Most of their work comprises re-writing press releases – i.e. they re-cycle propaganda as credible news.
They compound this problem by often seeking analysis from professionals who are not real estate experts – e.g. economists with a wafer-thin veneer of understanding about the property market.
Seeking expert analysis about real estate from an economist is like asking a hockey expert to provide commentary on the AFL grand final.
There’s an important reason why all this matters. Investors and home-buyers make big financial decisions based on what they think they know about real estate. Their “knowledge” is based,far too often, on misinformation absorbed from headlines and media sound bytes.
I’m frequently asked questions about real estate by consumers. It happens when I speak to live audiences and also daily via phone calls and emails. I would estimate that 90% of the questions I receive arise out of misinformation absorbed from mainstream media.
The sad reality is you just cannot trust real estate statistics and you cannot believe most of what is published by newspapers and other forms of media. Information presented as fact is anything but credible information.
Consumers need to exercise great care about where they source information and what they choose to believe. It can be the difference between a good financial decision and a bad one.
Adelaide and South Australia
The Published Numbers Tell Us Nothing Useful About Adelaide’s Property Market
Adelaide has had some price growth in the past year, but the question is: how much?
Domain says the rise was only 2.5%, while the Australian Bureau of Statistics says 3.9%. But CoreLogic reports 4.5% growth and Louis Christopher’s SQM Research records a more bullish 6.6%.
The higher growth figures are more realistic, given the busy activity in the market.
Of course, as is always the case, the custom of distilling growth within a city down to a single figure disguises all sorts of things happening within individual precincts. In Adelaide, some areas have had double-digit annual growth in the past two years, but you wouldn’t know it from media reports, which focus on the handouts from the publicity-hungry research firms.
Adelaide has an active market, with sales activity rising steadily over the past two years. The state economy is not pumping the way it is in other states, but jobs are being created and there is solid demand for real estate.
While the media highlights negative events in the Adelaide manufacturing industry, such as the car plant closure, the statistics show that more jobs are being created than are being lost in that industry. Manufacturing in Adelaide has switched from the old style to the modern, with more emphasis on IT products (this is a national transitional trend, which has been seen also in places like Wollongong and Geelong).
Adelaide has the prospect of future boosts from the construction of marine vessels for the Navy and will be a beneficiary from revival in the nation’s resources sector. It will all take time, but the SA capital has a solid future.
One of the most interesting phenomena I observe around Australia is the way in which a major adverse event for a city or regional centre ultimately becomes a major positive. When a significant business or industry shuts down, media portrays it as a disaster from which there is no way back, but political, civic and business leaders mobilize and create counter measures. The final outcome is usually a net positive.
The closure of the car plant (and also the Coca Cola bottling plant) fit this phenomenon for Adelaide. Similarly, recent power supply problems, which gained national publicity and caused a lot of noisy and mostly dishonest posturing by politicians, will generate responses that create economic activity and jobs.
It may well be the same for one of SA’s largest regional cities, Whyalla. It’s doing it tough at the moment, not helped by major employer Arrium going into receivership. Federal, state and local leaders have responded with measures that appear likely to rescue the situation and create a net positive for Whyalla, where fortunes tend to rise and fall with the cycles of the resources sector.
Brisbane and Queensland
REIQ Vacancy Data Tops Brisbane’s Pile of Misinformation
If you can believe media reports, vacancies in central Brisbane have dropped and are now close to acceptable levels, not much higher than 3%. This is because media, sadly, recycles industry propaganda are credible news.
The reality, as portrayed by independent research, is that Brisbane inner-city vacancies remain uncomfortably high and are likely to get bigger before they improve.
The Real Estate Institute of Queensland, which lately has specialised in political game-playing, published research indicating vacancies down close to 3% in inner Brisbane, no doubt trying to counter constant negative publicity about oversupply in the apartment market.
But independent vacancy data from SQM Research shows that vacancies continue to be extremely high. The Brisbane CBD and all the near-city suburbs, including South Brisbane, Fortitude Valley, Kangaroo Point and Woolloongabba, have vacancies in the 5-6% range.
They will inevitably worsen, with more high-rise projects coming out of the ground.
The big question is why journalists would publish the REIQ figures, which clearly conflicted with the prevailing view of things, without asking a few questions and seeking alternative information. The answer to this rhetorical question is that journalists no longer do journalism – they are conduits for industry press releases.
Not only does central Brisbane have high vacancies but the disease has spread to some of the middle ring suburbs, with small and medium-sized developers building too many units and townhouses in locations such as Albion, Kevin Grove and Chermside. Investors are advised to check vacancy rates on the SQM website and also to check building approvals data, which can provide a clue to future oversupply.
This is not to say that people should stay out of the Brisbane market. Most precincts have moderate vacancies and Brisbane overall has good prospects for solid growth.
The key elements are economic growth and infrastructure spending, factors which have been strong in Sydney and weak in Brisbane in recent years, hence the relative differences in market performance.
The Queensland economy is showing signs of improvement, especially in the growing confidence in the resources sector, while there are a number of big-ticket projects in the pipeline for Brisbane, including infrastructure projects and major tourism-related developments.
The more affordable areas in the outer ring suburbs are the ones with the greatest momentum, including the Moreton Region in the far south, Logan City in the far south, and Ipswich City in the south-west. There are also busy markets in the Redlands LGA in the east.
There is also a rising tide in some of the regional Queensland economies. The resources sector has renewed confidence and previously-mothballed projects have been revived. There is a growing number of alternative energy projects is the pipeline, including wind farms and solar power plants.
Regional centres that have struggled in recent years are on the way back, headed by Townsville and including also Rockhampton and Mackay. Boom-bust city Gladstone has some prospects of recovery, after 3-4 tough years.
Meanwhile, the Gold Coast and the Sunshine Coast continue to thrive, boosted by vibrant economies and major spending on infrastructure and other construction projects.
Canberra and the ACT
Is Canberra Booming Or Is It Merely Doing Okay?
Everyone appears to agree that the Canberra is improving but the question is: how much?
Canberra, traditionally the steadiest market in capital city Australia, has risen lately on the back of a steady local economy, very low vacancies and recovery from the previous situation whereby there was an oversupply of apartments and demand had been dented by downsizing of the public service.
All appears to be humming along nicely now. All four research sources I examined record growth in house prices that ranges from solid to strong.
The apartment market, still a bit fragile following previous oversupply, is less buoyant.
Domain suggests Canberra house prices are up 5% in annual terms, while the ABS suggests it’s closer to 7% – but CoreLogic has it above 9% and SQM claims 12%.
Again, there’s considerable difference, partly explained by different methodologies and parameters, but creating confusion among consumers.
Some figures depict a solid market with moderate growth, but others suggest there may be a boom under way.
I certainly don’t see Canberra as a boom market. It’s moderately strong. Sales volumes are good – not as strong in 2016 as the year before, but still very solid.
Vacancies are low – the second lowest in capital city Australia, after Hobart, according to SQM Research – and some reports suggest solid rental growth.
But the overall theme is “solid”, not “boom”.
The most active markets are in the Districts of Belconnen and Gungahlin in the north, but there are growth markets to be found across the city.
Darwin and the Northern Territory
You Can Tell Myriad Different Stories, Based On Published Data For Darwin
Darwin is on the cusp of recovery, or it’s still falling moderately or it’s dropping dramatically – depending on whose figures you choose to believe.
In terms of the outcomes for Darwin house prices in 2016, CoreLogic essentially said there had been no change (it recorded an annual decrease of 0.2%) – which suggests that, after three years of falling prices, the market was leveling out and approaching recovery.
But Louis Christopher’s SQM Research reported an annual drop in asking prices of 4.7%, while the Australian Bureau Statistics found that Darwin’s house price index was down 8.5%.
Meanwhile, Domain reported a 10.5% decline in Darwin house prices for 2016.
The question, as always, is: who to believe?
In answering that question, firstly I disregard the CoreLogic figures as overly bullish, as they are for most locations. The SQM numbers are based on asking prices, so may be more positive than actual settled sales, so we are left to look at the ABS and Domain figures, which both suggest substantial price decline.
Those numbers make sense, because the local economy is seriously in the doldrums and sales volumes are down substantially. Vacancies remain high, with large numbers of people leaving Darwin as job opportunities dry up.
There is hope that a new Territory Government will inspire revival, with incentives for first-home buyers leading the way, but ultimately it’s about the local economy. The Darwin up-cycle in 2012 and 2013 was related largely to the stimulus created by the $30 billion Inpex gas project and something big needs to happen to re-generate economic activity, jobs and demand for real estate.
Recently there was news of a major offshore gas find, one that allegedly is even bigger than the Inpex resource, and that’s the kind of event the Northern Territory needs to spark revival. But projects like that take a long time to progress from resource discovery to actual construction creating jobs.
Hobart and Tasmania
Hobart Is Undoubtedly Rising, But By How Much?
There’s no doubt Hobart and other Tasmanian markets are rising.
All the major research sources recorded growth in Hobart’s median house price in 2016, but the rate of growth varied from 6.4% to 11.7%. Some figures, therefore, depict a moderately rising market and others suggest a booming one.
The bottom line for Hobart is that, after so long in the economic and real estate doldrums, it now has a pretty good situation when the lowest growth figure is 6.4%.
This is supported by a vacancy rate which, according to Louis Christopher’s SQM Research, is consistently the lowest among the capital cities. It also has the highest rental yields.
But the most important statistic for Hobart and Tasmanian is not a real estate one – it’s the latest ranking from CommSec in the State of the States quarterly report. Tasmanian, for so long the basket case economy among the states and territories, has been elevated from 7th to 4th – ahead of Queensland, WA, SA and the Northern Territory.
Those are dizzy heights for humble Tasmania but it’s a result that has been brewing from consistent improvements over the past 2-3 years. As in NSW, it was a change in State Government that the catalyst for the turnaround in economic fortunes and a big lift in infrastructure spending, which is a pivotal factor.
So as the boom in Sydney and the less-that-boom in Melbourne wind down, Hobart continues to rise and could be leading the nation on price growth before we’re very much older.
It has the very attractive combination of the lowest prices, tightest vacancies and highest rental yields among the capital cities of Australia.
Of course there’s more to Tasmania than just Hobart and indeed Launceston appears (based n the sales activity numbers) to have as much momentum as the state capital.
With most suburbs having median house prices in the $200,000s or low $300,000s, it’s a market that may be targeted by mainland investors once Australia wakes up to the reality that there’s real estate beyond Sydney.
Melbourne and Victoria
Melbourne Is Moderate Or Booming, Depending On The Source You Prefer
Most of our major media comes out of the Sydney. Of the bits that do not, most of them emanate from Melbourne – where media obsesses over auction clearance rates and publishes anything sent out by the Real Estate Institute of Victoria, probably the least reliable of the real estate institutes in Australia, with the possible exception of Queensland.
Journalists’ obsession with the auction scene – which, even in Melbourne, covers only a fraction of the market – means that what’s happening amid the hype and hyperbole of prestige property is presented as the reality for all of Melbourne.
As one recent example, Fairfax media outlets ran an article which gushed over properties in suburbs such as Toorak selling for multi-million-dollar prices. But the article, rather bizarrely, began like this: For home buyers struggling to purchase the right property in Melbourne, life just got more challenging. Not only do well-heeled buyers have to contend with raging levels of competition for quality homes, those on tighter budgets also have to dig deeper to buy properties in their price range. Across the city at the weekend, several properties attracted large crowds of onlookers and feisty bidder competition.
The relationship between homes selling for prices north of $4 million and the first-home-buyer market was not explained.
But that’s media today: they’re obsessed with the “housing affordability crisis” storyline and they’ll bend any event to fit the pet theme.
Beyond that, media creates the usual confusion about the Melbourne market by publishing, in isolation, each of the price growth numbers from the various research sources, without ever comparing them and making sense of the contradictions.
So, how much have house prices grown in Melbourne, on average, in the past year? According to SQM Research and the Australian Bureau of Statistics, it’s around 8%.
But Domain says it’s10% and CoreLogic, with its tendency towards high price growth numbers, comes in with a 15% rise.
There’s quite a difference there – a range from 8% to 15%. Either Melbourne is chugging along well or it’s having a boom to challenge Sydney.
And then it raises the question of what’s happening in individual precincts. Each research entity delivers one figure to describe Melbourne, a city of four million, as a single market. Does it tell us anything about what’s happening in Melton in the far west, or Cranbourne in the far south-east or Epping up in the north?
You wouldn’t know it from media coverage, based on their fascination with prestige auctions, but Melbourne’s market overall has slowed down a lot in the past year or so. Much of the activity is happening in the affordable areas on the fringes, which is an indication that the cycle is drawing to an end.
The middle-ring suburbs which led the way previously have lost some of their heat and it’s the cheaper areas that are now the busiest – but largely ignored by the auction-focused media.
Beyond Melbourne, Geelong (as I have noted in previous editions of this report) is the strongest market, boosted by a buoyant local economy which is un-fazed by the closure of the Ford motor plant.
Ballarat and Bendigo are both chugging along nicely, but the place most likely to produce good price growth in regional Victoria is Geelong.
Perth and Western Australia
If You Believe Local Media, Perth Is Recovering Fast – But They’re Premature
There’s one thing all sources of price data agree about: the Perth market has been in decline. The point of disagreement has been about how much. Another source of confusion and misinformation is the local media’s willingness to recycle industry propaganda as news.
Four major sources all recorded decreases in Perth house prices last year but the degree of decline varied from 2.3% to 4.1% to 4.4% to 6.0%.
This represented the third consecutive year of falling prices and was no surprise: vacancies are high, not only in the inner-city areas flooded with apartment overbuilding, but right across the Perth metropolitan area. Suburban postcode areas with 5% vacancy rates are common and rents have been falling as much as prices, with tenants able to drive hard bargains.
The hardest task in hotspotting around Australia is trying to identify future hotspots in Perth – or indeed anywhere in Western Australia. Every precinct in Perth has a down market with high vacancies and falling prices. It requires long-term vision to see opportunities and future prospects.
And of course there are plenty of those in Perth. When a market is down like this, there’s a tendency to forget historical factors, such as WA’s status as a strong economy and Perth’s frequent position as a leader on population growth. In 2012 and early 2013, Perth was vying with Darwin for the No.1 position on price growth among the capital cities. That was before Sydney started to boom – and ahead of the decline in the resources investment boom, which de-powered property markets right across the state.
So investors with vision and a strategic mindset might see opportunities to buy bargains while the market is down and await the next up-cycle. Most people, of course, being herd animals, will await news that there’s a boom again and follow the pack into the next frenzy. Perth’s a bit like that – with sharp peaks and deep troughs, which reflects its dependence of the volatile resources sector.
Right now the Perth property industry is working hard to talk up the market. The Real Estate Institute of WA, local developers and others with a vested interest are pumping out press releases that present interesting case studies of the old “lies, damned lies and statistics” syndrome. If you can believe the industry, a recovery is already under way and people should rush to buy before prices rise.
It’s rubbish but some people might believe it because the local media is happy to print this shameless propaganda as credible news. Journalism is dead in Perth, as it is everywhere else in Australia.
Meanwhile, it continues to be ugly for the regional centres reliant on the resources sector. The REIWA recently reported the Port Hedland median house price as $262,000, which is a distant whimper from the days of $1.2 million.
Karratha was given a median house price of $265,000, when it was around $800,000 in the glory days of the resources investment boom.
Some regional centres, notably those not closely connected to the resources sector, showed a glimmer of growth in the latest REIWA figures, including Albany, Bunbury and Busselton.
Sydney and New South Wales
You Will Be Misinformed If You Believe Most Media About Sydney Prices
Media is obsessed with Sydney house prices. Most of Australia’s major media emanates from Sydney and Sydney-based journalists and commentators think nothing much matters in Australian real estate beyond Sydney prices.
Worse, most reports take the Sydney situation and extrapolate it across the nation, turning Sydney’s boom into a national one, and Sydney’s affordability situation into a national crisis.
To makes a bad situation worse, most of the figures reported about Sydney house prices are rubbish. Perhaps 90% of media reports on the Sydney market quote CoreLogic figures and this greatly distorts and misrepresents the situation.
CoreLogic figures for price growth are inflated, especially for Sydney and Melbourne. The Reserve Bank had used CoreLogic price data to help it make decisions on interest rates, but announced in August 2016 that it had decided to no longer use the figures, because it believed them to be inflated.
CoreLogic, in response, admitted that it had recently changed its methodology and there were a few teething problems. Coupled with that were some serious problems associated with the CoreLogic mentality. The chief objective within the firm is always to maximise publicity – and that means being first to publish. CoreLogic, in my view, rushes out figures before a complete data set is available (e.g. price growth figures for February will be published on 1 March, even though most January sales have yet to settle and complete figures are not available).
Despite all that, media continues to publish CoreLogic figures. These numbers are quoted as fact, without question, even though the Reserve Bank says they are inflated.
On the basis of CoreLogic figures, most media reports declare that Sydney house prices rose 16% in 2016. This meant that the price boom was continuing and from that came other assumptions, such as a bubble, an affordability crisis and a market out of control, inflated by foreign investors and negatively-geared Australian investors.
And, in simple terms, it’s all rubbish. The latest numbers from the Australian Bureau of Statistics suggest the annual growth rate for Sydney houses is 3.3%. Domain chief economist Andrew Wilson says that if you compare prices from all 2016 sales to all 2015 sales, the annual growth rate for Sydney houses is 4.4%.
SQM Research and Residex have also published much smaller rates for Sydney than those published by CoreLogic.
But because 90% of the figures quoted by media are CoreLogic’s, the overwhelming impression created is that the Sydney price boom continues.
The other way in which media misinforms people about Sydney is through the compliant recycling of industry figures for auction clearance rates. These are the most rubbery figures of all and there should be a law against publishing them.
Hotspotting’s quarterly surveys of sales volumes shows there was a massive drop-off in sales activity in 2016. The decline was quite dramatic in some markets, sufficient for Hotspotting to rate some Sydney suburbs as danger markets. But you would never know, if your sole source of knowledge was reading newspapers like The Australian and the Sydney Morning Herald.
So what’s happening in New South Wales outside of Sydney? If you follow mainstream media you’d think nothing was happening in Regional NSW, because journalists are so fascinated by Sydney prices.
But in reality there are many noteworthy markets out there in the regions. And they have appeal that can’t be provided by Sydney, such as affordable prices and good rental yields.
Many have delivered good capital growth in recent years as well, including Wollongong, Newcastle, Dubbo, Port Macquarie and many other regional cities.
Other regional markets with elevated activity likely to lead to price growth include Coffs Harbour, Tweed Heads, Tamworth, Armidale, the towns of the Hunter region, Goulburn, Orange and Wagga Wagga.
It’s not feasible to discuss all these places in detail but, to provide an idea of the possibilities, let’s focus on Armidale.
This important and strategic regional city has greater economic diversity than most regional centres, with a strong education sector based on the University of New England, in addition to agriculture and tourism. Soon it may add a strong government administration component with local Member (and Deputy Prime Minister) Barnaby Joyce announcing a major government department will move from Canberra to Armidale.
There’s a big infrastructure spend happening, with upgrades to the hospital and the airport, plus plans for a major wind farm and a solar power facility in the offing.
Armidale’s median house price is around$350,000, with units in the $200,000s. Typical rental yields around 5-6% look compared to the Sydney norm around 2.5%.
Be Willing To Do Your Own Research Or Pay For Data From Credible Sources
In the previous edition of this quarterly report, I presented this simple three-step formula for success as property investors in 2017:-
- Step One: stop reading newspapers.
- Step Two: conduct genuine research.
- Step Three: be willing to pay for good information and quality advice.
It’s worth repeating.
Above all else, those seeking to invest in real estate must treat the process like a business. In any business venture, you must be willing to spend money to make money. Real estate investment is no different.
The most successful investors I know – those with large portfolios of growth properties – behave in this way. They approach property investment as a business venture and understand the importance of seeking services and advice from qualified professionals, including research information.
Most mum-and-dad investors don’t do that – and end up with ordinary results.
All the information a consumer will ever need to make informed choices exists and most of it is readily available through Internet research. The problem is that often data from one source conflicts with figures from another.
How to make sense of it? Seek advice from qualified businesses. And be willing to pay for it.