Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Just taking your cross to the housing market. Well, it's
reportedly heating up. September just clock the biggest jump in
national home values since October last year. The latest starter
from Totality shows prices rose zero point eight percent nationally,
with capital cities like Brisbane, Perth and Darwin leading the charge.
(00:20):
Now Darwin led the way with values increasing one point
seven percent as I understand it last month, followed by Perth, Brisbane, Adelaide, Sydney, Canberra,
Melbourne and Hobart. Now we've then got the expansion of
course of the Federal Government's home guarantee scheme. Is it
is expected that it's going to fuel price growth with
no income or place limits on the scheme, allowing eligible
(00:44):
first time buys to purchase with a five percent deposit.
Now joining us on the line to talk more about
this is Cotalities Research director Tim Lawler skoodboarding. Tim, lovely
to have you on the show and Tim, such an
interesting week with the expansion of course of the Federal
government's first home bio grants. I mean, before we get there,
(01:07):
my understanding is Darwin recorded a jump in home values
over the last quarter. Can you talk us through what
kind of numbers we're talking.
Speaker 2 (01:14):
Yeah, the September quarter was up nearly six percent, and
by far the largest gains of any capital city is
occurring in Darwin. So they give you some context that
that five point nine percent rise in September is about
an increase of about thirty one thousand dollars, So it's
a pretty big jump, especially when you consider us off
a low base as well. So Darwin seems to be
(01:35):
running its own race here. I mean, sure Brisbane and
Perth are pretty strong as well, but the Darwin's in
a class of its own at the moment, of course,
following a period of extraordinarily weak conditions leading into twenty twenty.
So we need to keep the longer term context in mind,
but absolutely very strong market at the moment.
Speaker 1 (01:53):
And it is good to hear. I mean, it's you know,
we like you touched on. We've had a pretty low
base to work from for a while. I guess we've
all sort of been waiting to see what would happen
with the real estate market. But what do you attribute
or do we know why those prices are seemingly on
the rise.
Speaker 2 (02:10):
Yeah, there's a bunch of things. Of course, interest rates
are coming down that's part of it, but beyond that,
there is very small amounts of stock available for sales.
Listing numbers across Darwhen there are about fifty three percent
below average for this time of the year, so it's
very scarce pickings for for buyers out there. At the
same time, by demand is up about ninety eight percent
(02:32):
on the five year average, so it's originally double what
it would normally be at this time of the year
as well, So you've got half the amount of homes
available for sale, you've got double the amount of people
active in the marketplace. Clearly, the only way for prices
to go is up. There's also things like I mean
investors that they've doubled in activity over the past twelve
months as well, so and there's affordability. There's not much
(02:54):
of a barrier in terms of affordability for Darwin, like
there is another capital cities as well that there's a
median house fell you about six hundred and sixty seven
thousand dollars, the national meetings nine hundred and thirty thousand,
so it's a relatively affordable market to be buying into.
Speaker 1 (03:09):
Tim How unusual is it that you know this level
of supply shortage and what impact is it then having,
I suppose on buyers and sellers.
Speaker 2 (03:19):
Yeah, it's really unusual. I mean, Darwin is typically a
market where stock levels have been elevated up until you know,
a year and a half ago or so, we really
started to see demand picking up and vendor activity didn't follow.
So it's about a normal number of new listings coming
into the market. They're it's getting absorbed really quickly. The
other really strong markets like Brisbane and Perth are showing
(03:40):
a similar trend, but nowhere near is extreme. So Perth
listings are down about forty percent on average, Brison about
thirty percent. So yeah, I think for buyers it's going
to be quite frustrating. They'll be finding that homes are
selling really quickly. If you're a seller, you're really in
a driver's seat here.
Speaker 1 (03:56):
Yeah. Well, which is great if you're a seller, but
what about those first home buyers as well. I mean,
obviously the federal governments announced, you know, the expansion of
their grant earlier this week. We were talking again yesterday,
and we spoke about it a couple of weeks ago
as well. I mean, with the you know, with the
shortage of properties available to purchase and then that price cap,
(04:17):
it feels as though it's quite a limited you know,
there's quite limited options if you are a first time
buyer looking to purchase a home here in Darwin or
the Greater Darwin region.
Speaker 2 (04:29):
Yeah, I agree with you, and I think first home
buyers are going to be feeling a sense of urgency
to take advantage of this stimulus. To give you some context,
that the price cap in Darwin six hundred thousand dollars,
which is quite low. You know, I mentioned the median
dwelling value is all about six or about five hundred
and sixty thousand. We want to buy a house. There's
only about twenty seven percent of suburbs across Darwen have
(04:51):
a median value for houses that are at of below
six hundred thousand dollars. So it's again that there's done
a lot of choice there and with listings being so low,
I think those particular suburbs will be rising in value
really quickly. So for first home buyers first to invest dressed,
I think if they want to take advantage of this
five percent deposit guarantees.
Speaker 1 (05:11):
Yeah, I know there's real calls from some in the
Northern Territory you know some of the mortgage brokers also
from some of some working in real estate for that
cap to you know, to be relooked at by the
federal government for us here in the Northern Territory.
Speaker 2 (05:26):
Yeah, I think it makes sense. I'm not sure if
there's a review period for the price caps. I don't
think there is. These caps were set a few months back,
probably around the middle of the year I think, and
they were based on the median house values. But Darwin's
been going through such a rapid period of growth that
it's the one capital city where the large majority of
(05:47):
suburbs are simply below that that cap for houses. So yeah,
I agree it probably does need a relook in terms
of what the pricing threshold is for the famulus and Darwin.
Speaker 1 (05:58):
Are we seeing the same growth a cross both houses
and units in Darwin and in Palmerston as well, And
obviously then I guess we might take a bit of
a look if we can at some of the more
regional parts of the Northern Territory.
Speaker 2 (06:12):
Yeah. Sure, I mean, we are definitely seeing houses rising
at a faster pace than units, but there's not a
great deal of difference here. Just to give you, I
guess a view on the quarterly data. House values are
up seven percent. Unit values are up nearly four percent.
So we're typically seeing the Darwin unit market underperforming. It
(06:32):
has had a history of larger supply, and I think
with the affordability challenges relatively the barriers relatively low, given
the low medium value and the fact that other capital
cities are much more expensive, there is still this preference
to buy a detached home across Darwin, but there is
a pretty big price gap between the two product types.
(06:54):
A typical house about six hundred and sixty seven thousand dollars,
the typical unit that just over four one hundred thousand dollars.
So it's clearly a very much more affordable market to
be buying into in terms of the regional areas. So
we're not seeing Catherine or Alice Springs performing quite as
strongly as what Darwin is, but they are actually starting
(07:14):
to see a little bit of growth, particularly Alice Springs.
So Alice was up about four percent over the quarter,
Catherine was up half a percent, so a little bit
better than flat. But of course these markets have come
out of a really soft period. They're still well below
their record highs, you know, Alice Springs peaked all the
way back in twenty fourteen, and we're still seeing values
(07:35):
seven percent below that mark.
Speaker 1 (07:37):
Tim when you look at the federal government's first time
BIA scheme and the impact that it's having across the nation,
give us a bit of context, you know, how has
it sort of ramped up the market? How things going well.
Speaker 2 (07:51):
It's only been active for a day, so it's been
hard to tell just yet, but my speculation is it's
going to be oversubscribed, to be seeing a real surge
of first home by activity taking advantage of these price caps,
because I think pretty quickly you'll find the more desirable
suburbs just simply exceed the pricing thresholds. The other key
(08:14):
thing about the stimulus is even though it might be
a little bit easier to raise a five percent deposit
for first home boroers, they still need to demonstrate an
ability to service the loan, and this might be the
bigger challenge, especially considering lenders are still assessing borrowers to
repay their mortgages three percentage points higher and the going
interest rate, so that means, I mean mortgage rates at
(08:34):
the moment are generally sort of in the lower the
mid five percent range you needed paying back your mortgage
at least in theory on a mortgage rate above eight percent.
Speaker 1 (08:44):
And obviously the you know, the theory behind it is
good and the intention behind it's really good. But I
guess a lot of people are quite worried that what
it's going to mean is that, you know, we just
see those home prices skyrocket and it's going to be
more difficult I suppose for some to be able to
enter the market.
Speaker 2 (09:03):
Absolutely. I mean, this scheme does nothing to address the
underlying issues of housing affordability. It is a band aid
on the problem. So you'll find that a year from
now first home buyers are going to be nowhere near
better off. Housing has got to be more expensive, it'll
be less affordable. So it is a bit of a
(09:23):
popular policy that unfortunately doesn't really address the underlying issues.
We really need to be seeing more focus on getting
supplying to the marketplace and fixing a broken housing supply system.
Speaker 1 (09:35):
And tim how are things looking here in the Northern
Territory when you look at at our rental market, So
you're able to give us a bit of insight in
that space, Yeah.
Speaker 2 (09:44):
The rental market's burning at the moment, we've got a
vacancy rate across dar one of two point one percent
that's pretty close to record lows. Rents are rising at
nearly eight percent per annum. That's the strongest rental growth
of any capital city across the country as well, and
there's a little bit of acceleration underway as well. We
can see there's been a bit of a rebound and
never overseas migration as well. That's probably one of the
(10:06):
key factors that's contributing to the lower vacancy rate in
the pickup and mental growth as well well.
Speaker 1 (10:12):
Tim Lawless, it is always good to catch up with you.
I really appreciate your insight. I know our listeners do
as well. And yeah, it's an interesting week I suppose
when you look at the housing market and it will
be interesting to see what happens, as you know, as
this scheme continues on.
Speaker 2 (10:27):
Good to check Katie.
Speaker 1 (10:28):
Thanks for being Thanks Tim
Just taking your cross to the housing market. Well, it's
reportedly heating up. September just clock the biggest jump in
national home values since October last year. The latest starter
from Totality shows prices rose zero point eight percent nationally,
with capital cities like Brisbane, Perth and Darwin leading the charge.
(00:20):
Now Darwin led the way with values increasing one point
seven percent as I understand it last month, followed by Perth, Brisbane, Adelaide, Sydney, Canberra,
Melbourne and Hobart. Now we've then got the expansion of
course of the Federal Government's home guarantee scheme. Is it
is expected that it's going to fuel price growth with
no income or place limits on the scheme, allowing eligible
(00:44):
first time buys to purchase with a five percent deposit.
Now joining us on the line to talk more about
this is Cotalities Research director Tim Lawler skoodboarding. Tim, lovely
to have you on the show and Tim, such an
interesting week with the expansion of course of the Federal
government's first home bio grants. I mean, before we get there,
(01:07):
my understanding is Darwin recorded a jump in home values
over the last quarter. Can you talk us through what
kind of numbers we're talking.
Speaker 2 (01:14):
Yeah, the September quarter was up nearly six percent, and
by far the largest gains of any capital city is
occurring in Darwin. So they give you some context that
that five point nine percent rise in September is about
an increase of about thirty one thousand dollars, So it's
a pretty big jump, especially when you consider us off
a low base as well. So Darwin seems to be
(01:35):
running its own race here. I mean, sure Brisbane and
Perth are pretty strong as well, but the Darwin's in
a class of its own at the moment, of course,
following a period of extraordinarily weak conditions leading into twenty twenty.
So we need to keep the longer term context in mind,
but absolutely very strong market at the moment.
Speaker 1 (01:53):
And it is good to hear. I mean, it's you know,
we like you touched on. We've had a pretty low
base to work from for a while. I guess we've
all sort of been waiting to see what would happen
with the real estate market. But what do you attribute
or do we know why those prices are seemingly on
the rise.
Speaker 2 (02:10):
Yeah, there's a bunch of things. Of course, interest rates
are coming down that's part of it, but beyond that,
there is very small amounts of stock available for sales.
Listing numbers across Darwhen there are about fifty three percent
below average for this time of the year, so it's
very scarce pickings for for buyers out there. At the
same time, by demand is up about ninety eight percent
(02:32):
on the five year average, so it's originally double what
it would normally be at this time of the year
as well, So you've got half the amount of homes
available for sale, you've got double the amount of people
active in the marketplace. Clearly, the only way for prices
to go is up. There's also things like I mean
investors that they've doubled in activity over the past twelve
months as well, so and there's affordability. There's not much
(02:54):
of a barrier in terms of affordability for Darwin, like
there is another capital cities as well that there's a
median house fell you about six hundred and sixty seven
thousand dollars, the national meetings nine hundred and thirty thousand,
so it's a relatively affordable market to be buying into.
Speaker 1 (03:09):
Tim How unusual is it that you know this level
of supply shortage and what impact is it then having,
I suppose on buyers and sellers.
Speaker 2 (03:19):
Yeah, it's really unusual. I mean, Darwin is typically a
market where stock levels have been elevated up until you know,
a year and a half ago or so, we really
started to see demand picking up and vendor activity didn't follow.
So it's about a normal number of new listings coming
into the market. They're it's getting absorbed really quickly. The
other really strong markets like Brisbane and Perth are showing
(03:40):
a similar trend, but nowhere near is extreme. So Perth
listings are down about forty percent on average, Brison about
thirty percent. So yeah, I think for buyers it's going
to be quite frustrating. They'll be finding that homes are
selling really quickly. If you're a seller, you're really in
a driver's seat here.
Speaker 1 (03:56):
Yeah. Well, which is great if you're a seller, but
what about those first home buyers as well. I mean,
obviously the federal governments announced, you know, the expansion of
their grant earlier this week. We were talking again yesterday,
and we spoke about it a couple of weeks ago
as well. I mean, with the you know, with the
shortage of properties available to purchase and then that price cap,
(04:17):
it feels as though it's quite a limited you know,
there's quite limited options if you are a first time
buyer looking to purchase a home here in Darwin or
the Greater Darwin region.
Speaker 2 (04:29):
Yeah, I agree with you, and I think first home
buyers are going to be feeling a sense of urgency
to take advantage of this stimulus. To give you some context,
that the price cap in Darwin six hundred thousand dollars,
which is quite low. You know, I mentioned the median
dwelling value is all about six or about five hundred
and sixty thousand. We want to buy a house. There's
only about twenty seven percent of suburbs across Darwen have
(04:51):
a median value for houses that are at of below
six hundred thousand dollars. So it's again that there's done
a lot of choice there and with listings being so low,
I think those particular suburbs will be rising in value
really quickly. So for first home buyers first to invest dressed,
I think if they want to take advantage of this
five percent deposit guarantees.
Speaker 1 (05:11):
Yeah, I know there's real calls from some in the
Northern Territory you know some of the mortgage brokers also
from some of some working in real estate for that
cap to you know, to be relooked at by the
federal government for us here in the Northern Territory.
Speaker 2 (05:26):
Yeah, I think it makes sense. I'm not sure if
there's a review period for the price caps. I don't
think there is. These caps were set a few months back,
probably around the middle of the year I think, and
they were based on the median house values. But Darwin's
been going through such a rapid period of growth that
it's the one capital city where the large majority of
(05:47):
suburbs are simply below that that cap for houses. So yeah,
I agree it probably does need a relook in terms
of what the pricing threshold is for the famulus and Darwin.
Speaker 1 (05:58):
Are we seeing the same growth a cross both houses
and units in Darwin and in Palmerston as well, And
obviously then I guess we might take a bit of
a look if we can at some of the more
regional parts of the Northern Territory.
Speaker 2 (06:12):
Yeah. Sure, I mean, we are definitely seeing houses rising
at a faster pace than units, but there's not a
great deal of difference here. Just to give you, I
guess a view on the quarterly data. House values are
up seven percent. Unit values are up nearly four percent.
So we're typically seeing the Darwin unit market underperforming. It
(06:32):
has had a history of larger supply, and I think
with the affordability challenges relatively the barriers relatively low, given
the low medium value and the fact that other capital
cities are much more expensive, there is still this preference
to buy a detached home across Darwin, but there is
a pretty big price gap between the two product types.
(06:54):
A typical house about six hundred and sixty seven thousand dollars,
the typical unit that just over four one hundred thousand dollars.
So it's clearly a very much more affordable market to
be buying into in terms of the regional areas. So
we're not seeing Catherine or Alice Springs performing quite as
strongly as what Darwin is, but they are actually starting
(07:14):
to see a little bit of growth, particularly Alice Springs.
So Alice was up about four percent over the quarter,
Catherine was up half a percent, so a little bit
better than flat. But of course these markets have come
out of a really soft period. They're still well below
their record highs, you know, Alice Springs peaked all the
way back in twenty fourteen, and we're still seeing values
(07:35):
seven percent below that mark.
Speaker 1 (07:37):
Tim when you look at the federal government's first time
BIA scheme and the impact that it's having across the nation,
give us a bit of context, you know, how has
it sort of ramped up the market? How things going well.
Speaker 2 (07:51):
It's only been active for a day, so it's been
hard to tell just yet, but my speculation is it's
going to be oversubscribed, to be seeing a real surge
of first home by activity taking advantage of these price caps,
because I think pretty quickly you'll find the more desirable
suburbs just simply exceed the pricing thresholds. The other key
(08:14):
thing about the stimulus is even though it might be
a little bit easier to raise a five percent deposit
for first home boroers, they still need to demonstrate an
ability to service the loan, and this might be the
bigger challenge, especially considering lenders are still assessing borrowers to
repay their mortgages three percentage points higher and the going
interest rate, so that means, I mean mortgage rates at
(08:34):
the moment are generally sort of in the lower the
mid five percent range you needed paying back your mortgage
at least in theory on a mortgage rate above eight percent.
Speaker 1 (08:44):
And obviously the you know, the theory behind it is
good and the intention behind it's really good. But I
guess a lot of people are quite worried that what
it's going to mean is that, you know, we just
see those home prices skyrocket and it's going to be
more difficult I suppose for some to be able to
enter the market.
Speaker 2 (09:03):
Absolutely. I mean, this scheme does nothing to address the
underlying issues of housing affordability. It is a band aid
on the problem. So you'll find that a year from
now first home buyers are going to be nowhere near
better off. Housing has got to be more expensive, it'll
be less affordable. So it is a bit of a
(09:23):
popular policy that unfortunately doesn't really address the underlying issues.
We really need to be seeing more focus on getting
supplying to the marketplace and fixing a broken housing supply system.
Speaker 1 (09:35):
And tim how are things looking here in the Northern
Territory when you look at at our rental market, So
you're able to give us a bit of insight in
that space, Yeah.
Speaker 2 (09:44):
The rental market's burning at the moment, we've got a
vacancy rate across dar one of two point one percent
that's pretty close to record lows. Rents are rising at
nearly eight percent per annum. That's the strongest rental growth
of any capital city across the country as well, and
there's a little bit of acceleration underway as well. We
can see there's been a bit of a rebound and
never overseas migration as well. That's probably one of the
(10:06):
key factors that's contributing to the lower vacancy rate in
the pickup and mental growth as well well.
Speaker 1 (10:12):
Tim Lawless, it is always good to catch up with you.
I really appreciate your insight. I know our listeners do
as well. And yeah, it's an interesting week I suppose
when you look at the housing market and it will
be interesting to see what happens, as you know, as
this scheme continues on.
Speaker 2 (10:27):
Good to check Katie.
Speaker 1 (10:28):
Thanks for being Thanks Tim
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