Episode Transcript
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Speaker 1 (00:00):
Now, Darwin's housing market is reportedly heating up, with house
prices now at their highest level in nearly a decade.
Domain's latest house price report shows that Darwin's house prices
rose five point three percent in the September quarter. That
is up more than thirty three thousand dollars, bringing the
median to nearly six hundred and fifty seven thousand. It
(00:23):
is part of a national trend. Now joining us on
the line to talk more about this is DOMAIN senior
economist doctor Joel Bowman. Good morning to you.
Speaker 2 (00:32):
Joel, good morning, thank you for having me.
Speaker 1 (00:35):
Yeah, lovely to have you on the show. Joel tell us,
we'll talk us through the numbers. First off, the house
price increases and then the units.
Speaker 2 (00:44):
Yeah, So in terms of the house prices, as you
mentioned for Darwin, upper staggering five point three percent in
the September quarter alone to each six hundred and fifty
seven thousand, So that's the highest level in over a decade.
So house price is now just three percent below the
twenty thirteen peak. And for unit prices they jump even stronger,
(01:06):
so six point five percent in the September quarter to
reach a median of three hundred and eighty nine thousand dollars,
so that's upper saggering twelve percent over the year, but
that still remains about twenty percent below it's twenty and
sixteen peak.
Speaker 1 (01:21):
What's behind the momentum in the top ends market at
the moment.
Speaker 2 (01:26):
Look, I think overall, if we have seen a big
pickup in momentum across Australia's capital cities, so across house
prices across Australia's combined capital cities are rising at the
fastest pace in nearly four years. With the last quarter
nearly every capital city saw price gains for both houses
and units except for the unit market in Canberra. So
(01:46):
I think overall what's supporting that big pickup in momentum
is the three RBA interest rate cuts this year and
prospects of more to come, rising consumer confidence, low levels
of supply are all driving house in unit price across Australia.
Some of those factors are a little bit even even
stronger in the Darwin market. So particularly on the supply front,
(02:08):
listings are down and staggering thirty percent compared to the
same time last year, so there's just not a lot
of supply out there. There's more buyers that are becoming
more active, and so all of that is resulting in
pretty strong price growth.
Speaker 1 (02:21):
So down thirty percent that supply. Is that just for
Darwin or is that sort of in other more regional
parts as well, or do you just look at it
more from the territory perspective, So that.
Speaker 2 (02:31):
Is that that is just for Darwin alone, for just
comparing so the month of September listings are down about
thirty percent compared to the same time last year. So
there's not a lot of supply at the moment. No.
Speaker 1 (02:44):
I mean, if you're an avid real estate watcher, and
I do like to look on real estate dot Com,
I'm not ashamed to say to have a good look
at what's around, but there is not a lot for sale,
particularly sort of standalone houses. And then when you look
at those prices as as you've said, and as the
figures show, they're definitely on the rise. Yeah.
Speaker 2 (03:06):
Absolutely, So it is challenging for you know, you know,
home buyers that are looking to get their foot on
the ladder. Is very challenging, and it's also challenging for
renters as well, and I think that's that's being a
big draw card as well for potentially investors in the
Darwin markets. So the vacancy rates still remain very low,
and I think overall, the yields, which means that ren's
(03:29):
relative to home prices is quite attractive in Darwin relative
to some of the other kind of capital cities. So
I think that's potentially drawing in more more interstate investors.
Speaker 1 (03:39):
Yeah, well, that was going to be my next question.
Do you reckon we are seeing people from interstate wanting
to snap up property here in the NT.
Speaker 2 (03:47):
Yeah, I mean it's certainly hard to get good timely
reads on it, but I wouldn't be surprised. So if
we're looking at just those those yields alone, so again
that just is your rent's relative to your home prices.
It's about six percent in for houses seven point eight
percent in Darwin, and that's really high compared to what
you get in the combined capitals where it typically is
(04:08):
sits closer to that three and five percent level, respectively.
So if you know, for investors looking for a more
kind of cash flow, Darwin looks very attractive relative to
other cities.
Speaker 1 (04:19):
And so then when you look at those unit prices
rising sort of even faster than the houses at the moment.
Are we seeing a shift in buyer behavior with those
affordability pressures as well?
Speaker 2 (04:30):
Yeah, absolutely so we're definitely seeing that in some other
pockets as well as such as Brisbane. So we're seeing
stronger price gains in a unit market compared to the
compared to the home price market. So, as you mentioned,
affordability constraints are becoming a lot more pressing and I
think that's increasingly kind of shifting buyers to the more
affordable properties, which tend to be you know, more of
(04:53):
the units supplies not picking up in a material way,
and so that's resulting in yeah, more more competition essentially
for the more affordable properties, and I think units are
benefiting from that.
Speaker 1 (05:05):
Yeah, Joel, I know this is probably a tough question
to answer. You don't have a crystal ball, but are
we expecting Darwin's growth to continue in twenty twenty six
or do we think that there is going to be
a bit of a slow down on the horizon.
Speaker 2 (05:21):
Look, I mean that's a good one. So I think
in terms of the sharp rises that we've seen in
September quarter alone, I think it's going to be really
hard to sustain that. But I think Overall, some of
those drivers of those strong price price games over the
last year, I think they're likely to be sustained over
the next year or so. So, as I mentioned with
interest rate cuts, there's prospects of more to come, rising
(05:44):
consumer confidence and that low levels of supply. In addition
to that, you've also got the expansion of some of
the first home first home buyers schemes, particularly the home
guarantee scheme, so people can get in with a five
percent deposit without needing to pay for that expensive lender's
mortgage insurance. So I think all of that will result
(06:05):
in more first time buyers potentially going through open home.
So big increase in first time buyers. Supply is not
going to pick up in a big way in the
near term, and so I think that will add to
some of the price pressures over the next year or so.
Speaker 1 (06:18):
Yeah, we've had a lot of discussion as well on
this show over recent weeks about the first home buyers
because for us here in the NT that cap is
at six hundred thousand. But now you know, we've got
the median house price at the moment, as your figures
have shown at six hundred and fifty seven and then
we're talking about you know, those supplies, like the supply
being quite low, it will make it difficult, you would
(06:41):
suspect for first time buyers to be able to access
that scheme or to enter the market. The way that
things are tracking.
Speaker 2 (06:49):
Look sir, that's definitely that the meeting, and I think
in terms of having that threshold slightly below the meeting
is something that we typically see in a lot of
the other other cities as well. So I think, thank
you're still by lunch, is still a good proportion of
properties that people can still get in under that price cap,
particularly and in the unit market as well, So I
(07:10):
suspect that there will be a lot of competition for
properties under those price cap.
Speaker 1 (07:16):
Yeah, for sure. Well, Domain Senior Economists, Doctor Joel Bowman,
I was about to call you, Darwin Senior Economists, Domain
Senior Economist, Joel lovely to speak to you this morning, mate,
Thanks so much for your time.
Speaker 2 (07:29):
Thanks for having me. Thank you
Now, Darwin's housing market is reportedly heating up, with house
prices now at their highest level in nearly a decade.
Domain's latest house price report shows that Darwin's house prices
rose five point three percent in the September quarter. That
is up more than thirty three thousand dollars, bringing the
median to nearly six hundred and fifty seven thousand. It
(00:23):
is part of a national trend. Now joining us on
the line to talk more about this is DOMAIN senior
economist doctor Joel Bowman. Good morning to you.
Speaker 2 (00:32):
Joel, good morning, thank you for having me.
Speaker 1 (00:35):
Yeah, lovely to have you on the show. Joel tell us,
we'll talk us through the numbers. First off, the house
price increases and then the units.
Speaker 2 (00:44):
Yeah, So in terms of the house prices, as you
mentioned for Darwin, upper staggering five point three percent in
the September quarter alone to each six hundred and fifty
seven thousand, So that's the highest level in over a decade.
So house price is now just three percent below the
twenty thirteen peak. And for unit prices they jump even stronger,
(01:06):
so six point five percent in the September quarter to
reach a median of three hundred and eighty nine thousand dollars,
so that's upper saggering twelve percent over the year, but
that still remains about twenty percent below it's twenty and
sixteen peak.
Speaker 1 (01:21):
What's behind the momentum in the top ends market at
the moment.
Speaker 2 (01:26):
Look, I think overall, if we have seen a big
pickup in momentum across Australia's capital cities, so across house
prices across Australia's combined capital cities are rising at the
fastest pace in nearly four years. With the last quarter
nearly every capital city saw price gains for both houses
and units except for the unit market in Canberra. So
(01:46):
I think overall what's supporting that big pickup in momentum
is the three RBA interest rate cuts this year and
prospects of more to come, rising consumer confidence, low levels
of supply are all driving house in unit price across Australia.
Some of those factors are a little bit even even
stronger in the Darwin market. So particularly on the supply front,
(02:08):
listings are down and staggering thirty percent compared to the
same time last year, so there's just not a lot
of supply out there. There's more buyers that are becoming
more active, and so all of that is resulting in
pretty strong price growth.
Speaker 1 (02:21):
So down thirty percent that supply. Is that just for
Darwin or is that sort of in other more regional
parts as well, or do you just look at it
more from the territory perspective, So that.
Speaker 2 (02:31):
Is that that is just for Darwin alone, for just
comparing so the month of September listings are down about
thirty percent compared to the same time last year. So
there's not a lot of supply at the moment. No.
Speaker 1 (02:44):
I mean, if you're an avid real estate watcher, and
I do like to look on real estate dot Com,
I'm not ashamed to say to have a good look
at what's around, but there is not a lot for sale,
particularly sort of standalone houses. And then when you look
at those prices as as you've said, and as the
figures show, they're definitely on the rise. Yeah.
Speaker 2 (03:06):
Absolutely, So it is challenging for you know, you know,
home buyers that are looking to get their foot on
the ladder. Is very challenging, and it's also challenging for
renters as well, and I think that's that's being a
big draw card as well for potentially investors in the
Darwin markets. So the vacancy rates still remain very low,
and I think overall, the yields, which means that ren's
(03:29):
relative to home prices is quite attractive in Darwin relative
to some of the other kind of capital cities. So
I think that's potentially drawing in more more interstate investors.
Speaker 1 (03:39):
Yeah, well, that was going to be my next question.
Do you reckon we are seeing people from interstate wanting
to snap up property here in the NT.
Speaker 2 (03:47):
Yeah, I mean it's certainly hard to get good timely
reads on it, but I wouldn't be surprised. So if
we're looking at just those those yields alone, so again
that just is your rent's relative to your home prices.
It's about six percent in for houses seven point eight
percent in Darwin, and that's really high compared to what
you get in the combined capitals where it typically is
(04:08):
sits closer to that three and five percent level, respectively.
So if you know, for investors looking for a more
kind of cash flow, Darwin looks very attractive relative to
other cities.
Speaker 1 (04:19):
And so then when you look at those unit prices
rising sort of even faster than the houses at the moment.
Are we seeing a shift in buyer behavior with those
affordability pressures as well?
Speaker 2 (04:30):
Yeah, absolutely so we're definitely seeing that in some other
pockets as well as such as Brisbane. So we're seeing
stronger price gains in a unit market compared to the
compared to the home price market. So, as you mentioned,
affordability constraints are becoming a lot more pressing and I
think that's increasingly kind of shifting buyers to the more
affordable properties, which tend to be you know, more of
(04:53):
the units supplies not picking up in a material way,
and so that's resulting in yeah, more more competition essentially
for the more affordable properties, and I think units are
benefiting from that.
Speaker 1 (05:05):
Yeah, Joel, I know this is probably a tough question
to answer. You don't have a crystal ball, but are
we expecting Darwin's growth to continue in twenty twenty six
or do we think that there is going to be
a bit of a slow down on the horizon.
Speaker 2 (05:21):
Look, I mean that's a good one. So I think
in terms of the sharp rises that we've seen in
September quarter alone, I think it's going to be really
hard to sustain that. But I think Overall, some of
those drivers of those strong price price games over the
last year, I think they're likely to be sustained over
the next year or so. So, as I mentioned with
interest rate cuts, there's prospects of more to come, rising
(05:44):
consumer confidence and that low levels of supply. In addition
to that, you've also got the expansion of some of
the first home first home buyers schemes, particularly the home
guarantee scheme, so people can get in with a five
percent deposit without needing to pay for that expensive lender's
mortgage insurance. So I think all of that will result
(06:05):
in more first time buyers potentially going through open home.
So big increase in first time buyers. Supply is not
going to pick up in a big way in the
near term, and so I think that will add to
some of the price pressures over the next year or so.
Speaker 1 (06:18):
Yeah, we've had a lot of discussion as well on
this show over recent weeks about the first home buyers
because for us here in the NT that cap is
at six hundred thousand. But now you know, we've got
the median house price at the moment, as your figures
have shown at six hundred and fifty seven and then
we're talking about you know, those supplies, like the supply
being quite low, it will make it difficult, you would
(06:41):
suspect for first time buyers to be able to access
that scheme or to enter the market. The way that
things are tracking.
Speaker 2 (06:49):
Look sir, that's definitely that the meeting, and I think
in terms of having that threshold slightly below the meeting
is something that we typically see in a lot of
the other other cities as well. So I think, thank
you're still by lunch, is still a good proportion of
properties that people can still get in under that price cap,
particularly and in the unit market as well, So I
(07:10):
suspect that there will be a lot of competition for
properties under those price cap.
Speaker 1 (07:16):
Yeah, for sure. Well, Domain Senior Economists, Doctor Joel Bowman,
I was about to call you, Darwin Senior Economists, Domain
Senior Economist, Joel lovely to speak to you this morning, mate,
Thanks so much for your time.
Speaker 2 (07:29):
Thanks for having me. Thank you
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