Domain's Chief of Research and Economics Nicola Powell says there’s been an uptick in house prices across all capital cities in the last quarter and while Darwin had the weakest growth, unit prices increased by almost $21,000 sitting at just under $390,000, an eight-year high

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Episode Transcript

Speaker 1 (00:00):
Australia's property market is roaring back to life, with all
eight capital cities posting simultaneous house price growth for the
first time in four years. That is according to Domain's
House Price report for the June quarter. Now, what followed
a sluggish twenty twenty four the latest report reveals a
sharp acceleration of property prices, powered by the Reserve Bank

(00:22):
of Australia's shift into a rate cutting cycle. Now joining
us on the line to break it all down is
the Chief of Research and Economics, Nicola Pale. Good morning
to you, Nicola.

Speaker 2 (00:37):
Very good morning.

Speaker 1 (00:38):
Now talk me through the key findings.

Speaker 2 (00:41):
So we have found that price momentum is back across
Australia's housing market and as you mentioned, we have got
growth across every single capital city over the June quarter,
both for houses and for units, so it is a
unanimous upswinging price We saw many of our capital cities
actually accelerate in terms of their price growth, and as
you mentioned, you know it's the first time in four

(01:01):
years we've seen house prices rise across every single capital
city over a quarter, and for units it's the first
time in two years. So it really shows that we
are seeing not only that price momentum is back, but
we're starting to see a bit of a shift between
the cities that are really seeing the stronger rates of
growth compared to ones that aren't.

Speaker 1 (01:19):
Nicolas, which markets really lead the rebound in those house prices.

Speaker 2 (01:25):
So we have seen a start change coming out of
Sydney and also Melbourne, and the way our describer is,
we have seen price growth shift from those affordable markets
such as Adelai, Perth and Brisbane which really did lead
price growth in recent years, and it has moved towards
and shifted towards those more interest rate sensitive markets. So

(01:46):
we're seeing much stronger rates of growth coming out of
Sydney as an example, and you tend to find those
big capital cities are a bit more reactive to changes
in the cash rate and economic conditions. So yeah, prices
arising and have seen a much greater rebound in Sydney
and Melbourne.

Speaker 1 (02:03):
Nikola were people sort of surprised. I guess we got
that rate cut, then we sort of thought another one
was coming, and then it didn't happen last time round.
I mean, did that change things in any way?

Speaker 2 (02:15):
I think the rate cuts that we have seen have
boosted confidence, and I think it's given a little bit
of an instant boost to demand. You know, when you
look at clearance rates nationally, they're at sixty five percent
and that's actually a two year high, So that in
itself tells us that demand is starting to come back.
An overall supply has now dropped to a five months low.
So when you look at boring capacities, boring capacity on

(02:36):
average for your average Australian household is now five percent
higher compared to what it was back in January. And
I do think that's given a bit of a you know,
a bit of a spark back to buyers, a bit
more confidence, deeper pockets obviously to make another beard at auction.
And I think that we are seeing momentum come back
into many capital cities NIGLA.

Speaker 1 (02:57):
In terms of Darwin, what did we say, what did
the figures show for Darwin when it comes to those
house prices.

Speaker 2 (03:04):
So we saw a marginal increase. So actually the quarterly
change in Darwin was the weakest out of all of
our major capital cities. It's just not slightly higher, So
that one thousand dollars was added to the median house
price over the June quarter, and that house price is
just under five hundred and eighty thousand dollars. But what
I think is interesting is the house prices, we are

(03:24):
starting to see a bit of a slowdown in the
pace of price gains, but it's the flip opposite. For
unit prices in Darwin. We saw them jump by almost
twenty one thousand dollars in the June quarter alone. They're
now sitting at just under three hundred and ninety thousand dollars.
But in terms of that price point the units, that's
now at an eight year high for Darwin.

Speaker 1 (03:43):
And why do you reckon that is? Why do you
think we sort of saw on the a slight increase
when it comes to the house prices, but then with
the units it was it was much greater.

Speaker 2 (03:52):
I think for me, it really demonstrates where the demand
pressures are. I mean, units are mostly in the inner
suburbs of Darwin CBD location. I think it's probably reflective
of the interest from investors and particularly from interstate investors.
You know, if you're not local to the area, you
tend to go to those real kind of higher density

(04:12):
locations of CBD locations, and you know, investors tend to
also steer towards units, and there might be a bit
of an affordability play occurring here too, where you know,
people are priced out of purchasing a house and then
they shift towards purchasing a unit.

Speaker 1 (04:26):
Nichola, I know you don't have a crystal ball, but
I know you are somebody that certainly looks at this
data and these numbers all the time. What's the road
ahead look like? Do you think so?

Speaker 2 (04:35):
I do think that we are going to continue to
see price growth. I do think it is going to
be a bit diverse across our different capital cities. You know,
we still have robust rates of population growth, We've got
investors coming back in, and ultimately the cour thing here
is we've got a lack of new homes being built.
You know, when you look at completions, it's running below
population growth. So our expectations for the rest for this

(04:57):
financial year, our prices are going to run, but I
would describe them as a more of a modest pace
of growth. I don't think it's going to be boom
time scenarios, but we are expecting prices to edge.

Speaker 1 (05:07):
Hire Well Domain Chief of Research and Economics, Nicola Pale,
really appreciate your time this morning. Thanks for having a
chat with us, Thank you, Thanks so much.