Property Council of Australia's NT Executive Director Ruth Palmer says the property price cap of $600,000 for Darwin under the 5 per cent home deposit scheme needs to be increased after significant growth, adding that a lot a of homes are being snatched up before being listed and building would be a real challenge

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Episode Transcript

Speaker 1 (00:00):
Now we are continuing the discussion about growth in the
housing market in Darwin and the Federal government's five percent
home by a deposit scheme, with the Property Council of
Australia and Northern Territory Executive Director Ruth Palmer joining me
on the line. Good morning to your Ruth.

Speaker 2 (00:16):
Good morning, Katie. Ruth.

Speaker 1 (00:18):
We've spoken quite a bit about the property prices this
morning and spoken a bit over recent days as well
about this five percent home by a deposit scheme. How
rapidly have those house prices in Darwin like from the
Property Council's perspective, they seem to have increased quite a
bitch in recent months.

Speaker 2 (00:38):
Yeah, absolutely, Katie, And as you know, we do our
quarterly report now that is able to now track that
data but also look at the trends that are happening
and across the territory. We can say that those prices
have significantly jumped to one of the biggest in the
country and especially in places like Alice Springs as well.
We've seen that growth. The last quarter showed that the

(00:58):
growth was actually higher than and so we have seen
a quite a big increase in our median house prices
and our sales, and as we've spoken about before as well,
a lot of interest from those sort of those buyers,
agents and investors coming in because our rental returns up
here again are the best in the country and people
have now seen that they've cottoned onto it. And we've

(01:20):
seen that houses aren't even going to market in some instances,
so they don't even hit sort of real estate dot com.
So we are seeing that movement. So you know, with
this price cap, it it has left the territory stuck
at six hundred thousand, but we you know, we probably
do need to see an increase in that because we
are seeing that nextant jump.

Speaker 1 (01:39):
Ruzie I just got a message that real estate dot
Com this morning is showing a total of six standalone
houses in Darwin and Palmerston area currently listed under six
hundred thousand dollars. So yeah, yes, that's wild.

Speaker 2 (01:53):
Yeah, that's right. Yeah, And so I had a look
at it yesterday as well and saw the same numbers.
And so this is where we have to be really
stick around the cap, but also the choice of where
people want to live and also where they can live.
And some people don't want to go in kunits because
then of course you've got to pay body court fee,
so yes, they well under the six hundred thousand, but

(02:14):
there are those ongoing costs associated with a unit purchase.
But I just want to I've had a look at
the numbers of the cap in the other jurisdictions and
sort of we are the only cap that are the
price that stayed at six hundred thousand. The places like
you know, Tazzy, they went from six hundred thousand to
seven hundred. Queensland have gone from seven hundred thousand to

(02:35):
one million to their caps. South Australia's gone from six
hundred thousand, So what we're on now up to nine
hundred thousand. You know, we're sort of seeing that significant
jump and that borrowing capacity sort of change right across
Australia apart from the Northern Territory. And I dare say
it's because we did lag for such a long time,
but the significant growth we've had really needs to match that.

Speaker 1 (02:58):
It does sound as though the governments really just got
to take a look at maybe some of the more
up to date numbers. I mean, do you think that
they need to seriously have a look at this cap
and increase it like they've done in other major cities.

Speaker 2 (03:11):
Yeah, and I guess it's you know, getting Loot Gosling,
our federal member, to get down to Canberra as well.
And I've had a chat with Josh Burging about this
too to see what they can do from a sort
of anti government perspective. But what it means though is
we know in the territory people who buy here will
often stay. So if we can assist people in getting

(03:31):
into the homes, then they'll put down their routes, they'll
contribute to society, you know, they'll health the economy and
it keeps the people here. And we're talking about a
lot of the time population retention and attraction, the workforce,
you know, keeping people here and to build these houses,
we need a workforce. I know down in Catherine they
really struggle with that workforce and getting those houses built.

(03:54):
They can often take up to a year to build,
but it's because we don't have the workforce. But getting
people here to be able to do it is what
we need to do to be able to then create
that supply. I was listening to Tim so talking about
that supply and demand. Well, we need the people's skits
to build that supply and get these houses moving quicker.
But we need to have these schemes in place to

(04:14):
be able to support that.

Speaker 1 (04:16):
Well, and I guess we've got to really, you know,
not only take a look at that price cap so
that there's potentially more existing stock available, but also how
on earth are you meant to buy a block of
land and build a house front of six hundred k Well.

Speaker 2 (04:29):
That's right, and if you do that as well, Katie,
you've got to remember that while you're building that property,
you need somewhere to live. So effectively it's almost two properties,
so you're renting as well as you're building, and so
that's another strain on the back pocket of a territory
and as well so and again we've just heard from
Tim that the rental market is extremely tight, so in

(04:50):
order for people to buy, they need somewhere to go. So,
you know, it is really twofold in this situation, and
it is becoming a bit of a catch twenty two
to get these new builds up because people need somewhere
to live in the meantime, and they're double dipping. They're
paying off a mortgage but also paying rent. So you know,
maybe anti government might look next time in their budgets

(05:11):
around some kind of rental relief to be able to
support people in renting as they build, to increase that supply.

Speaker 1 (05:18):
Yeah, good point. Hey, I know that many are predicting
that this scheme is going to fuel house price growth
or maybe make prices go through the roots. I mean,
what kind of roof I should say, Ruth, what kind
of implications do you think that it could have.

Speaker 2 (05:37):
I think Katie is the lowest at the low for
a very long time, and we've seen very little growth
over the last sort of ten years, so I think
really we're just balancing the market and getting the market
to a situation where it should be. And people who
sort of bought it that peak impects times they're still
lower than what they bought at their mortgage, so you know,
they're stuck in that, you know, that mortgage jail as well,

(06:01):
so they can't sell their properties because their mortgages are
still too high. So I think it's all about balancing.
And I guess like the mink that goes on extra
to a mortgage just gets absorbed within that mortgage as well,
So it's you know, taking away that quick hit at
the beginning, and then that absorption comes later over that
twenty five to thirty years, which effectively is more affordable

(06:23):
for someone to then purchase a house as well. So
having these incentives gets people into the market, and if
it's absorbed over the long term, it's better than that
upfront costs right away that people may not have in
their back pockets. And I would say a lot of
people don't, like, you know, we don't just have sort
of that fifty sixty grand lying around to be able

(06:44):
to slap down to get a mortgage.

Speaker 1 (06:46):
Especially first time buyer. You know, it's difficult.

Speaker 2 (06:50):
Yeah, that's right. And I was pretty lucky when I
first built and bought a house in Zacoli. I got
the twenty five thousand dollars first paymnents grant. But I
was really lucky at the time as a single of two.
My builder was paying my rent for up to They
had a scheme where they paid my rent for up
to five months of the build, so up to five
hundred dollars a week. I got my rent covered so

(07:11):
I could actually build my house in it and it
enabled me to be able to then be secure in
the territory, have my own property, support my two children.
But I was supported at the time through my builder
who had a very good scheme, and you know, if
they if they didn't have that, there is no way
I would have had a property in the territory.

Speaker 1 (07:30):
That is really interesting. And there's not something like that
operating in the territory at the moment as far as
you know, no.

Speaker 2 (07:37):
And I think it was just this little particular builder
that was doing it at the time. And yeah, so
there is no way I could have done a mortgage
and rent as a single mum of two. So to
me that was a note that was just a winner.

Speaker 1 (07:51):
And a lot of other people are being in a
similar situation to Ruth. And you know, if we're serious
about sort of trying to get people into their own homes,
so I guess we've got to think a little innovatively.

Speaker 2 (08:01):
But yeah, sometimes it's not just having a grant. Sometimes
it is about those other additional costs that someone has
to put me, like things like rank. Yeah, you know,
so these are schemes that potentially governments can look at,
and you know, especially the Northern Territory government as well
for their upcoming budgets.

Speaker 1 (08:19):
Well. Ruth Palmer from the Property Council of Australia, the
Anti executive director. Really good to speak with you this morning.
I appreciate your time.

Speaker 2 (08:27):
Yeah, thanks a lot, Katie, thank you.