Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
As I mentioned, we know that domain's latest report on
house prices has shown another quarter of gains for house
and unit prices, marking the seventh consecutive increase for houses
and the sixth for units, both reaching a record high.
But the slowdown in house price growth nationally is becoming
more pronounced, while the slowdown on unit price growth is
(00:22):
more gradual. Darwin and Hobart were the only cities to
accelerate their quarterly growth but have struggled to enter a
recovery phase like that of other cities. Now joining us
on the line to break down the findings and well
tell us a little bit more about the information is
domain's chief of Research and Economics, doctor Nicola Powell. Good
(00:45):
morning to you, Nikola. Let's try that again. Hopefully I'm
able to get her. Can you hear me this morning? Nikola? Oh?
Speaker 2 (00:53):
I can there you are connections.
Speaker 1 (00:55):
Lovely to have you on the show. Thank you so
much for your time. Now, can you talk me through
the situation for house prices in Darwin. From the latest
quarter so.
Speaker 2 (01:05):
We have seen house prices in Darwin increase. They increase
about twenty six thousand dollars over the September cousia. So
they're currently sitting at roughly five hundred and ninety thousand dollars.
But what we have seen is a bit of volatility
really over the last kind of twelve to eighteen months
coming out of pricing across the Darwin's property market. We
(01:25):
have seen an increase for house prices this quarter, but
it is the opposite for unit prices. They did drop.
They declined now for the third and six consecutive corsia
and when you look at the annual decline, it was
almost ten percent, which is the steepest annual decline we've
seen for unit prices in four and a half years
for Darwin.
Speaker 1 (01:42):
Wow. And so what kind of you know, what kind
of factors come into play here?
Speaker 2 (01:48):
I think it is a variety of different things. You know,
we have seen a cash rate higher for longer and
I think that is kind of keeping buyers on the
sidelines obviously restricts burrowing capacity. And I think well, with
the respect of rate cuts coming, you know, perhaps as
early as February next year, I think people are waiting
for those rate cuts. There are some other things that
are quite unique to the Northern territory too, and what
(02:10):
we have got is quite a deep drain a way
of population to other states and territories. So what I
mean by that is there are more people leaving the
Northern Territory to other states and territories than are arriving.
So it's a drain away. It's a loss of population.
And when you have a look at it, the recent
quarters have actually been a record drain away. So when
(02:31):
you've got that negative flow of population obviously weighs in
negatively on housing demands. You need less homes if you're
seeing people move out. So I think that is weighing in,
particularly so on Darwin's housing market.
Speaker 1 (02:43):
Yeah, right, And so in terms of any you know,
any sort of increases, what are we saying at the moment.
Speaker 2 (02:51):
What's interesting though, is when you drill down into different
suburbs across Darwin, we have got some areas that are
increasing and some areas that have actually gone sight way.
So Stuart Park units and Stuart Park we're up six
percent over the last year, is it? Murr heads Yeah,
seven hundred and thirty medium house price they pretty much
did nothing. They went sideways over the last twelve months.
(03:14):
So there is some different dynamics depending upon the different
suburbs across Starwin and I really think this is so
important anyone looking to get into the housing market. We
talk nationally and we talk about our capital cities. We
also have to remember there are property market dynamics going
on at that suburb level too, So it's really important
you know that those localized dynamics.
Speaker 1 (03:35):
And so I mean when you touched on there Stuart
Park and also Newer Head, are there any are there
any areas that are any others that are performing quite
well at this point or any to sort of you know,
have a look at.
Speaker 2 (03:48):
They're really pretty much the only ones that have seen
an increase, is it Linyar, Yeah, that's it. They always
challenge me with these, you know, these suburb names or
that suburb has also gone sideways over the last twelve months.
But we've got some areas where we have seen some decline.
(04:08):
So unit prices in Perap we're down by six percent
in the last twelve months Nightcliff as well, we're down
by about three percent for unit prices. So there is
a bit of diversity going on across the suburbs of Darling.
Speaker 1 (04:21):
And in terms of I mean you touched on some
of those factors that come into play in that population
drain probably having a bit of an impact, you know,
I suppose for a lot of us, you know, we're
maybe feeling slightly more positive on the ground at the moment,
but you know, how soon do you think we might
start to see some movement when you look at things
like those interest rates. I mean, it's like, it's hard
(04:43):
to tell, isn't it.
Speaker 2 (04:45):
We look, it is hard to tell, and I think
it is a bit too early to say precisely. You know,
rate cuts are going to happen this calendar year. I
think it's much more likely to happen next year. There
are still a few hot spots in terms of inflation
pressure points, and we've got to remember still has a
really hot jobs market. We have one of the strongest
jobs markets in the developed world, and we've also seen
(05:07):
a bouncing consumer confidence. These will all be weighing in
the RBA's mind, and that's why I don't think we're
going to see them move. The big four banks have
brought forward their expectations to rate cuts to about February,
but we know we've done analysis on this to look
at what happens if the cash rate is cut, or
what happens if the cash rate has increased, it does
impact poverty prices because it obviously impacts boring capacity. And
(05:30):
so if we do see rates being cut, what we're
likely to see is it will have a positive influence
on prices. That influence is probably likely to be larger
in our really expensive capital cities where boring capacity is
really important, such as the Sydney's that has that medium
house price of one point six million dollars. But it
does play out positively when you see cash rate cuts
(05:53):
coming through. It does play out positively for momentum in
our housing market.
Speaker 1 (05:57):
So, Nikola, what is our what in dam and what
is the median house price at this point?
Speaker 2 (06:03):
When you have a look at the median house price
in Darwin, it's just it's five hundred and ninety thousand
dollars for a house and for a unit it's sitting
at just over three hundred and thirty thousand dollars. So
I mean Darwin is the most affordable place, affordable capital
city I should say to purchase a house or a
unit in Australia.
Speaker 1 (06:22):
Tell us, you know, tell us what is happening in
some of those other major cities, because some of them
are absolutely gangbusters at the moment, aren't they? And so high,
like the prices are inside and yeah, look the prices
are eyewatering.
Speaker 2 (06:34):
You know, Sydney's as I said, one point sixty five million,
you've got it is a bit diverse across the cities.
Most cities are still seeing increases in price. But what
we've got is a clear slowdown. So what that means
is prices are rising, they're just not rising as fast
as they were. And I think what's quite remarkable at
the moment we currently have three capital cities with a
(06:57):
median house price above a million dollars. So that's Sydney,
it's Melbourne, and it's Canberra. But we have got Brisbane
and Adelaide really hot on their hills to join the
million dollar club. Their median house price in Brisbane and
Adelaide is very close to achieving that million dollars. In Brisbane,
the median house price is nine hundred and ninety five thousand.
(07:18):
Very likely that Brisbane and Adelaide are going to join
that million dollar club by the end of this calendar year.
Speaker 1 (07:24):
And look, I guess that's great if you own a
home or if you're you know, maybe looking at selling
your home. But for some of those first home buyers, Gee,
it must be hard trying to get into the market.
Speaker 2 (07:34):
It is challenging for first home buyers. And I think
that you know, when price is arising. We've seen strong
rates of price growth when you look at the changing
price since March twenty twenty. You know, when you look
at Adelaide Brisbane, they've seen sixty seventy, you know, eighty
a increase in price over that period of time and
it's I think it's really disheartening, you know, when you're
unable to keep up with price growth. I think for
(07:56):
any first home buyer out there, you know, Forbility can't
there are pockets of affordability. Units are obviously much lower
in price points and they just haven't seen such greater
rates of price growth as houses. And we do have
more affordability in some of our smaller capital cities. You know,
Darwin is up there in terms of affordability stakes. You
(08:17):
know Hobart as well. Adelaide has always been known as
that more affordable market, but I think that has changed
during the pandemic.
Speaker 1 (08:25):
Nikola I knows it. And look, you may not have
this background, but the government here the new government, they've
offered a range of grants for first time buyers and
those wanting a fresh start. I mean, what's your take
on things like that.
Speaker 2 (08:39):
We do need to make sure we have the right
policies in place to help first and buyers, you know,
get a foot onto the property ladder, particularly when they're
facing really tight rental conditions, which has really been the
ear mark of our rental markets over the last few years.
The thing is, when you have a cash incentive, and
particularly if it's got a time deadline, what that creates
is it pulls forward a whole lot of first home
(09:01):
buyer demand. And all of these first home buyers are
fighting for the same amount of properties available, and they're
all going for similar price points. So what you tend
to find if you are boosting someone's ability to pay
for a home by a financial incentive, that tends to
just add to property prices, and you tend to see
an elevation. It tends to drive prices higher. I think,
(09:23):
you know really what we need to see and we're
seeing this, you know, at that federal level with the
housing cord it needs to be about supply. We need
to build more homes in the right areas, creating affordable supply.
We haven't met population growth in terms of building enough
homes to meet population growth. That is the solution, not
giving people cash.
Speaker 1 (09:42):
Yeah, well, look, I really appreciate your time this morning.
As always love having a chat with you. Thanks so
much for having a chat with me this morning, Nicola,
and we will talk to you soon.
Speaker 2 (09:52):
Thank you, thank you.
As I mentioned, we know that domain's latest report on
house prices has shown another quarter of gains for house
and unit prices, marking the seventh consecutive increase for houses
and the sixth for units, both reaching a record high.
But the slowdown in house price growth nationally is becoming
more pronounced, while the slowdown on unit price growth is
(00:22):
more gradual. Darwin and Hobart were the only cities to
accelerate their quarterly growth but have struggled to enter a
recovery phase like that of other cities. Now joining us
on the line to break down the findings and well
tell us a little bit more about the information is
domain's chief of Research and Economics, doctor Nicola Powell. Good
(00:45):
morning to you, Nikola. Let's try that again. Hopefully I'm
able to get her. Can you hear me this morning? Nikola? Oh?
Speaker 2 (00:53):
I can there you are connections.
Speaker 1 (00:55):
Lovely to have you on the show. Thank you so
much for your time. Now, can you talk me through
the situation for house prices in Darwin. From the latest
quarter so.
Speaker 2 (01:05):
We have seen house prices in Darwin increase. They increase
about twenty six thousand dollars over the September cousia. So
they're currently sitting at roughly five hundred and ninety thousand dollars.
But what we have seen is a bit of volatility
really over the last kind of twelve to eighteen months
coming out of pricing across the Darwin's property market. We
(01:25):
have seen an increase for house prices this quarter, but
it is the opposite for unit prices. They did drop.
They declined now for the third and six consecutive corsia
and when you look at the annual decline, it was
almost ten percent, which is the steepest annual decline we've
seen for unit prices in four and a half years
for Darwin.
Speaker 1 (01:42):
Wow. And so what kind of you know, what kind
of factors come into play here?
Speaker 2 (01:48):
I think it is a variety of different things. You know,
we have seen a cash rate higher for longer and
I think that is kind of keeping buyers on the
sidelines obviously restricts burrowing capacity. And I think well, with
the respect of rate cuts coming, you know, perhaps as
early as February next year, I think people are waiting
for those rate cuts. There are some other things that
are quite unique to the Northern territory too, and what
(02:10):
we have got is quite a deep drain a way
of population to other states and territories. So what I
mean by that is there are more people leaving the
Northern Territory to other states and territories than are arriving.
So it's a drain away. It's a loss of population.
And when you have a look at it, the recent
quarters have actually been a record drain away. So when
(02:31):
you've got that negative flow of population obviously weighs in
negatively on housing demands. You need less homes if you're
seeing people move out. So I think that is weighing in,
particularly so on Darwin's housing market.
Speaker 1 (02:43):
Yeah, right, And so in terms of any you know,
any sort of increases, what are we saying at the moment.
Speaker 2 (02:51):
What's interesting though, is when you drill down into different
suburbs across Darwin, we have got some areas that are
increasing and some areas that have actually gone sight way.
So Stuart Park units and Stuart Park we're up six
percent over the last year, is it? Murr heads Yeah,
seven hundred and thirty medium house price they pretty much
did nothing. They went sideways over the last twelve months.
(03:14):
So there is some different dynamics depending upon the different
suburbs across Starwin and I really think this is so
important anyone looking to get into the housing market. We
talk nationally and we talk about our capital cities. We
also have to remember there are property market dynamics going
on at that suburb level too, So it's really important
you know that those localized dynamics.
Speaker 1 (03:35):
And so I mean when you touched on there Stuart
Park and also Newer Head, are there any are there
any areas that are any others that are performing quite
well at this point or any to sort of you know,
have a look at.
Speaker 2 (03:48):
They're really pretty much the only ones that have seen
an increase, is it Linyar, Yeah, that's it. They always
challenge me with these, you know, these suburb names or
that suburb has also gone sideways over the last twelve months.
But we've got some areas where we have seen some decline.
(04:08):
So unit prices in Perap we're down by six percent
in the last twelve months Nightcliff as well, we're down
by about three percent for unit prices. So there is
a bit of diversity going on across the suburbs of Darling.
Speaker 1 (04:21):
And in terms of I mean you touched on some
of those factors that come into play in that population
drain probably having a bit of an impact, you know,
I suppose for a lot of us, you know, we're
maybe feeling slightly more positive on the ground at the moment,
but you know, how soon do you think we might
start to see some movement when you look at things
like those interest rates. I mean, it's like, it's hard
(04:43):
to tell, isn't it.
Speaker 2 (04:45):
We look, it is hard to tell, and I think
it is a bit too early to say precisely. You know,
rate cuts are going to happen this calendar year. I
think it's much more likely to happen next year. There
are still a few hot spots in terms of inflation
pressure points, and we've got to remember still has a
really hot jobs market. We have one of the strongest
jobs markets in the developed world, and we've also seen
(05:07):
a bouncing consumer confidence. These will all be weighing in
the RBA's mind, and that's why I don't think we're
going to see them move. The big four banks have
brought forward their expectations to rate cuts to about February,
but we know we've done analysis on this to look
at what happens if the cash rate is cut, or
what happens if the cash rate has increased, it does
impact poverty prices because it obviously impacts boring capacity. And
(05:30):
so if we do see rates being cut, what we're
likely to see is it will have a positive influence
on prices. That influence is probably likely to be larger
in our really expensive capital cities where boring capacity is
really important, such as the Sydney's that has that medium
house price of one point six million dollars. But it
does play out positively when you see cash rate cuts
(05:53):
coming through. It does play out positively for momentum in
our housing market.
Speaker 1 (05:57):
So, Nikola, what is our what in dam and what
is the median house price at this point?
Speaker 2 (06:03):
When you have a look at the median house price
in Darwin, it's just it's five hundred and ninety thousand
dollars for a house and for a unit it's sitting
at just over three hundred and thirty thousand dollars. So
I mean Darwin is the most affordable place, affordable capital
city I should say to purchase a house or a
unit in Australia.
Speaker 1 (06:22):
Tell us, you know, tell us what is happening in
some of those other major cities, because some of them
are absolutely gangbusters at the moment, aren't they? And so high,
like the prices are inside and yeah, look the prices
are eyewatering.
Speaker 2 (06:34):
You know, Sydney's as I said, one point sixty five million,
you've got it is a bit diverse across the cities.
Most cities are still seeing increases in price. But what
we've got is a clear slowdown. So what that means
is prices are rising, they're just not rising as fast
as they were. And I think what's quite remarkable at
the moment we currently have three capital cities with a
(06:57):
median house price above a million dollars. So that's Sydney,
it's Melbourne, and it's Canberra. But we have got Brisbane
and Adelaide really hot on their hills to join the
million dollar club. Their median house price in Brisbane and
Adelaide is very close to achieving that million dollars. In Brisbane,
the median house price is nine hundred and ninety five thousand.
(07:18):
Very likely that Brisbane and Adelaide are going to join
that million dollar club by the end of this calendar year.
Speaker 1 (07:24):
And look, I guess that's great if you own a
home or if you're you know, maybe looking at selling
your home. But for some of those first home buyers, Gee,
it must be hard trying to get into the market.
Speaker 2 (07:34):
It is challenging for first home buyers. And I think
that you know, when price is arising. We've seen strong
rates of price growth when you look at the changing
price since March twenty twenty. You know, when you look
at Adelaide Brisbane, they've seen sixty seventy, you know, eighty
a increase in price over that period of time and
it's I think it's really disheartening, you know, when you're
unable to keep up with price growth. I think for
(07:56):
any first home buyer out there, you know, Forbility can't
there are pockets of affordability. Units are obviously much lower
in price points and they just haven't seen such greater
rates of price growth as houses. And we do have
more affordability in some of our smaller capital cities. You know,
Darwin is up there in terms of affordability stakes. You
(08:17):
know Hobart as well. Adelaide has always been known as
that more affordable market, but I think that has changed
during the pandemic.
Speaker 1 (08:25):
Nikola I knows it. And look, you may not have
this background, but the government here the new government, they've
offered a range of grants for first time buyers and
those wanting a fresh start. I mean, what's your take
on things like that.
Speaker 2 (08:39):
We do need to make sure we have the right
policies in place to help first and buyers, you know,
get a foot onto the property ladder, particularly when they're
facing really tight rental conditions, which has really been the
ear mark of our rental markets over the last few years.
The thing is, when you have a cash incentive, and
particularly if it's got a time deadline, what that creates
is it pulls forward a whole lot of first home
(09:01):
buyer demand. And all of these first home buyers are
fighting for the same amount of properties available, and they're
all going for similar price points. So what you tend
to find if you are boosting someone's ability to pay
for a home by a financial incentive, that tends to
just add to property prices, and you tend to see
an elevation. It tends to drive prices higher. I think,
(09:23):
you know really what we need to see and we're
seeing this, you know, at that federal level with the
housing cord it needs to be about supply. We need
to build more homes in the right areas, creating affordable supply.
We haven't met population growth in terms of building enough
homes to meet population growth. That is the solution, not
giving people cash.
Speaker 1 (09:42):
Yeah, well, look, I really appreciate your time this morning.
As always love having a chat with you. Thanks so
much for having a chat with me this morning, Nicola,
and we will talk to you soon.
Speaker 2 (09:52):
Thank you, thank you.
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