March 26, 2025 • 26 mins
Hosts Ciaran O'Brien and Peter O'Malley break down the Federal Government’s Budget and its ambitious housing plan, which aims to address Australia’s housing crisis by increasing supply beyond what the private sector can deliver alone. With targets for 1.2 million new homes, increased social housing investment, and changes to planning and infrastructure, we explore what this means for buyers, renters, and investors.
We also discuss the latest market trends, including declining auction clearance rates, tightening rental supply, and the impact of upcoming NSW tenancy law reforms. With inflation easing, will we see further rate cuts to support the market?
As mentioned on the show, listen to our previous podcast on No Grounds Evictions in NSW.
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
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Transcript
Episode Transcript
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Speaker 1 (00:00):
All down, all silent, going, going, going, go on son
Congratulations.
Speaker 2 (00:07):
Welcome to the Current Market Insights podcast
brought to you by HarrisPartners Real Estate.
Each episode we chat with realestate author and industry
leader, peter O'Malley, todiscuss the current property
market conditions and provideinsights to assist you on your
property journey.
Speaker 3 (00:29):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me, as always, is my
co-host and good friend, mrPeter O'Malley.
Peter hello, Kieran great to seeyou.
Great to see you, peter.
It's been a pretty big week inAustralia, really, but a big
week in housing as well.
There's quite a few things wereally need to talk about
tonight.
I wanted to start off theepisode, though, and just get
(00:52):
some thoughts from you and forour listeners on what is Budget
Week for the federal government.
As people know, we're headingtowards an election in the very,
very near future, and theTreasurer, jim Chalmers, put
down a budget a couple of daysago which outlined a whole bunch
of things, which are, you know,some popular, some unpopular,
but he did name a couple ofthings in the housing space,
(01:15):
some of which are extensions ofexisting programs and some new.
But I just wanted to have aquick chat through what the
budget has talked about in termsof housing and really get your
sense of whether or not youthink there's going to be any
real impact or implications forhome buyers, renters, sellers
out there, and whether it reallywill make much of a difference,
or whether it's just kind ofsmoke and mirrors in, you know,
(01:37):
as part of the election campaign.
Speaker 1 (01:39):
G'day Kieran, look, I don't think it is smoke and
mirrors.
I've just read the budgetpapers, as it does relate to
housing and it's prettysignificant actually, now that
I've had a look at it in closedetail because you capture
things through the media and youhear the opposition being
critical of the government'splans, et cetera I think you'll
(02:02):
find that even if there was achange of government at the
federal election this year, thatthe liberal party will work
with something very similar tothis.
Maybe in theory they would puttheir own tweak on it, but no,
uh, it's.
It's fairly significant programthat the government are gearing
up to to implement and remainsto be seen whether the people
will give them a second chanceto implement this plan.
(02:23):
I think it's lookingincreasingly likely that they
will.
So if I can just read some ofthe key captions from this
budget papers for those thathaven't had a look at it, it
says Building more homes forAustralians.
The National Housing Accord isbringing together all levels of
government, industry andinvestors to unlock supply.
(02:44):
The government is supporting apipeline of 55 000 social and
affordable homes throughinitiatives like the housing
australia future fund and thesocial housing accelerator.
They plan, as we know, to build1.2 million new well-located
homes over the next five yearsacross the country.
(03:06):
I don't think they'll achievethat being realistic, but the
government has committed 1.5million through the housing
support program to stateterritory and local governments
to fund projects to improveplanning capability, deliver and
enabling in infrastructure suchas roads, water and power,
(03:28):
build more social housing, aswe've discussed, and with the
government also offering $3billion in incentive payments
under the new home bonus and upto $4.5 billion in funding is
committed for states andterritories to address
infrastructure backlogs anddeliver new housing.
(03:48):
So this is, you know, this isfull-on.
This is, this is not a policy.
This is not just, uh, you know,having a um, a popular press
conference and then putting iton the never, never.
Some people are rightlycritical that it hasn't happened
quicker, but when you'retalking about national projects
of that scale, you can't reallyrush them.
(04:09):
There is a process that needsto be had as well, and whether
the electorate give thegovernment time to implement
this remains to be seen.
But even if Labor were removedfrom office, as I say, I think
the Liberal Party would end uppicking up large chunks of this
because to get treasury and geteveryone aligned, as they've
done or doing.
Speaker 3 (04:30):
In this process you wouldn't go back to scratch and
come up with a brand new plan,because it is fairly
comprehensive just just beforewe move on, I think you you
raise one very important pointfrom their statement, which is
something we have talked aboutand other commentators in the
property space have talked about, which is one of the issues to
supply, not necessarily justbeing the gridlock but being
(04:52):
hold-ups in places like counciland planning authorities and,
you know, actually getting thatthrough.
And I think for the first timereally, the Albanese government
has put on paper and outlinedtheir position that that is
something they've identified.
They've listened to consumergroups, they've listened to the
housing fund, et cetera, andthey are allocating money to try
and speed up that process,which I mean we've talked about
(05:13):
a lot, is a real issue, even inlocal council levels, and if
they have got this kind ofmulti-governmental tier support
system in place, it really isquite a substantial project.
Speaker 1 (05:24):
Indeed, I think the role of local government in
planning will change prettyquickly based on all of this it
has to, because the federalgovernment's coming down on
state governments and the stategovernments are coming down on
local governments.
That's how our constitutionworks and I think we'll see
completely different attitudesfrom local councils looking to
(05:46):
you know fit in with thisprogram.
So some of the subheadings,sort of without going into
greater detail in these papersimmediately sort of tell you
where it's all going.
Expanding the help to buy theygive an example there of where
the government take equity in ayoung couple's home who can't
quite afford to get into thehousing market but they are
(06:09):
wanting to get on the propertyladder and their careers and
their incomes are only likely toincrease as they get older.
So the government help to buyprogram will suit them.
Banning foreign buyers ofestablished homes that will go
down really well.
We've discussed that one in thepast and that's a way of
killing the demand, the excessdemand that's coming into the
(06:32):
country at a time of a lowAustralian dollar where foreign
buyers are pumping and takingadvantage of the low dollar and
pumping too much money into themarket and inflating prices on
the locals, Improving access tohousing and homelessness
services.
The government is providing $9.3billion to states and
(06:53):
territories to help combathomelessness, provide crisis
support and maintain and repairsocial housing.
I was in Brisbane earlier thisweek here and I was surprised at
the amount of homeless peopleon the street in Brisbane.
I really was.
I think the homelessness inBrisbane felt more acute than it
(07:14):
would be if I was walkingthrough Pitt Street Mall.
I don't know if I noticed that,for example, because I was, you
know, travelling outside mynormal, you know normal
day-to-day activities, that Iwas more aware of the
environment I was in, but thehomelessness in the middle of
Brisbane was really obvious.
Yeah, Supporting renterscontinuing the government's
(07:35):
commitment to responsible costof living relief, the government
has increased maximum rates ofCommonwealth rent assistance by
45% for around one millionhouseholds.
Boosting the constructionworkforce from the 1st of July
2025, eligible apprentices inhousing construction occupations
(07:56):
will receive up to $10,000 infinancial incentives over the
course of theirapprenticeshipships.
Encouraging more people intohousing construction trades and
providing apprentices with costof living support.
Like who's going to be criticalof that measure, for example?
Speaker 3 (08:14):
oh, and, as I mentioned to you off air earlier
, off the back of uh, thegovernment also announcing, uh,
in perpetuity, a hundredthousand free TAFE places every
year as part of their you knowcommitment to TAFE vocational
education and their legacy asthe People's Party or the
Union's Party kind of thing.
I really do think that thegovernment, for the first time
(08:36):
or I certainly think, in thisgovernment cycle is listening to
genuine feedback from consumergroups, from the general public,
from advisors, and actuallysaying, okay, these are the
issues that are important.
Maybe some people will saythey're not going far enough,
some will say they're going waytoo far and it's too expensive,
but I think there's certainly.
I feel buoyed in the sense thatthere is some direction in this
(08:58):
that hopefully will have animpact on the housing crisis
which, as we have said, extendsfrom those who can't purchase
and are stuck in the everdwindling rent cycle and then
those at the other end of thespectrum that are now facing
homelessness and uncertainty and, you know, lack of security and
shelter in Brisbane, sydney orwherever else.
So I think, certainly fromwhere I sit, it's all looking
(09:20):
pretty positive at this stage.
Speaker 1 (09:22):
Look, it's an acknowledgement that the private
sector would not be able to fixthe housing crisis, naturally
and in and of itself, in atimeframe that works for major
political parties.
Speaker 2 (09:35):
Yeah.
Speaker 1 (09:35):
And some people will rightly say that the government
now needs to step in at allthree levels of government and
do this to support the privatesector getting these houses to
market, or these new dwellingsto market, because they've been
so obstructionist for such along time to developers who just
(09:56):
wanted to build more homes forthe country at a time that we
needed them.
Speaker 3 (10:01):
Yeah, look, certainly .
And I guess, before we changetopic, my question for you and
probably the you know 1.3million dollar question giving
the, given the, the help to buyscheme caps.
What do you think is likely tohappen?
Because the usual commentaryaround schemes like this or the
superannuation excess scheme toget housing, you know, there's
(10:21):
always rhetoric and discussionaround.
Well, it's just going to pushhouse prices up because all of a
sudden there's this cash boost.
Do you think that there isgoing to actually be a flow on
negative effect for home buyers?
Because, yes, they'll getaccess to the shared equity but
by natural kind of progressionthe prices will increase to in
some ways accommodate that andthey'll still be priced out of
(10:42):
the market.
Speaker 1 (10:43):
History shows us that any government incentive that
is packaged as an incentivetowards home buyers ends up
benefiting the home sellers.
Speaker 2 (10:54):
Yeah.
Speaker 1 (10:55):
Where you can even that out is if you are genuinely
bringing the supply to marketthat they're promising which, as
I've already said, I thinkthey're going to struggle to
meet.
But you won't get a pricebubble or a seller's bonus that
they're promising which, as I'vealready said, I think they're
going to struggle to meet.
But you won't get a pricebubble or a seller's bonus if
the available supply is there.
So, yes, that part of the planhas to work in totality.
(11:19):
It won't work in isolationbecause it'll just create a
price bubble at that end of themarket.
I think we've discussed beforeon the podcast.
The most classic and memorableexample for us as real estate
agents is Kevin Rudd waivedstamp duty I think it was for
first-home buyers up to $500,000as part of his package during
the GFC and it just set a boomoff where people who couldn't
(11:44):
get $420,000 just priced theirproperty overnight at $499,000
and sold it yeah.
And there was just a remarkabledifference how the market at
that time was behaving above$500,000, where there was no
incentive as opposed to below$500,000.
I think from memory at that timethe incentive phased out
between $500,000 and $600,000,but to get the full incentive it
(12:06):
had to out between $500,000 and$600,000, but to get the full
incentive it had to be under$500,000.
So it created a price bubble atthat end of the market.
But at that stage there was nochance that a massive surge of
supply would come to market toeven out the incentive, whereas
what the federal government arehoping here and forecasting is
that they'll be throwing massiveamounts of extra supply at the
(12:29):
market so their help to buyscheme won't end up being a
seller's bonus well, let'scertainly hope so, peter.
Speaker 3 (12:37):
As we move on, then I I know there's there's been
some movement with uh,inflationary figures, as we, you
know, one of the things wecertainly talk about around the
rba's rates decisions, and we dooften recap CPI numbers and
where they're looking and wherethey're heading.
I know that some new figureshave come out today which
potentially may alter some ofour timelines or may give some
(13:00):
guidance perhaps of where theRBA is likely to go in the
coming weeks.
Any chance you can run usthrough what's come out today.
The RBA is likely to go in thecoming weeks.
Speaker 1 (13:07):
Any chance you can run us through what's come out
today.
So yeah, headline inflation hasfallen to 2.4%.
So it's below the halfway pointof the RBA's target band of 2%
to 3%.
And underlying inflation, ortrimmed mean, as they call it,
has fallen from 2.8%unexpectedly to 2.7%.
So this goes back to the RBAstatement last month that they
(13:28):
deemed that the current cashrate, even after the February
rate cut, would still berestrictive.
And that's what's comingthrough.
Inflation is actively falling.
A lot of people are reassessingtheir timelines for when a rate
cut will occur.
Mine hasn't changed because Ialways said that it's going to
(13:50):
be in April or May and you'reseeing market consensus now
really firm around a May ratecut.
But an April rate cut, whilstit's unlikely, can't be ruled
out.
There are some goodcommentators in the market that
think the RBA could and shouldand will cut next Tuesday.
I think it's a one in threechance that they cut next
(14:13):
Tuesday and on the currenttrajectory that all the numbers
and everything's pointing toward, it's almost certain that
they'll cut in May if they don'tcut next Tuesday.
Speaker 3 (14:26):
Yeah, I certainly read some commentary today that
aligns with what you say.
You know you have held firm fora little while now that the
rate cut is imminent before theelection, or you believe there
will be another one.
I must admit I'm a little bitsurprised.
I know we talked about lasttime with the rate cut.
We had discussed some of theearly days of the new US
administration, discussed someof the early days of the new US
(14:47):
administration.
We had talked about some of thepotential flow-on effects of
just the rhetoric and thecommentary that was coming out
of the United States.
And I must admit, personallyI'm a little bit surprised that
there hasn't been a greaterflow-on in terms of just
declining confidence in themoney markets or any, I guess,
pricing in or factoring oflikely tariffs.
Do you think that?
Obviously the RBA isconsidering all these factors,
(15:09):
but do you think there's anyrisk, if they do cut, let's say
in April or May, that then wehave this kind of massive
correction in the money marketsdue to foreign policy, which
then actually has a negativeimpact on our CPI?
Speaker 1 (15:19):
I think what people are starting to work out at the
moment.
The tariffs are off one day,they're on the next with Trump.
He's not smashing markets witha blunt instrument, he's
grandstanding and he'snegotiating.
And if you've read any ofTrump's books, this is just
typical Trump.
Speaker 3 (15:38):
Yeah just playing his own game.
Speaker 1 (15:40):
Well he's.
You know in his mind he's gothis true north.
He's got his dot points wherehe wants to get to.
But you'll never work it outbecause on the surface level
he's so wildly erratic.
But if you believe that's whoDonald Trump is, well fool on
you, not him.
He knows exactly where he wantsto go and how he wants to get
(16:03):
there.
Is it highly unconventional?
Have we seen anything like itbefore in the political space?
No, we haven't.
But Trump is only doing whatTrump said he would do during
the election.
He was democratically elected.
This is what the Americanpeople voted for.
The rest of the world don'tlike it, but he got in with a
(16:23):
thumping majority.
So there you go he's doing whathe said he do.
I haven't seen trump do toomuch.
If anything that wasunscheduled during the election
campaign.
People are shocked because apolitician is doing what he said
he'd do during the electioncampaign yeah, I must admit, we
haven't seen that for a while,certainly not in australian
politics.
Speaker 3 (16:42):
Uh well, it will be interesting to see and I
certainly, well I won't be alonein hoping the RBA do make rate
cuts in the next, you know, sixto eight weeks, that's for sure.
But we will have to keep aclose eye on what is happening
with inflation and certainlywith what happens with the RBA
next week.
Off the back of that, you'vegot, obviously, some budget
announcements.
(17:02):
We've got the inflationaryfigures today, but we've also
got some stats we need to talkthrough, which is our auction
clearance rates and how themarket has been over the last
week since we last had a chat.
Any sort of talking points orhot points, peter?
Speaker 1 (17:17):
Look, the auction clearance rate has resumed that
trend that it had in the backhalf of 2024.
It's stuck below 50% for thelast couple of weeks.
So the auction clearance ratelast weekend in Sydney was 48.1%
.
285 properties sold prior tothe auction and 276 sold at
(17:40):
auction.
A lot 373 were re-advertisedfor private treaty.
You know Tom Panos is anauctioneer in the inner city of
Sydney and I heard on Mondaywhen he put his market wrap out
that last Saturday he felt acurling in the market and a
(18:02):
shift.
So the relief rally from theFebruary rate cut is already
wearing off and stock levelshave tightened.
So I think what that does is itties into that point from the
RBA not that they're onlytalking about housing or
necessarily housing when theysaid we deem the current
interest rate setting to stillbe restrictive.
(18:22):
Yes, there was a relief rally,there was a sugar hit after the
rate cut, but fundamentallywe're still at a restrictive
level.
That's, you know, not justtightening the noose on the
housing market but all sectorsof the economy.
And there does need to be morerate relief because it's very,
very clear that the economy is,you know, inflation's coming
(18:43):
down, it's pulling back, itneeds support now.
It's been strangled enough.
Speaker 3 (18:49):
Yeah, which ties in really perfectly, I think, with
what you said.
Last time we spoke about theclearance rate and I asked you
specifically, you know, and therate cut, do you think that it's
likely to have any real impacton homeowners in terms of, you
know, rate relief and actualmortgage stress?
And you said, look, no, it'snot going to do anything at this
point, rate relief and actualmortgage stress.
And you said, look, no, it'snot going to do anything at this
point.
And I think that reallyhighlights that, because the the
(19:10):
media uh commentary around thecurrent housing situation in
sydney is that, hey, all of asudden it's a buyer's market and
you've got control and you'vegot power and you've got all
this ability to purchase.
But, as you're sort ofsuggesting, stock is low.
Uh, buyers do have a choicebecause you know there are some
people now that can borrow alittle bit more than they could
have potentially earlier.
Uh, but, as you say, you know,houses, households are still
(19:32):
struggling.
There's still not enough reliefto actually have a profound
impact and you know we really douh need to sort of wait and see
over the next few weeks as towhether or not there's going to
be enough interjection from theRBA to really have an impact on
people's, I guess confidencethat they can go out and spend
and you know, resume somesemblance of what their life
might have been like two yearsago.
Speaker 1 (19:53):
That's right.
Look, the other point we madeabout the rate cut.
You know, in conjunction witheverything else you've just
pointed out, is the rate cutstimulated or made existing
active buyers in the marketplacemore determined and more
confident to make a purchase?
Yeah, but we didn't see therate cut stimulate fresh buying
(20:13):
into the market and we haven'tseen vendors who are under
duress, in a position towithstand market forces where
they need to go, so that onerate cut doesn't turn the whole
equation around.
So maybe there's a, there'stightening stock because that
seasonally occurs late March,early April, and you won't see
(20:36):
you know high stock levels nowuntil until the spring.
So maybe that's just seasonal.
But maybe part part of thetightening stock levels at the
moment is less vendors feel likethey need to go to market here
and now because they've coppedsome interest rate relief.
The other big shift in themarket I think it's a big shift
(20:58):
from the trend, or a breakingtrend if you like is we are
seeing unusually stronginspection numbers at rental
opens for this time of year.
It's about this time of year therental market's cooling as the
weather starts to change, etcetera.
We're leasing I think wetouched on this a few weeks ago.
We're leasing the propertiesmidweek, as you would have seen.
(21:20):
I'm noticing across themarketplace with other agents
that on-market rental stock isreally low.
Like I know of agents that havegot 500 properties on the books
and they've got three for rentat the moment and those
properties are turning overreally quickly.
So I think in Sydney inner city, sydney, in the inner west, I
(21:42):
think you're going to see somemore pain for tenants as the
rental market looks like it'sset to kick again.
And it should be also pointedout in this very, very busy news
week that the New South WalesState Government have announced
that the no-purpose evictionswill take hold in May.
(22:04):
We've discussed that in thepast for anyone that wants to
listen to the ins and outs ofthat, but coming from May, a
landlord, in blunt terms, can'tmove the tenants out because
they don't like them.
Speaker 3 (22:16):
Yeah, I must admit, in everything that's happened, I
did forget about thatannouncement, you know, only a
few days ago, and for ourlisteners I will provide a link
to that episode in the text withthis podcast, because they also
, I believe, with thatannouncement, enshrined the pet
protections into the Act as well, so that you know, as a
landlord, you can't deny someonea pet, etc.
(22:37):
You know, within reasonablegrounds, which really is
changing the landscape.
I do have to wonder, though,Peter.
We are, you know, coming to theend of March.
The university cycle is only afew weeks old for the vast
majority of students.
We would have, and havecertainly seen an influx of
international students comingback in.
So it may be a bit of a perfectstorm of not enough rental
(22:58):
supply combined with a suddeninflux of students all over
again, and I have to wonder, youknow, what is going to happen
to those students if they can'tfind a place?
You know, are we just going toend up seeing more and more of
these, you know 20 to aterrorist kind of weird share
accommodation kind of scenariosthat just conflate the prices
even further?
Well, that's what would havehappened in the past.
Speaker 1 (23:19):
But I think companies like Scape, who specialise in
student accommodation, are goingto pick up the slack and be the
beneficiaries of all theinternational students that are
coming in.
I must say that the tenantsthat we're seeing out and about
at the moment are not theprofile of university students.
That's a real January thingseeing the kids coming from
(23:40):
China, primarily looking forhousing between sort of Newtown,
camperdown, glebe in thattriangle.
But that's not the profile oftenant that I'm referring to at
the moment.
It's locals that, for whateverreason, need to find a property.
And can I say that, whilst Ithink the federal government has
(24:00):
got a really decent housingplan here, if they can execute
it, which in some facets they'llsucceed at, in other facets
there's going to be moreroadblocks that they've got to
work their way through, but theplan is decent enough in and of
its own right.
This thing about the tenants andno pets and telling landlords
who can rent their property andwhat animals can and can't live
(24:23):
there.
Look, I understand the intentprotect tenants, um, etc.
But what you must realize isthat when a tenant leases a
private landlord's property, itis.
It is not a governmenttransaction.
It's two people that should be,two people that are coming to
arrangement in the privatesector.
(24:44):
And when you legislate to thedegree that the New South Wales
government are doing and they'vedone in Victoria and they're
doing in Queensland, you willhave the trend.
Speaker 3 (24:53):
You'll cause the trend that is occurring, which
landlords are bailing on massyeah, pulling out because they
don't want to risk theirproperty for whatever reason,
right?
Speaker 1 (25:02):
They're just taking their equity.
They're sitting on good gains.
You can't tell me that a dogcan live in my investment
properties, where I've justpolished the floorboards and
scratched them up.
You can't tell me that if Iwant to change over tenants,
that I must stick with theexisting tenants.
If that's what the game hasbecome, that's fine, but count
(25:24):
me out.
And landlords are selling outen masse and the rental pool is
shrinking and with this federalgovernment housing plan, there's
going to be no new stock in2025.
So the issue is going to getworse before it gets better, and
we do not need policy thatdrives landlords out of the
market at the moment, which iswhat these rules in May are
(25:46):
going to do.
Speaker 3 (25:47):
Yeah, look, certainly , and we're not the first to
raise that point.
We certainly won't be the last,that's for sure.
Peter, Look really really greatchat today, some pretty
important points, as I mentionedto our listeners.
I will give a link back to ourprevious podcast discussing the
no-cause evictions or theno-cause evictions, sorry and I
(26:09):
will provide, as always, a linkthere.
If you do want to request aspecific topic from us or
something you'd like a littlebit more info on, we're
certainly happy to help.
Peter, look, really great chat.
Thank you very much forspeaking with us today.
Thanks, kieran, all the best,thank you, and thanks to
everyone for listening toCurrent Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (26:27):
Thanks for joining us on the Current Market Insights
podcast brought to you by HarrisPartners Real Estate, the
podcast providing real estateinsights you won't find anywhere
else.
All down, all silent, going, going, going, go on son
Congratulations.
Speaker 2 (00:07):
Welcome to the Current Market Insights podcast
brought to you by HarrisPartners Real Estate.
Each episode we chat with realestate author and industry
leader, peter O'Malley, todiscuss the current property
market conditions and provideinsights to assist you on your
property journey.
Speaker 3 (00:29):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me, as always, is my
co-host and good friend, mrPeter O'Malley.
Peter hello, Kieran great to seeyou.
Great to see you, peter.
It's been a pretty big week inAustralia, really, but a big
week in housing as well.
There's quite a few things wereally need to talk about
tonight.
I wanted to start off theepisode, though, and just get
(00:52):
some thoughts from you and forour listeners on what is Budget
Week for the federal government.
As people know, we're headingtowards an election in the very,
very near future, and theTreasurer, jim Chalmers, put
down a budget a couple of daysago which outlined a whole bunch
of things, which are, you know,some popular, some unpopular,
but he did name a couple ofthings in the housing space,
(01:15):
some of which are extensions ofexisting programs and some new.
But I just wanted to have aquick chat through what the
budget has talked about in termsof housing and really get your
sense of whether or not youthink there's going to be any
real impact or implications forhome buyers, renters, sellers
out there, and whether it reallywill make much of a difference,
or whether it's just kind ofsmoke and mirrors in, you know,
(01:37):
as part of the election campaign.
Speaker 1 (01:39):
G'day Kieran, look, I don't think it is smoke and
mirrors.
I've just read the budgetpapers, as it does relate to
housing and it's prettysignificant actually, now that
I've had a look at it in closedetail because you capture
things through the media and youhear the opposition being
critical of the government'splans, et cetera I think you'll
(02:02):
find that even if there was achange of government at the
federal election this year, thatthe liberal party will work
with something very similar tothis.
Maybe in theory they would puttheir own tweak on it, but no,
uh, it's.
It's fairly significant programthat the government are gearing
up to to implement and remainsto be seen whether the people
will give them a second chanceto implement this plan.
(02:23):
I think it's lookingincreasingly likely that they
will.
So if I can just read some ofthe key captions from this
budget papers for those thathaven't had a look at it, it
says Building more homes forAustralians.
The National Housing Accord isbringing together all levels of
government, industry andinvestors to unlock supply.
(02:44):
The government is supporting apipeline of 55 000 social and
affordable homes throughinitiatives like the housing
australia future fund and thesocial housing accelerator.
They plan, as we know, to build1.2 million new well-located
homes over the next five yearsacross the country.
(03:06):
I don't think they'll achievethat being realistic, but the
government has committed 1.5million through the housing
support program to stateterritory and local governments
to fund projects to improveplanning capability, deliver and
enabling in infrastructure suchas roads, water and power,
(03:28):
build more social housing, aswe've discussed, and with the
government also offering $3billion in incentive payments
under the new home bonus and upto $4.5 billion in funding is
committed for states andterritories to address
infrastructure backlogs anddeliver new housing.
(03:48):
So this is, you know, this isfull-on.
This is, this is not a policy.
This is not just, uh, you know,having a um, a popular press
conference and then putting iton the never, never.
Some people are rightlycritical that it hasn't happened
quicker, but when you'retalking about national projects
of that scale, you can't reallyrush them.
(04:09):
There is a process that needsto be had as well, and whether
the electorate give thegovernment time to implement
this remains to be seen.
But even if Labor were removedfrom office, as I say, I think
the Liberal Party would end uppicking up large chunks of this
because to get treasury and geteveryone aligned, as they've
done or doing.
Speaker 3 (04:30):
In this process you wouldn't go back to scratch and
come up with a brand new plan,because it is fairly
comprehensive just just beforewe move on, I think you you
raise one very important pointfrom their statement, which is
something we have talked aboutand other commentators in the
property space have talked about, which is one of the issues to
supply, not necessarily justbeing the gridlock but being
(04:52):
hold-ups in places like counciland planning authorities and,
you know, actually getting thatthrough.
And I think for the first timereally, the Albanese government
has put on paper and outlinedtheir position that that is
something they've identified.
They've listened to consumergroups, they've listened to the
housing fund, et cetera, andthey are allocating money to try
and speed up that process,which I mean we've talked about
(05:13):
a lot, is a real issue, even inlocal council levels, and if
they have got this kind ofmulti-governmental tier support
system in place, it really isquite a substantial project.
Speaker 1 (05:24):
Indeed, I think the role of local government in
planning will change prettyquickly based on all of this it
has to, because the federalgovernment's coming down on
state governments and the stategovernments are coming down on
local governments.
That's how our constitutionworks and I think we'll see
completely different attitudesfrom local councils looking to
(05:46):
you know fit in with thisprogram.
So some of the subheadings,sort of without going into
greater detail in these papersimmediately sort of tell you
where it's all going.
Expanding the help to buy theygive an example there of where
the government take equity in ayoung couple's home who can't
quite afford to get into thehousing market but they are
(06:09):
wanting to get on the propertyladder and their careers and
their incomes are only likely toincrease as they get older.
So the government help to buyprogram will suit them.
Banning foreign buyers ofestablished homes that will go
down really well.
We've discussed that one in thepast and that's a way of
killing the demand, the excessdemand that's coming into the
(06:32):
country at a time of a lowAustralian dollar where foreign
buyers are pumping and takingadvantage of the low dollar and
pumping too much money into themarket and inflating prices on
the locals, Improving access tohousing and homelessness
services.
The government is providing $9.3billion to states and
(06:53):
territories to help combathomelessness, provide crisis
support and maintain and repairsocial housing.
I was in Brisbane earlier thisweek here and I was surprised at
the amount of homeless peopleon the street in Brisbane.
I really was.
I think the homelessness inBrisbane felt more acute than it
(07:14):
would be if I was walkingthrough Pitt Street Mall.
I don't know if I noticed that,for example, because I was, you
know, travelling outside mynormal, you know normal
day-to-day activities, that Iwas more aware of the
environment I was in, but thehomelessness in the middle of
Brisbane was really obvious.
Yeah, Supporting renterscontinuing the government's
(07:35):
commitment to responsible costof living relief, the government
has increased maximum rates ofCommonwealth rent assistance by
45% for around one millionhouseholds.
Boosting the constructionworkforce from the 1st of July
2025, eligible apprentices inhousing construction occupations
(07:56):
will receive up to $10,000 infinancial incentives over the
course of theirapprenticeshipships.
Encouraging more people intohousing construction trades and
providing apprentices with costof living support.
Like who's going to be criticalof that measure, for example?
Speaker 3 (08:14):
oh, and, as I mentioned to you off air earlier
, off the back of uh, thegovernment also announcing, uh,
in perpetuity, a hundredthousand free TAFE places every
year as part of their you knowcommitment to TAFE vocational
education and their legacy asthe People's Party or the
Union's Party kind of thing.
I really do think that thegovernment, for the first time
(08:36):
or I certainly think, in thisgovernment cycle is listening to
genuine feedback from consumergroups, from the general public,
from advisors, and actuallysaying, okay, these are the
issues that are important.
Maybe some people will saythey're not going far enough,
some will say they're going waytoo far and it's too expensive,
but I think there's certainly.
I feel buoyed in the sense thatthere is some direction in this
(08:58):
that hopefully will have animpact on the housing crisis
which, as we have said, extendsfrom those who can't purchase
and are stuck in the everdwindling rent cycle and then
those at the other end of thespectrum that are now facing
homelessness and uncertainty and, you know, lack of security and
shelter in Brisbane, sydney orwherever else.
So I think, certainly fromwhere I sit, it's all looking
(09:20):
pretty positive at this stage.
Speaker 1 (09:22):
Look, it's an acknowledgement that the private
sector would not be able to fixthe housing crisis, naturally
and in and of itself, in atimeframe that works for major
political parties.
Speaker 2 (09:35):
Yeah.
Speaker 1 (09:35):
And some people will rightly say that the government
now needs to step in at allthree levels of government and
do this to support the privatesector getting these houses to
market, or these new dwellingsto market, because they've been
so obstructionist for such along time to developers who just
(09:56):
wanted to build more homes forthe country at a time that we
needed them.
Speaker 3 (10:01):
Yeah, look, certainly .
And I guess, before we changetopic, my question for you and
probably the you know 1.3million dollar question giving
the, given the, the help to buyscheme caps.
What do you think is likely tohappen?
Because the usual commentaryaround schemes like this or the
superannuation excess scheme toget housing, you know, there's
(10:21):
always rhetoric and discussionaround.
Well, it's just going to pushhouse prices up because all of a
sudden there's this cash boost.
Do you think that there isgoing to actually be a flow on
negative effect for home buyers?
Because, yes, they'll getaccess to the shared equity but
by natural kind of progressionthe prices will increase to in
some ways accommodate that andthey'll still be priced out of
(10:42):
the market.
Speaker 1 (10:43):
History shows us that any government incentive that
is packaged as an incentivetowards home buyers ends up
benefiting the home sellers.
Speaker 2 (10:54):
Yeah.
Speaker 1 (10:55):
Where you can even that out is if you are genuinely
bringing the supply to marketthat they're promising which, as
I've already said, I thinkthey're going to struggle to
meet.
But you won't get a pricebubble or a seller's bonus that
they're promising which, as I'vealready said, I think they're
going to struggle to meet.
But you won't get a pricebubble or a seller's bonus if
the available supply is there.
So, yes, that part of the planhas to work in totality.
(11:19):
It won't work in isolationbecause it'll just create a
price bubble at that end of themarket.
I think we've discussed beforeon the podcast.
The most classic and memorableexample for us as real estate
agents is Kevin Rudd waivedstamp duty I think it was for
first-home buyers up to $500,000as part of his package during
the GFC and it just set a boomoff where people who couldn't
(11:44):
get $420,000 just priced theirproperty overnight at $499,000
and sold it yeah.
And there was just a remarkabledifference how the market at
that time was behaving above$500,000, where there was no
incentive as opposed to below$500,000.
I think from memory at that timethe incentive phased out
between $500,000 and $600,000,but to get the full incentive it
(12:06):
had to out between $500,000 and$600,000, but to get the full
incentive it had to be under$500,000.
So it created a price bubble atthat end of the market.
But at that stage there was nochance that a massive surge of
supply would come to market toeven out the incentive, whereas
what the federal government arehoping here and forecasting is
that they'll be throwing massiveamounts of extra supply at the
(12:29):
market so their help to buyscheme won't end up being a
seller's bonus well, let'scertainly hope so, peter.
Speaker 3 (12:37):
As we move on, then I I know there's there's been
some movement with uh,inflationary figures, as we, you
know, one of the things wecertainly talk about around the
rba's rates decisions, and we dooften recap CPI numbers and
where they're looking and wherethey're heading.
I know that some new figureshave come out today which
potentially may alter some ofour timelines or may give some
(13:00):
guidance perhaps of where theRBA is likely to go in the
coming weeks.
Any chance you can run usthrough what's come out today.
The RBA is likely to go in thecoming weeks.
Speaker 1 (13:07):
Any chance you can run us through what's come out
today.
So yeah, headline inflation hasfallen to 2.4%.
So it's below the halfway pointof the RBA's target band of 2%
to 3%.
And underlying inflation, ortrimmed mean, as they call it,
has fallen from 2.8%unexpectedly to 2.7%.
So this goes back to the RBAstatement last month that they
(13:28):
deemed that the current cashrate, even after the February
rate cut, would still berestrictive.
And that's what's comingthrough.
Inflation is actively falling.
A lot of people are reassessingtheir timelines for when a rate
cut will occur.
Mine hasn't changed because Ialways said that it's going to
(13:50):
be in April or May and you'reseeing market consensus now
really firm around a May ratecut.
But an April rate cut, whilstit's unlikely, can't be ruled
out.
There are some goodcommentators in the market that
think the RBA could and shouldand will cut next Tuesday.
I think it's a one in threechance that they cut next
(14:13):
Tuesday and on the currenttrajectory that all the numbers
and everything's pointing toward, it's almost certain that
they'll cut in May if they don'tcut next Tuesday.
Speaker 3 (14:26):
Yeah, I certainly read some commentary today that
aligns with what you say.
You know you have held firm fora little while now that the
rate cut is imminent before theelection, or you believe there
will be another one.
I must admit I'm a little bitsurprised.
I know we talked about lasttime with the rate cut.
We had discussed some of theearly days of the new US
administration, discussed someof the early days of the new US
(14:47):
administration.
We had talked about some of thepotential flow-on effects of
just the rhetoric and thecommentary that was coming out
of the United States.
And I must admit, personallyI'm a little bit surprised that
there hasn't been a greaterflow-on in terms of just
declining confidence in themoney markets or any, I guess,
pricing in or factoring oflikely tariffs.
Do you think that?
Obviously the RBA isconsidering all these factors,
(15:09):
but do you think there's anyrisk, if they do cut, let's say
in April or May, that then wehave this kind of massive
correction in the money marketsdue to foreign policy, which
then actually has a negativeimpact on our CPI?
Speaker 1 (15:19):
I think what people are starting to work out at the
moment.
The tariffs are off one day,they're on the next with Trump.
He's not smashing markets witha blunt instrument, he's
grandstanding and he'snegotiating.
And if you've read any ofTrump's books, this is just
typical Trump.
Speaker 3 (15:38):
Yeah just playing his own game.
Speaker 1 (15:40):
Well he's.
You know in his mind he's gothis true north.
He's got his dot points wherehe wants to get to.
But you'll never work it outbecause on the surface level
he's so wildly erratic.
But if you believe that's whoDonald Trump is, well fool on
you, not him.
He knows exactly where he wantsto go and how he wants to get
(16:03):
there.
Is it highly unconventional?
Have we seen anything like itbefore in the political space?
No, we haven't.
But Trump is only doing whatTrump said he would do during
the election.
He was democratically elected.
This is what the Americanpeople voted for.
The rest of the world don'tlike it, but he got in with a
(16:23):
thumping majority.
So there you go he's doing whathe said he do.
I haven't seen trump do toomuch.
If anything that wasunscheduled during the election
campaign.
People are shocked because apolitician is doing what he said
he'd do during the electioncampaign yeah, I must admit, we
haven't seen that for a while,certainly not in australian
politics.
Speaker 3 (16:42):
Uh well, it will be interesting to see and I
certainly, well I won't be alonein hoping the RBA do make rate
cuts in the next, you know, sixto eight weeks, that's for sure.
But we will have to keep aclose eye on what is happening
with inflation and certainlywith what happens with the RBA
next week.
Off the back of that, you'vegot, obviously, some budget
announcements.
(17:02):
We've got the inflationaryfigures today, but we've also
got some stats we need to talkthrough, which is our auction
clearance rates and how themarket has been over the last
week since we last had a chat.
Any sort of talking points orhot points, peter?
Speaker 1 (17:17):
Look, the auction clearance rate has resumed that
trend that it had in the backhalf of 2024.
It's stuck below 50% for thelast couple of weeks.
So the auction clearance ratelast weekend in Sydney was 48.1%
.
285 properties sold prior tothe auction and 276 sold at
(17:40):
auction.
A lot 373 were re-advertisedfor private treaty.
You know Tom Panos is anauctioneer in the inner city of
Sydney and I heard on Mondaywhen he put his market wrap out
that last Saturday he felt acurling in the market and a
(18:02):
shift.
So the relief rally from theFebruary rate cut is already
wearing off and stock levelshave tightened.
So I think what that does is itties into that point from the
RBA not that they're onlytalking about housing or
necessarily housing when theysaid we deem the current
interest rate setting to stillbe restrictive.
(18:22):
Yes, there was a relief rally,there was a sugar hit after the
rate cut, but fundamentallywe're still at a restrictive
level.
That's, you know, not justtightening the noose on the
housing market but all sectorsof the economy.
And there does need to be morerate relief because it's very,
very clear that the economy is,you know, inflation's coming
(18:43):
down, it's pulling back, itneeds support now.
It's been strangled enough.
Speaker 3 (18:49):
Yeah, which ties in really perfectly, I think, with
what you said.
Last time we spoke about theclearance rate and I asked you
specifically, you know, and therate cut, do you think that it's
likely to have any real impacton homeowners in terms of, you
know, rate relief and actualmortgage stress?
And you said, look, no, it'snot going to do anything at this
point, rate relief and actualmortgage stress.
And you said, look, no, it'snot going to do anything at this
point.
And I think that reallyhighlights that, because the the
(19:10):
media uh commentary around thecurrent housing situation in
sydney is that, hey, all of asudden it's a buyer's market and
you've got control and you'vegot power and you've got all
this ability to purchase.
But, as you're sort ofsuggesting, stock is low.
Uh, buyers do have a choicebecause you know there are some
people now that can borrow alittle bit more than they could
have potentially earlier.
Uh, but, as you say, you know,houses, households are still
(19:32):
struggling.
There's still not enough reliefto actually have a profound
impact and you know we really douh need to sort of wait and see
over the next few weeks as towhether or not there's going to
be enough interjection from theRBA to really have an impact on
people's, I guess confidencethat they can go out and spend
and you know, resume somesemblance of what their life
might have been like two yearsago.
Speaker 1 (19:53):
That's right.
Look, the other point we madeabout the rate cut.
You know, in conjunction witheverything else you've just
pointed out, is the rate cutstimulated or made existing
active buyers in the marketplacemore determined and more
confident to make a purchase?
Yeah, but we didn't see therate cut stimulate fresh buying
(20:13):
into the market and we haven'tseen vendors who are under
duress, in a position towithstand market forces where
they need to go, so that onerate cut doesn't turn the whole
equation around.
So maybe there's a, there'stightening stock because that
seasonally occurs late March,early April, and you won't see
(20:36):
you know high stock levels nowuntil until the spring.
So maybe that's just seasonal.
But maybe part part of thetightening stock levels at the
moment is less vendors feel likethey need to go to market here
and now because they've coppedsome interest rate relief.
The other big shift in themarket I think it's a big shift
(20:58):
from the trend, or a breakingtrend if you like is we are
seeing unusually stronginspection numbers at rental
opens for this time of year.
It's about this time of year therental market's cooling as the
weather starts to change, etcetera.
We're leasing I think wetouched on this a few weeks ago.
We're leasing the propertiesmidweek, as you would have seen.
(21:20):
I'm noticing across themarketplace with other agents
that on-market rental stock isreally low.
Like I know of agents that havegot 500 properties on the books
and they've got three for rentat the moment and those
properties are turning overreally quickly.
So I think in Sydney inner city, sydney, in the inner west, I
(21:42):
think you're going to see somemore pain for tenants as the
rental market looks like it'sset to kick again.
And it should be also pointedout in this very, very busy news
week that the New South WalesState Government have announced
that the no-purpose evictionswill take hold in May.
(22:04):
We've discussed that in thepast for anyone that wants to
listen to the ins and outs ofthat, but coming from May, a
landlord, in blunt terms, can'tmove the tenants out because
they don't like them.
Speaker 3 (22:16):
Yeah, I must admit, in everything that's happened, I
did forget about thatannouncement, you know, only a
few days ago, and for ourlisteners I will provide a link
to that episode in the text withthis podcast, because they also
, I believe, with thatannouncement, enshrined the pet
protections into the Act as well, so that you know, as a
landlord, you can't deny someonea pet, etc.
(22:37):
You know, within reasonablegrounds, which really is
changing the landscape.
I do have to wonder, though,Peter.
We are, you know, coming to theend of March.
The university cycle is only afew weeks old for the vast
majority of students.
We would have, and havecertainly seen an influx of
international students comingback in.
So it may be a bit of a perfectstorm of not enough rental
(22:58):
supply combined with a suddeninflux of students all over
again, and I have to wonder, youknow, what is going to happen
to those students if they can'tfind a place?
You know, are we just going toend up seeing more and more of
these, you know 20 to aterrorist kind of weird share
accommodation kind of scenariosthat just conflate the prices
even further?
Well, that's what would havehappened in the past.
Speaker 1 (23:19):
But I think companies like Scape, who specialise in
student accommodation, are goingto pick up the slack and be the
beneficiaries of all theinternational students that are
coming in.
I must say that the tenantsthat we're seeing out and about
at the moment are not theprofile of university students.
That's a real January thingseeing the kids coming from
(23:40):
China, primarily looking forhousing between sort of Newtown,
camperdown, glebe in thattriangle.
But that's not the profile oftenant that I'm referring to at
the moment.
It's locals that, for whateverreason, need to find a property.
And can I say that, whilst Ithink the federal government has
(24:00):
got a really decent housingplan here, if they can execute
it, which in some facets they'llsucceed at, in other facets
there's going to be moreroadblocks that they've got to
work their way through, but theplan is decent enough in and of
its own right.
This thing about the tenants andno pets and telling landlords
who can rent their property andwhat animals can and can't live
(24:23):
there.
Look, I understand the intentprotect tenants, um, etc.
But what you must realize isthat when a tenant leases a
private landlord's property, itis.
It is not a governmenttransaction.
It's two people that should be,two people that are coming to
arrangement in the privatesector.
(24:44):
And when you legislate to thedegree that the New South Wales
government are doing and they'vedone in Victoria and they're
doing in Queensland, you willhave the trend.
Speaker 3 (24:53):
You'll cause the trend that is occurring, which
landlords are bailing on massyeah, pulling out because they
don't want to risk theirproperty for whatever reason,
right?
Speaker 1 (25:02):
They're just taking their equity.
They're sitting on good gains.
You can't tell me that a dogcan live in my investment
properties, where I've justpolished the floorboards and
scratched them up.
You can't tell me that if Iwant to change over tenants,
that I must stick with theexisting tenants.
If that's what the game hasbecome, that's fine, but count
(25:24):
me out.
And landlords are selling outen masse and the rental pool is
shrinking and with this federalgovernment housing plan, there's
going to be no new stock in2025.
So the issue is going to getworse before it gets better, and
we do not need policy thatdrives landlords out of the
market at the moment, which iswhat these rules in May are
(25:46):
going to do.
Speaker 3 (25:47):
Yeah, look, certainly , and we're not the first to
raise that point.
We certainly won't be the last,that's for sure.
Peter, Look really really greatchat today, some pretty
important points, as I mentionedto our listeners.
I will give a link back to ourprevious podcast discussing the
no-cause evictions or theno-cause evictions, sorry and I
(26:09):
will provide, as always, a linkthere.
If you do want to request aspecific topic from us or
something you'd like a littlebit more info on, we're
certainly happy to help.
Peter, look, really great chat.
Thank you very much forspeaking with us today.
Thanks, kieran, all the best,thank you, and thanks to
everyone for listening toCurrent Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (26:27):
Thanks for joining us on the Current Market Insights
podcast brought to you by HarrisPartners Real Estate, the
podcast providing real estateinsights you won't find anywhere
else.
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