August 27, 2025 • 29 mins
Hosts Ciaran O'Brien and Peter O'Malley unpack major government announcements set to reshape Sydney’s property market. From new first home buyer incentives to large-scale rezoning plans, these policy shifts aim to boost affordability and supply — but will they actually deliver, or simply push prices higher?
We also discuss:
- Federal first home buyer guarantee allowing purchases with 5% deposit and no LMI
- Treasury’s claim of only 0.5% price impact vs. historical evidence of price inflation from incentives
- Removal of income limits potentially opening benefits to higher earners
- Chris Minns’ announcement of Willara station completion and rezoning for 10,000 homes
- High-density strategy around transport hubs to reduce car dependency
- Inflation figures at 2.8% reducing chances of a September rate cut
- Electricity costs emerging as a key inflation driver
- Auction clearance rates improving to 56.5%, with equal split between sold prior and under the hammer
- Stale listings moving as signs of a heating market emerge ahead of spring
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
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All down, all silent, going, going, going, gone.
So 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 (00:30):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me is my good friend,
mr Peter O'Malley.
Peter, kieran, g'day, how areyou going Good to?
I'm going well.
Good to see you, peter.
I want to jump in today'sepisode and there's quite a bit
to talk about.
I think all sadly in.
I guess, in our case all sadlycentered around political
(00:51):
announcements, politicaldecisions now, but as they
relate to property in Sydney, Iwant to start the discussion
today by talking about thefederal government's home
ownership changes.
They've made a range ofannouncements as part of their
election as to ways that theywere going to assist people to
get into the housing market.
One of the things that theytalked about was reducing the
(01:13):
amount of deposit required byfirst-time buyers to get into
the market without incurring alender's mortgage insurance or
LMI penalty.
Now, when it was first announced, this policy sounded relatively
tame and more as a I guess, abit of a popularity point, more
so than a really well fleshedout policy.
But now the government's comeout, made some changes and I
(01:35):
guess in some ways tried toreally beef up what this
actually means.
So to kick us off, what do you,I guess?
What do you understand aboutthe policy and then what are the
more recent kind ofconversation points around it
that I guess.
What do you understand aboutthe policy and then what are the
more recent kind ofconversation points around it?
That, I guess give it the focuswe want to talk about today.
Speaker 1 (01:50):
Well, look, the Herald, the ABC rather reported
it this week here and they saidthe scheme the first home by
guarantee would allow people tobuy a property their first
property with a 5% deposit andavoid paying lenders mortgage
insurance, as you've justoutlined.
Housing Minister Claire O'Neillsaid the scheme would allow
(02:12):
first home buyers to be payingdown their own mortgage rather
than rent sooner.
That's perhaps a seven or eightyear period where they're
choosing to pay off their ownmortgage rather than someone
else's, and that's a really goodthing.
The government is citingTreasury Department modelling
which suggests the total impacton house prices will be around
(02:34):
half a percent increase aftersix years.
Don't know how Treasury got tothat level, kieran, but there
you go.
Experts go on to say that theprices will actually be pushed
up a lot higher than that,particularly in the first couple
of years after the scheme isintroduced, given it will be
stimulus to the market, theproperty market.
Speaker 3 (02:55):
So a couple of things to unpack there, first and
foremost for people that don'tunderstand or don't know much
about LMI what exactly is LMI,and what kind of impact does it
really have on someone who'strying to put together a deposit
for a property?
Speaker 1 (03:09):
Yeah, look, it's often the difference between
able to enter the market and notbe able to enter the market for
a lot of young people, right?
So if you can't get a deposit ofa certain size, the mortgage
lender will say to the borroweryes, we're prepared to lend you
that money.
We can see that your earningsand your earnings are likely to
(03:30):
improve as your careerprogresses, but based on your
existing earnings, we can seethat you can afford to pay the
property back.
However, you don't have a largeenough deposit to for us just
to give you the money straightout.
So therefore we'd like somemortgage lenders insurance in
place here to protect us shouldyou the money straight out.
So therefore, we'd like somemortgage lenders insurance in
place here to protect us shouldthe worst happen and you fall
(03:50):
over in terms of repayment.
That can be a significant sumof money and that can be the
difference where you can have afirst home buyer who scraped
together 5% or 10% deposit.
If they were, in theory, payinga mortgage instead of paying
rent, they could make ends meet,but they can't quite get to
that lender's mortgage insuranceto allow them to enter the
(04:12):
marketplace.
Speaker 3 (04:13):
Okay.
So as a practical example,let's say someone had saved
$50,000 for a deposit and theythought this might be enough to
make an offer on a property, butthey haven't met the 20%
threshold or whatever the LVR isthat's being sought at the time
and theoretically then thatlender's mortgage insurance
comes off, whatever depositamount they might have.
(04:33):
So all of a sudden they're evenshorter from where they need to
be.
Is that the concept?
Oh well, they wouldn't get theloan under the current structure
, they just wouldn't get it atall.
Speaker 1 (04:40):
yeah, so going forward, the government will say
to approved borrowers we cansee that, based on your career
earnings, where you're going tothe loan amount that you're
looking to take out, that you'rea good and safe bet.
So the government will step inand make sure that you don't
have to pay mortgage insurance.
Speaker 3 (05:02):
Okay, so I guess a very cursory level sounds like a
great incentive right, a wayfor the government to stimulate
younger couples, young singles,whatever, into the property
market you mentioned.
The treasury modelling suggeststhat property prices will
increase 0.5% over six years offthe back of this.
Given that Sydney propertyincreases, you know more than
that, sometimes in the month.
(05:23):
How you know, how do you thinktreasury actually came to this
figure and, realistically, basedon your experience with other
incentive schemes over the yearsthat you've been in real estate
, what do you think the actualimpact is likely to be here?
Speaker 1 (05:36):
yeah, look, when it comes to treasury's forecast
there, I don't think you cantake it with a pinch of salt.
That's's ridiculous.
Yeah, it really is.
Speaker 3 (05:45):
The property market literally could go up that much
by the time we finish thisrecording.
Speaker 1 (05:50):
Indeed.
Well, on the announcement, orcertainly the introduction, come
October 2025, that's quitepossible.
That's right.
Yeah, so this policy feeds thedemand side in the housing
market further, yep, and historytells us that whenever the
governments throw an incentiveinto the demand side of the
(06:11):
equation, the market rises bymore than the benefit on offer.
Speaker 3 (06:15):
Yeah.
Speaker 1 (06:16):
So, in very basic terms, ones that most people can
remember, in 2008, when theworld was in meltdown, the Rudd
government introduced I think itwas seven thousand dollar bonus
for first home buyers under onhomes under five hundred
thousand dollars and almostovernight the market rose during
the gfc, when wall streetnearly completely imploded,
(06:40):
sydney property prices underfive hundred thousand000 rose by
$14,000, $21,000 as first homebuyers chased a $7,000 incentive
.
So for Treasury to say that thiswould only impact property
prices by half a percent oversix years.
I think what they're reallyignoring there is the unintended
(07:00):
consequences and this is whatbureaucrats and treasury
departments are known for whichis modelling, where they change
one thing, believing thatnothing else in the model will
change based on the new policy,other than people right at the
point of wanting lender'smortgage insurance and
(07:21):
everything will be modelled fromthere.
But when you change the rules,you change behaviours, and if
you offer an incentive like this, you will change the psychology
of first home buyers and youwill end up creating a which
others can decide whether it'sgood or bad.
I'm just speaking purelyclinically about it.
(07:41):
You will create a surge ofdemand with this policy here.
Speaker 3 (07:46):
Yeah, and I can't help but wonder if the
government's also made thesemodels or predicated them on
this false belief they have thatthey're delivering 1.25 million
new homes, you know, over thisshort period of time and that of
course, their supply effortsare going to match the demand
that's increased through this.
I mean, the demand's alreadyvery high and we have that issue
across Sydney in general,supply is not coming fast enough
(08:08):
and you know, I agree with you.
I can't help but think thatthey've said well, under our
proposal, this will be finebecause we're building millions
more houses, but but of course,the reality is so different from
the messaging.
Speaker 1 (08:23):
Yeah, if there's weakness in the Sydney property
market or the inner city marketat the moment, it is at the
bottom end or the lower end ofpricing.
And what this is designed to doand the Housing Minister,
claire O'Neill, says as much inher statement there that it's a
seven or eight year period wherea first home buyer is choosing
to pay off their own mortgagerather than someone else's, ie
renting.
So this is going to.
(08:45):
This is an attempt to rein inthe rental market as well, which
hasn't really been discussed intoo much of the media.
Commentary about this is thatif you can get young people
saying rents are too high, I'mbetter off buying my own
property, you will have thebottom end of the market come
(09:07):
alive as first home buyers makethat switch from being a tenant
to an owner-occupier.
Speaker 3 (09:14):
Yeah, which, as you say, theoretically should bring
down rental demand.
My final question on this topic, then Peter the Herald, who
also wrote an article about this, mentioned that the scheme
itself, unlike previousiterations of government schemes
in this space, will have nocaps on the number of applicants
.
That said, one of thesuggestions that's kind of been
(09:35):
made by some parties, who mayhave vested interests against
the government making thischange, have said that, though
there are no kind of functionalcaps, there will be caps in
reality, because the initialsurge will see people priced out
of the then five percentrequirement for entry anyway.
Do you think it's going to be,or do you think there's likely
to be, a scenario where there'sso much demand and so much
(09:58):
interest and such a surge inprices that all of a sudden
people can't even get to the 5%required in this case?
Speaker 1 (10:05):
I think if the market became that unhinged, they
would have to step in and slowit down in that scenario.
Speaker 3 (10:13):
So one of the things they've done here is lifted the
caps on the.
There's no capital number ofapplicants, but there is a
ceiling on how much you can.
You know what the price thatyou can go to, and I think it's
1.5 million.
Speaker 1 (10:24):
It's 1.5 million in sydney, but income limits on
one's eligibility to access thescheme has also been removed
right, so they could implementincome limits, or they could
implement.
Speaker 3 (10:33):
So let's say, you don't know you don't.
Speaker 1 (10:35):
You don't own a property.
Yeah, um, and for good luck toyou, for whatever reason, you've
got a three or a five hundredthousand dollar job.
Um, you, you can, you can claimthis incentive does that?
Speaker 3 (10:47):
to me that seems like again.
Just there's got to be someinequity there, right?
Because if you, if you earnhalf a million dollars a year,
let's say arbitrarily, and youhaven't bought a house for
whatever reason, you couldaccess this game, use, bugger
all deposit and then you have somuch more free capital than
someone who's earning fiftythousand dollars a year to then
invest in some other high yieldplus.
Speaker 1 (11:05):
You've got your foot on the property ladder I mean I
was a little bit surprised tosee that one particularly
environment we're in, where therich are getting richer
post-covid and the, you know,the middle, the middle down are
getting sort of crunched byhigher interest rates, cost of
living, the challenges of theeconomy et cetera.
Yeah, to remove one'seligibility based on their
(11:26):
earnings seemed like you wouldfuel it for people that, for
whatever reason, haven'tpurchased a property yet but are
big earners.
Speaker 3 (11:34):
Yeah well, it just seems like there's an easy path
for them to make even more moneyquicker than anyone else.
But you know well, the timewill be the judge of how well
this works out, but I'm yeahinterested to watch the space.
Speaker 1 (11:45):
I think well if, if we can say I'll go to saw least,
like who's a respectedeconomist, he says, uh, the
scheme might help some firsthome buyers, but it has failed
to address the underlyingproblems with australia's
housing system.
And um, that is a really,really pertinent point here is
that these are all band-aidsolutions.
Yeah, they're not fundamentallyfixing the supply demand
(12:09):
imbalance.
Um, we do need those 1.2million dwellings that the
federal government's promised,but I I haven't seen them.
I don't know where they are,which is probably a good segue.
Speaker 3 (12:19):
I was about to say, it's a perfect time to switch
over to the second thing Iwanted to talk about today,
peter uh, which is primarily, Iguess, for our listeners in the
eastern suburbs.
But chris minns has announcedthat he is going to complete the
long, dormant, partiallycompleted Willara train station,
which is, you know, clearly acritical, critical corridor for
(12:45):
transport and one that we mustfill immediately.
But, cynicism aside, he's alsosaid, alongside the announcement
, he's going to rezone the areaand use the train station as
something of a hub to build10,000 new homes, assuming high
density is the only way that itcan occur, if anyone knows
Wallah, obviously it's a verysmall suburb, I mean given that
(13:07):
we've just talked about.
Speaker 1 (13:07):
So it'll triple, it'll nearly triple, the number
of residences in Wallah.
Speaker 3 (13:11):
Oh yeah, like insane change, given that we talk about
how supply is an issue you knowagain, on the surface, this
sounds like a great announcementfrom Chris Minns New train
station, better transport accesspipelines, more houses sounds
great.
As someone who has spent a lotof time in the east, grew up in
the area, this seems like aridiculous spot to not only
(13:33):
bother putting in another trainstation, but also seems like a
really unlikely position orlocation to complete 10,000
homes that are both done in anefficient enough time to have
any impact, but also at anaffordable price point.
I'm really interested to getyour thoughts on this whole
thing, to be honest.
Speaker 1 (13:53):
The price point's less of an issue.
I think there might be enoughpeople to take on these
dwellings at a commerciallyviable price for the developers
to build.
What I see is somethingcompletely different to what
you've, the points you've justoutlined, all of which have, you
know, merit, what?
What I clearly see the agendahere.
(14:15):
I don't know if it's a hiddenagenda or it's an open agenda,
but the government don't wantpeople to own cars.
Speaker 3 (14:23):
Yeah.
Speaker 1 (14:24):
What will come out next out of these 10,000 homes?
Here's my prediction is themajority of them won't have car
spaces.
Yeah, wouldn't be surprised.
So basically, what they aredoing with Sydney is they're
trying to drive it to pardon thepun drive Sydneysiders to a
point where they use the publicinfrastructure, the public
(14:44):
transport that's been put inplace because you've got a new
railway station here.
Obviously, we've got acompletely new metro system in
public transport.
That has taken place over thelast 10 years and clearly will
over the next 10, and they'rebuilding high density around
existing metro and railwaystations and new ones, as is
(15:06):
outlined here in Wallara.
So the take-out I get is that,even if Wallara could handle
10,000 new dwellings, keeping inmind that on average it's 2.5
persons per dwelling, so we'retalking an extra 25,000
residents in Willara.
Speaker 3 (15:25):
Yeah.
Speaker 1 (15:26):
And let's say every household has a car on average.
I don't see 10,000 more carscoming into Willara.
That's a really congested partof town as it is at the moment.
So I think you'll find thatincreasingly these new
developments are it's overpublic transport.
You don't need a car to livehere and they'll try and market
(15:48):
and sell that way of life.
Speaker 3 (15:51):
I must admit I don't completely mind that.
I think that's perfectlyreasonable, right?
If you choose and have thecapacity to live near the city
in a high-rise apartmentbuilding, you probably don't
need a car, right?
But I don't know.
It seems to me like in a citywhere we've spent years, for
better or worse, expandingsouthwest, building the
(16:12):
population away from the highdensity of the city, not
building sufficient publictransport routes.
I acknowledge the metro isfantastic.
I've ridden it in recent months.
It's such a great system.
I wish it was more prolific inSydney.
I think the whole city would bebetter for it.
I don't know.
I just don't see the merit orthe value in spending time and
money investing in a railwaystation in a location where
(16:36):
there's a railway station astone's throw away and jamming
more people into a suburb thatreally doesn't have the space
for it and, as you say, willthen only be suitable to a
certain percentage of thepopulation that either don't
have a car or don't need a caror have the capacity to then
travel where they need.
Speaker 1 (16:51):
Well, there's always more space.
I think it's playing the sky,right?
Well, I was just going tomention the sky.
There's always space if you'reprepared to go up, which clearly
they are.
Yeah, so the skyline in Sydneyin 25 years will be much, much
more condensed than what it isnow.
Speaker 3 (17:08):
Oh, look, and I think it needs to be.
I don't think that's, you know,whether we like it or not.
I think it has to be to supportthe growing population.
Speaker 1 (17:14):
Yeah, but let's come to that point.
Who asked for the growingpopulation?
Like Chris Minns is attacking.
We need to kill NIMBYism.
He's talking.
He's been quoted elsewhere inarticles I've read, saying most
Sydneysiders acknowledge we haveto do our bit.
I don't know.
I must have missed a vote.
When did we say that we weregoing to overcrowd Sydney to
(17:36):
this degree?
Former Labor Premier Bob Carrsaid Sydney was full two million
people ago.
Yeah, and here we are with theexisting Labor Premier carrying
on as though he's been given amandate to what double the
population of Sydney and thedwellings accordingly.
Like.
I just don't remember wheneverthis there was a discussion, a
(17:58):
debate where the people weresaying yeah, yeah, sydney's
empty.
Sydney needs more people.
Speaker 3 (18:03):
Let's fill it up.
Labor needs more voters, peter.
That's the uh, that's the thebottom line.
I look, yeah, I'm notoptimistic, this will even get
done.
I, I think he'll do the station.
I'm not overly convinced thathe'll get 10,000 high-rise
apartments into Woolara.
Between you and I, I thinkChris talks a lot and delivers
very little so far, but it'll beinteresting to see.
(18:25):
I tend to disagree with thepricing point.
I think there is plenty ofpeople that will absolutely want
to live in high-rise apartmentsin Woolara, but I cannot see
them being affordable in any way, shape or form, given its
proximity to the east, itsproximity to the city and then
its proximity to a.
But affordable to who?
Well, that's the great question, right, if we've got a problem
(18:48):
in Sydney at the moment thatpeople can't get a house deposit
together for their first home,then Chris coming out saying
that we're going to build 10,000affordable, or homes that are
more affordable in Wallara, Ijust think that's a ridiculous
statement.
I mean, it's one of the mostexpensive suburbs in the city.
I can't see how, uh, justchanging the density and slow
trickling some apartments isgoing to make it affordable for
(19:09):
anyone, anyone that you knowalready can't access a house
somewhere on a train line, youknow like.
Anyway, I may be just gettingfocused on the wrong point, but
the whole thing irks me whenwe've got much worse transport
issues across Sydney and a lotmore people moving out to, then
having to come all the way inand try and Well, he comes from
a theory Like if you stitch allof his comments together, you
(19:35):
get an idea of what hispsychology or thought pattern to
all of this is.
Speaker 1 (19:37):
And he says it's easier and cheaper and more
productive to build abovetransport hubs and railway links
than it is to see Sydneyexpanding further and further
west each time.
We need more housing.
So these were the comments thathe was making as soon as he was
elected just over two years ago.
So he's just following throughnow and this is what it looks
(19:59):
like 10,000 more dwellings inWallara.
I have little doubt that theywill sell them.
Speaker 3 (20:05):
I agree, but my point is and sell them well.
My point is, though I thinkthat is the right solution, it
is cheaper and it is easier, butI just don't see 10,000
apartments in Wallara beingaffordable.
Speaker 1 (20:16):
You know who's going to buy them, but if they sell
they're affordable.
Yeah, if you can sell 10,000 ofthem, and they all sell,
they're affordable to someone,to 10,000 people.
Speaker 3 (20:27):
Yeah, 10,000 investors who then lease them
out to international studentswho knows?
Speaker 1 (20:31):
Well, that's not true , because investors are just
skinny on the ground.
So that's another.
That's another cheap soundbitethat's in the media at the
moment where everyone's beatingup on investors.
You ask any real estate agentaround sydney.
At the moment.
Investors are selling outbecause the the regulation the
anti-landlord regulation hasjust been going up and up in
(20:52):
favor of the tenant for the lastthree years to the point where
they're just throwing the towelin.
So our ratio of landlordsselling out versus people saying
I've just bought a property orI need to rent my property out
coming in, we're probably seeinga bleed at the moment of four
to one.
Kieran.
Speaker 3 (21:09):
Yeah, well.
Speaker 1 (21:12):
So this cheap soundbite, when, when, when
we're losing a debate in theproperty mark, in the property
world, let's just blameinvestors because they're greedy
capitalists.
Speaker 3 (21:20):
It doesn't stack up yeah we need more investors at
the moment not not less well,luckily they'll have some uh
affordable in inverted commas uhcentrally located high-rise
apartments in the coming future.
Speaker 1 (21:35):
Yeah, but if they don't want cats in there, the
tenants are allowed to have acat and a dog in the apartment
to do who knows what in there?
Who wants to sign up for that?
Who knows?
Speaker 3 (21:45):
Yeah, we'll see if any of this comes to fruition.
I have no doubt, given thathe's been pretty firm on
infrastructure, he will completethe station at the very least.
Well, he won't complete thestation without the apartments,
because the apartments make thestation viable.
Yeah, it'll be a luxurioustwo-minute ride to the next
station.
Anyway, look as we move on.
(22:08):
Today, Peter, I understandthere are some new inflationary
figures out today, which, asalways, we love talking about
what inflation is doing, and, asalways, it's a great
opportunity for me to press youon whether or not you think it
may influence monetary policy inthe coming months.
Speaker 1 (22:24):
Oh, I think it will.
Yeah, There'll be no rate cutin September on these numbers,
Kieran.
That's a shame and it'sprobably put what most
economists thought going intotoday an almost certain interest
rate cut in November.
It's probably put that at a50-50 at the moment.
Speaker 3 (22:42):
Okay, so what are the numbers telling us?
Speaker 1 (22:45):
So they have.
Inflation climbed to 2.8%, it'shighest level sinceuly 2024,
for the month um, and it was upfrom 1.9 percent for the month
of june, according to the abs sothat's the overall inflation,
not the trimmed that's.
(23:06):
That's correct, so that, um theall-important, trimmed mean
inflation, the Reserve Bank'spreferred measure as it strips
out seasonality and volatileitems, came in steady at 2.7%.
Speaker 3 (23:19):
Okay, so we're holding firm, at least on the
underlying inflation, but thereis some inflationary rise.
Any indication in thecommentary you've heard as to
what may have driven that?
Speaker 1 (23:30):
Electricity.
Speaker 3 (23:31):
Electricity.
Speaker 1 (23:32):
Is that because the government's subsidies have
ended.
I believe so, because that's anoticeable jump and some people
are saying that there will.
Some economists are stillsaying there will be a cut in
November and it's a rogue numberand it's just sort of a
recalibration if you like anoutlier.
Mr Chalmers, the Treasurer,pointed to the end of the state
(23:56):
energy rebates among fuel andtravel prices for the higher
than expected number.
Volatile and one-off factors,including the end of state
energy rebates, travel pricesand fuel, were behind the
increase in today's results.
If you speak to anyone thatowns a sort of a restaurant, a
cafe business at the moment,they will let you know what
energy is doing to theirbusiness.
(24:16):
It's absolutely crueling them.
So he can say charmers can saythat it's the end to these
one-off factors and we'll goback to business as usual.
But the businesses that havelost those rebates will be
looking to pass them straightback onto the consumer in high
in terms of higher prices.
They have to.
Speaker 3 (24:33):
Yeah, I only saw on.
Might have been on Reddit.
Actually last night someone hadtaken a photo and made some
commentary about a cafe inSydney now with a $35 big
breakfast and how you know.
The comments were just scathingabout how have we got to this
point.
But, as you say, you know thecost of even running a household
with power and gas is throughthe roof.
(24:55):
I can only imagine keeping theburners on gas cooking in a cafe
or a restaurant long term.
It would be crippling.
Speaker 1 (25:01):
As you say, oh, it is crippling lots, and that's why
we're seeing so many of ourfavourite venues sadly disappear
, because the cost of survivalis just so high.
Speaker 3 (25:10):
Yeah, it's a shame I miss the $10 Thaiai lunch used
to be able to get is now nolonger ten dollars, that's for
sure.
Oh, that's right.
Uh, as we wrap up today, then,peter, it's always a good idea
to run through our good friendsat sqm research and their their
auction clearance data.
Uh, we didn't catch up lastweek, but I think the week
(25:30):
before we'd had seen maybe ourfourth or fifth week in a row
with clearance numbers.
The clearance rate held above50%.
How have things gone in thelast few days and how has it
correlated with what you've seenon the ground?
Speaker 1 (25:41):
Yeah, look, I think the numbers that SQM are putting
out are correlating with whatwe're seeing on the ground,
which is an improving market,kieran.
So in the last week there were997 auctions scheduled.
So in the last week there were997 auctions scheduled.
That's a increase in volumes,and it had a clearance rate of
56.5 percent, which is again anincrease in clearance rates.
(26:03):
So yeah, the market is.
The market is improving.
There's no two ways about that.
Interestingly, we always like tohighlight the spread between
sold prior and sold under thehammer.
Of the recorded auctionsuccesses 281 sold prior and 282
(26:23):
sold under the hammer.
So essentially a clean 50-50split, which is really common,
which is a really interestingsort of trend in the market, if
you like.
So, look, I think most realestate agents are pretty
comfortable with the state ofthe market.
The interest rates are doingtheir things, the media carrying
stories about Sydney, propertyprices are increasing again.
(26:46):
I don't know if they'reincreasing across the board, but
there are certain segments ofthe market that are on the front
foot, that are oversubscribedwith buyer interest, there's no
doubt.
And the odd property is goingwell above expectations, which
it always does, but the examplesof properties sort of getting
above expectations does seem tobe increasing.
(27:07):
That's the first anecdotal signto us on the ground that the
market is sort of heating up.
The second indicator that Ialways look for of a market
that's sort of really coming tolife is stale listings listings
that have been hanging around onthe market longer than the
vendors would like Start selling.
Buyers start saying I now seethe value in that property or
(27:29):
that apartment and I'm here tobuy it, the value in that
property or that apartment andI'm here to buy it.
And right across the spectrum Ihave seen an increase in
listings that have been outthere for a while that have
started selling.
Yeah, interesting.
Speaker 3 (27:42):
My only question for you on this topic today, then,
peter, we're now, as of the timeof recording, we're in the last
few days of winter before wehead into spring.
Traditionally, spring is a hottime for property.
There's always an influx and aflurry of activity.
Have you just in your microcosm, have you been having
conversations?
(28:02):
Have you seen the interestchanging?
Are the conversations shiftingamongst vendors in your sphere
or in your area to indicate thatthere is likely to be not only
the typical kind of springflurry but anything you know,
particularly strong or not thisyear in terms of volume as we
head into the warmer months?
Speaker 1 (28:22):
look, stock levels are going to go up.
It's a little bit difficult toget a read on it this year and
other agents are reporting thesame thing that month of rain
that we had from late July untilessentially last week in Sydney
.
Speaker 3 (28:37):
The month from February to.
Speaker 1 (28:39):
August, you mean it just?
Speaker 3 (28:41):
Did it stop in there?
Speaker 1 (28:42):
It did, but it probably didn't feel that way.
So when I look at most suburbsthat we service, I would
absolutely say that on-marketstock levels are still subdued.
There is certainly signs thatthey're starting to increase a
bit, but they are subdued.
There's no doubt about that,and I think the difficulty in
(29:03):
getting properties ready formarket contributed to that.
Speaker 3 (29:07):
Yeah, look, as always , great analysis, peter, some
really good topics today.
I hope our listeners have foundit useful and I know that I'll
continue to complain about mostof Chris Minns' decisions as we
move forward on the podcast.
But as always, my friend, Iappreciate you coming in and
talking with us today.
Speaker 1 (29:22):
My pleasure.
Thanks, Kieran.
Speaker 3 (29:23):
Thanks, peter, and thanks to everyone for listening
to Current Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (29:29):
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, gone.
So 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 (00:30):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me is my good friend,
mr Peter O'Malley.
Peter, kieran, g'day, how areyou going Good to?
I'm going well.
Good to see you, peter.
I want to jump in today'sepisode and there's quite a bit
to talk about.
I think all sadly in.
I guess, in our case all sadlycentered around political
(00:51):
announcements, politicaldecisions now, but as they
relate to property in Sydney, Iwant to start the discussion
today by talking about thefederal government's home
ownership changes.
They've made a range ofannouncements as part of their
election as to ways that theywere going to assist people to
get into the housing market.
One of the things that theytalked about was reducing the
(01:13):
amount of deposit required byfirst-time buyers to get into
the market without incurring alender's mortgage insurance or
LMI penalty.
Now, when it was first announced, this policy sounded relatively
tame and more as a I guess, abit of a popularity point, more
so than a really well fleshedout policy.
But now the government's comeout, made some changes and I
(01:35):
guess in some ways tried toreally beef up what this
actually means.
So to kick us off, what do you,I guess?
What do you understand aboutthe policy and then what are the
more recent kind ofconversation points around it
that I guess.
What do you understand aboutthe policy and then what are the
more recent kind ofconversation points around it?
That, I guess give it the focuswe want to talk about today.
Speaker 1 (01:50):
Well, look, the Herald, the ABC rather reported
it this week here and they saidthe scheme the first home by
guarantee would allow people tobuy a property their first
property with a 5% deposit andavoid paying lenders mortgage
insurance, as you've justoutlined.
Housing Minister Claire O'Neillsaid the scheme would allow
(02:12):
first home buyers to be payingdown their own mortgage rather
than rent sooner.
That's perhaps a seven or eightyear period where they're
choosing to pay off their ownmortgage rather than someone
else's, and that's a really goodthing.
The government is citingTreasury Department modelling
which suggests the total impacton house prices will be around
(02:34):
half a percent increase aftersix years.
Don't know how Treasury got tothat level, kieran, but there
you go.
Experts go on to say that theprices will actually be pushed
up a lot higher than that,particularly in the first couple
of years after the scheme isintroduced, given it will be
stimulus to the market, theproperty market.
Speaker 3 (02:55):
So a couple of things to unpack there, first and
foremost for people that don'tunderstand or don't know much
about LMI what exactly is LMI,and what kind of impact does it
really have on someone who'strying to put together a deposit
for a property?
Speaker 1 (03:09):
Yeah, look, it's often the difference between
able to enter the market and notbe able to enter the market for
a lot of young people, right?
So if you can't get a deposit ofa certain size, the mortgage
lender will say to the borroweryes, we're prepared to lend you
that money.
We can see that your earningsand your earnings are likely to
(03:30):
improve as your careerprogresses, but based on your
existing earnings, we can seethat you can afford to pay the
property back.
However, you don't have a largeenough deposit to for us just
to give you the money straightout.
So therefore we'd like somemortgage lenders insurance in
place here to protect us shouldyou the money straight out.
So therefore, we'd like somemortgage lenders insurance in
place here to protect us shouldthe worst happen and you fall
(03:50):
over in terms of repayment.
That can be a significant sumof money and that can be the
difference where you can have afirst home buyer who scraped
together 5% or 10% deposit.
If they were, in theory, payinga mortgage instead of paying
rent, they could make ends meet,but they can't quite get to
that lender's mortgage insuranceto allow them to enter the
(04:12):
marketplace.
Speaker 3 (04:13):
Okay.
So as a practical example,let's say someone had saved
$50,000 for a deposit and theythought this might be enough to
make an offer on a property, butthey haven't met the 20%
threshold or whatever the LVR isthat's being sought at the time
and theoretically then thatlender's mortgage insurance
comes off, whatever depositamount they might have.
(04:33):
So all of a sudden they're evenshorter from where they need to
be.
Is that the concept?
Oh well, they wouldn't get theloan under the current structure
, they just wouldn't get it atall.
Speaker 1 (04:40):
yeah, so going forward, the government will say
to approved borrowers we cansee that, based on your career
earnings, where you're going tothe loan amount that you're
looking to take out, that you'rea good and safe bet.
So the government will step inand make sure that you don't
have to pay mortgage insurance.
Speaker 3 (05:02):
Okay, so I guess a very cursory level sounds like a
great incentive right, a wayfor the government to stimulate
younger couples, young singles,whatever, into the property
market you mentioned.
The treasury modelling suggeststhat property prices will
increase 0.5% over six years offthe back of this.
Given that Sydney propertyincreases, you know more than
that, sometimes in the month.
(05:23):
How you know, how do you thinktreasury actually came to this
figure and, realistically, basedon your experience with other
incentive schemes over the yearsthat you've been in real estate
, what do you think the actualimpact is likely to be here?
Speaker 1 (05:36):
yeah, look, when it comes to treasury's forecast
there, I don't think you cantake it with a pinch of salt.
That's's ridiculous.
Yeah, it really is.
Speaker 3 (05:45):
The property market literally could go up that much
by the time we finish thisrecording.
Speaker 1 (05:50):
Indeed.
Well, on the announcement, orcertainly the introduction, come
October 2025, that's quitepossible.
That's right.
Yeah, so this policy feeds thedemand side in the housing
market further, yep, and historytells us that whenever the
governments throw an incentiveinto the demand side of the
(06:11):
equation, the market rises bymore than the benefit on offer.
Speaker 3 (06:15):
Yeah.
Speaker 1 (06:16):
So, in very basic terms, ones that most people can
remember, in 2008, when theworld was in meltdown, the Rudd
government introduced I think itwas seven thousand dollar bonus
for first home buyers under onhomes under five hundred
thousand dollars and almostovernight the market rose during
the gfc, when wall streetnearly completely imploded,
(06:40):
sydney property prices underfive hundred thousand000 rose by
$14,000, $21,000 as first homebuyers chased a $7,000 incentive
.
So for Treasury to say that thiswould only impact property
prices by half a percent oversix years.
I think what they're reallyignoring there is the unintended
(07:00):
consequences and this is whatbureaucrats and treasury
departments are known for whichis modelling, where they change
one thing, believing thatnothing else in the model will
change based on the new policy,other than people right at the
point of wanting lender'smortgage insurance and
(07:21):
everything will be modelled fromthere.
But when you change the rules,you change behaviours, and if
you offer an incentive like this, you will change the psychology
of first home buyers and youwill end up creating a which
others can decide whether it'sgood or bad.
I'm just speaking purelyclinically about it.
(07:41):
You will create a surge ofdemand with this policy here.
Speaker 3 (07:46):
Yeah, and I can't help but wonder if the
government's also made thesemodels or predicated them on
this false belief they have thatthey're delivering 1.25 million
new homes, you know, over thisshort period of time and that of
course, their supply effortsare going to match the demand
that's increased through this.
I mean, the demand's alreadyvery high and we have that issue
across Sydney in general,supply is not coming fast enough
(08:08):
and you know, I agree with you.
I can't help but think thatthey've said well, under our
proposal, this will be finebecause we're building millions
more houses, but but of course,the reality is so different from
the messaging.
Speaker 1 (08:23):
Yeah, if there's weakness in the Sydney property
market or the inner city marketat the moment, it is at the
bottom end or the lower end ofpricing.
And what this is designed to doand the Housing Minister,
claire O'Neill, says as much inher statement there that it's a
seven or eight year period wherea first home buyer is choosing
to pay off their own mortgagerather than someone else's, ie
renting.
So this is going to.
(08:45):
This is an attempt to rein inthe rental market as well, which
hasn't really been discussed intoo much of the media.
Commentary about this is thatif you can get young people
saying rents are too high, I'mbetter off buying my own
property, you will have thebottom end of the market come
(09:07):
alive as first home buyers makethat switch from being a tenant
to an owner-occupier.
Speaker 3 (09:14):
Yeah, which, as you say, theoretically should bring
down rental demand.
My final question on this topic, then Peter the Herald, who
also wrote an article about this, mentioned that the scheme
itself, unlike previousiterations of government schemes
in this space, will have nocaps on the number of applicants
.
That said, one of thesuggestions that's kind of been
(09:35):
made by some parties, who mayhave vested interests against
the government making thischange, have said that, though
there are no kind of functionalcaps, there will be caps in
reality, because the initialsurge will see people priced out
of the then five percentrequirement for entry anyway.
Do you think it's going to be,or do you think there's likely
to be, a scenario where there'sso much demand and so much
(09:58):
interest and such a surge inprices that all of a sudden
people can't even get to the 5%required in this case?
Speaker 1 (10:05):
I think if the market became that unhinged, they
would have to step in and slowit down in that scenario.
Speaker 3 (10:13):
So one of the things they've done here is lifted the
caps on the.
There's no capital number ofapplicants, but there is a
ceiling on how much you can.
You know what the price thatyou can go to, and I think it's
1.5 million.
Speaker 1 (10:24):
It's 1.5 million in sydney, but income limits on
one's eligibility to access thescheme has also been removed
right, so they could implementincome limits, or they could
implement.
Speaker 3 (10:33):
So let's say, you don't know you don't.
Speaker 1 (10:35):
You don't own a property.
Yeah, um, and for good luck toyou, for whatever reason, you've
got a three or a five hundredthousand dollar job.
Um, you, you can, you can claimthis incentive does that?
Speaker 3 (10:47):
to me that seems like again.
Just there's got to be someinequity there, right?
Because if you, if you earnhalf a million dollars a year,
let's say arbitrarily, and youhaven't bought a house for
whatever reason, you couldaccess this game, use, bugger
all deposit and then you have somuch more free capital than
someone who's earning fiftythousand dollars a year to then
invest in some other high yieldplus.
Speaker 1 (11:05):
You've got your foot on the property ladder I mean I
was a little bit surprised tosee that one particularly
environment we're in, where therich are getting richer
post-covid and the, you know,the middle, the middle down are
getting sort of crunched byhigher interest rates, cost of
living, the challenges of theeconomy et cetera.
Yeah, to remove one'seligibility based on their
(11:26):
earnings seemed like you wouldfuel it for people that, for
whatever reason, haven'tpurchased a property yet but are
big earners.
Speaker 3 (11:34):
Yeah well, it just seems like there's an easy path
for them to make even more moneyquicker than anyone else.
But you know well, the timewill be the judge of how well
this works out, but I'm yeahinterested to watch the space.
Speaker 1 (11:45):
I think well if, if we can say I'll go to saw least,
like who's a respectedeconomist, he says, uh, the
scheme might help some firsthome buyers, but it has failed
to address the underlyingproblems with australia's
housing system.
And um, that is a really,really pertinent point here is
that these are all band-aidsolutions.
Yeah, they're not fundamentallyfixing the supply demand
(12:09):
imbalance.
Um, we do need those 1.2million dwellings that the
federal government's promised,but I I haven't seen them.
I don't know where they are,which is probably a good segue.
Speaker 3 (12:19):
I was about to say, it's a perfect time to switch
over to the second thing Iwanted to talk about today,
peter uh, which is primarily, Iguess, for our listeners in the
eastern suburbs.
But chris minns has announcedthat he is going to complete the
long, dormant, partiallycompleted Willara train station,
which is, you know, clearly acritical, critical corridor for
(12:45):
transport and one that we mustfill immediately.
But, cynicism aside, he's alsosaid, alongside the announcement
, he's going to rezone the areaand use the train station as
something of a hub to build10,000 new homes, assuming high
density is the only way that itcan occur, if anyone knows
Wallah, obviously it's a verysmall suburb, I mean given that
(13:07):
we've just talked about.
Speaker 1 (13:07):
So it'll triple, it'll nearly triple, the number
of residences in Wallah.
Speaker 3 (13:11):
Oh yeah, like insane change, given that we talk about
how supply is an issue you knowagain, on the surface, this
sounds like a great announcementfrom Chris Minns New train
station, better transport accesspipelines, more houses sounds
great.
As someone who has spent a lotof time in the east, grew up in
the area, this seems like aridiculous spot to not only
(13:33):
bother putting in another trainstation, but also seems like a
really unlikely position orlocation to complete 10,000
homes that are both done in anefficient enough time to have
any impact, but also at anaffordable price point.
I'm really interested to getyour thoughts on this whole
thing, to be honest.
Speaker 1 (13:53):
The price point's less of an issue.
I think there might be enoughpeople to take on these
dwellings at a commerciallyviable price for the developers
to build.
What I see is somethingcompletely different to what
you've, the points you've justoutlined, all of which have, you
know, merit, what?
What I clearly see the agendahere.
(14:15):
I don't know if it's a hiddenagenda or it's an open agenda,
but the government don't wantpeople to own cars.
Speaker 3 (14:23):
Yeah.
Speaker 1 (14:24):
What will come out next out of these 10,000 homes?
Here's my prediction is themajority of them won't have car
spaces.
Yeah, wouldn't be surprised.
So basically, what they aredoing with Sydney is they're
trying to drive it to pardon thepun drive Sydneysiders to a
point where they use the publicinfrastructure, the public
(14:44):
transport that's been put inplace because you've got a new
railway station here.
Obviously, we've got acompletely new metro system in
public transport.
That has taken place over thelast 10 years and clearly will
over the next 10, and they'rebuilding high density around
existing metro and railwaystations and new ones, as is
(15:06):
outlined here in Wallara.
So the take-out I get is that,even if Wallara could handle
10,000 new dwellings, keeping inmind that on average it's 2.5
persons per dwelling, so we'retalking an extra 25,000
residents in Willara.
Speaker 3 (15:25):
Yeah.
Speaker 1 (15:26):
And let's say every household has a car on average.
I don't see 10,000 more carscoming into Willara.
That's a really congested partof town as it is at the moment.
So I think you'll find thatincreasingly these new
developments are it's overpublic transport.
You don't need a car to livehere and they'll try and market
(15:48):
and sell that way of life.
Speaker 3 (15:51):
I must admit I don't completely mind that.
I think that's perfectlyreasonable, right?
If you choose and have thecapacity to live near the city
in a high-rise apartmentbuilding, you probably don't
need a car, right?
But I don't know.
It seems to me like in a citywhere we've spent years, for
better or worse, expandingsouthwest, building the
(16:12):
population away from the highdensity of the city, not
building sufficient publictransport routes.
I acknowledge the metro isfantastic.
I've ridden it in recent months.
It's such a great system.
I wish it was more prolific inSydney.
I think the whole city would bebetter for it.
I don't know.
I just don't see the merit orthe value in spending time and
money investing in a railwaystation in a location where
(16:36):
there's a railway station astone's throw away and jamming
more people into a suburb thatreally doesn't have the space
for it and, as you say, willthen only be suitable to a
certain percentage of thepopulation that either don't
have a car or don't need a caror have the capacity to then
travel where they need.
Speaker 1 (16:51):
Well, there's always more space.
I think it's playing the sky,right?
Well, I was just going tomention the sky.
There's always space if you'reprepared to go up, which clearly
they are.
Yeah, so the skyline in Sydneyin 25 years will be much, much
more condensed than what it isnow.
Speaker 3 (17:08):
Oh, look, and I think it needs to be.
I don't think that's, you know,whether we like it or not.
I think it has to be to supportthe growing population.
Speaker 1 (17:14):
Yeah, but let's come to that point.
Who asked for the growingpopulation?
Like Chris Minns is attacking.
We need to kill NIMBYism.
He's talking.
He's been quoted elsewhere inarticles I've read, saying most
Sydneysiders acknowledge we haveto do our bit.
I don't know.
I must have missed a vote.
When did we say that we weregoing to overcrowd Sydney to
(17:36):
this degree?
Former Labor Premier Bob Carrsaid Sydney was full two million
people ago.
Yeah, and here we are with theexisting Labor Premier carrying
on as though he's been given amandate to what double the
population of Sydney and thedwellings accordingly.
Like.
I just don't remember wheneverthis there was a discussion, a
(17:58):
debate where the people weresaying yeah, yeah, sydney's
empty.
Sydney needs more people.
Speaker 3 (18:03):
Let's fill it up.
Labor needs more voters, peter.
That's the uh, that's the thebottom line.
I look, yeah, I'm notoptimistic, this will even get
done.
I, I think he'll do the station.
I'm not overly convinced thathe'll get 10,000 high-rise
apartments into Woolara.
Between you and I, I thinkChris talks a lot and delivers
very little so far, but it'll beinteresting to see.
(18:25):
I tend to disagree with thepricing point.
I think there is plenty ofpeople that will absolutely want
to live in high-rise apartmentsin Woolara, but I cannot see
them being affordable in any way, shape or form, given its
proximity to the east, itsproximity to the city and then
its proximity to a.
But affordable to who?
Well, that's the great question, right, if we've got a problem
(18:48):
in Sydney at the moment thatpeople can't get a house deposit
together for their first home,then Chris coming out saying
that we're going to build 10,000affordable, or homes that are
more affordable in Wallara, Ijust think that's a ridiculous
statement.
I mean, it's one of the mostexpensive suburbs in the city.
I can't see how, uh, justchanging the density and slow
trickling some apartments isgoing to make it affordable for
(19:09):
anyone, anyone that you knowalready can't access a house
somewhere on a train line, youknow like.
Anyway, I may be just gettingfocused on the wrong point, but
the whole thing irks me whenwe've got much worse transport
issues across Sydney and a lotmore people moving out to, then
having to come all the way inand try and Well, he comes from
a theory Like if you stitch allof his comments together, you
(19:35):
get an idea of what hispsychology or thought pattern to
all of this is.
Speaker 1 (19:37):
And he says it's easier and cheaper and more
productive to build abovetransport hubs and railway links
than it is to see Sydneyexpanding further and further
west each time.
We need more housing.
So these were the comments thathe was making as soon as he was
elected just over two years ago.
So he's just following throughnow and this is what it looks
(19:59):
like 10,000 more dwellings inWallara.
I have little doubt that theywill sell them.
Speaker 3 (20:05):
I agree, but my point is and sell them well.
My point is, though I thinkthat is the right solution, it
is cheaper and it is easier, butI just don't see 10,000
apartments in Wallara beingaffordable.
Speaker 1 (20:16):
You know who's going to buy them, but if they sell
they're affordable.
Yeah, if you can sell 10,000 ofthem, and they all sell,
they're affordable to someone,to 10,000 people.
Speaker 3 (20:27):
Yeah, 10,000 investors who then lease them
out to international studentswho knows?
Speaker 1 (20:31):
Well, that's not true , because investors are just
skinny on the ground.
So that's another.
That's another cheap soundbitethat's in the media at the
moment where everyone's beatingup on investors.
You ask any real estate agentaround sydney.
At the moment.
Investors are selling outbecause the the regulation the
anti-landlord regulation hasjust been going up and up in
(20:52):
favor of the tenant for the lastthree years to the point where
they're just throwing the towelin.
So our ratio of landlordsselling out versus people saying
I've just bought a property orI need to rent my property out
coming in, we're probably seeinga bleed at the moment of four
to one.
Kieran.
Speaker 3 (21:09):
Yeah, well.
Speaker 1 (21:12):
So this cheap soundbite, when, when, when
we're losing a debate in theproperty mark, in the property
world, let's just blameinvestors because they're greedy
capitalists.
Speaker 3 (21:20):
It doesn't stack up yeah we need more investors at
the moment not not less well,luckily they'll have some uh
affordable in inverted commas uhcentrally located high-rise
apartments in the coming future.
Speaker 1 (21:35):
Yeah, but if they don't want cats in there, the
tenants are allowed to have acat and a dog in the apartment
to do who knows what in there?
Who wants to sign up for that?
Who knows?
Speaker 3 (21:45):
Yeah, we'll see if any of this comes to fruition.
I have no doubt, given thathe's been pretty firm on
infrastructure, he will completethe station at the very least.
Well, he won't complete thestation without the apartments,
because the apartments make thestation viable.
Yeah, it'll be a luxurioustwo-minute ride to the next
station.
Anyway, look as we move on.
(22:08):
Today, Peter, I understandthere are some new inflationary
figures out today, which, asalways, we love talking about
what inflation is doing, and, asalways, it's a great
opportunity for me to press youon whether or not you think it
may influence monetary policy inthe coming months.
Speaker 1 (22:24):
Oh, I think it will.
Yeah, There'll be no rate cutin September on these numbers,
Kieran.
That's a shame and it'sprobably put what most
economists thought going intotoday an almost certain interest
rate cut in November.
It's probably put that at a50-50 at the moment.
Speaker 3 (22:42):
Okay, so what are the numbers telling us?
Speaker 1 (22:45):
So they have.
Inflation climbed to 2.8%, it'shighest level sinceuly 2024,
for the month um, and it was upfrom 1.9 percent for the month
of june, according to the abs sothat's the overall inflation,
not the trimmed that's.
(23:06):
That's correct, so that, um theall-important, trimmed mean
inflation, the Reserve Bank'spreferred measure as it strips
out seasonality and volatileitems, came in steady at 2.7%.
Speaker 3 (23:19):
Okay, so we're holding firm, at least on the
underlying inflation, but thereis some inflationary rise.
Any indication in thecommentary you've heard as to
what may have driven that?
Speaker 1 (23:30):
Electricity.
Speaker 3 (23:31):
Electricity.
Speaker 1 (23:32):
Is that because the government's subsidies have
ended.
I believe so, because that's anoticeable jump and some people
are saying that there will.
Some economists are stillsaying there will be a cut in
November and it's a rogue numberand it's just sort of a
recalibration if you like anoutlier.
Mr Chalmers, the Treasurer,pointed to the end of the state
(23:56):
energy rebates among fuel andtravel prices for the higher
than expected number.
Volatile and one-off factors,including the end of state
energy rebates, travel pricesand fuel, were behind the
increase in today's results.
If you speak to anyone thatowns a sort of a restaurant, a
cafe business at the moment,they will let you know what
energy is doing to theirbusiness.
(24:16):
It's absolutely crueling them.
So he can say charmers can saythat it's the end to these
one-off factors and we'll goback to business as usual.
But the businesses that havelost those rebates will be
looking to pass them straightback onto the consumer in high
in terms of higher prices.
They have to.
Speaker 3 (24:33):
Yeah, I only saw on.
Might have been on Reddit.
Actually last night someone hadtaken a photo and made some
commentary about a cafe inSydney now with a $35 big
breakfast and how you know.
The comments were just scathingabout how have we got to this
point.
But, as you say, you know thecost of even running a household
with power and gas is throughthe roof.
(24:55):
I can only imagine keeping theburners on gas cooking in a cafe
or a restaurant long term.
It would be crippling.
Speaker 1 (25:01):
As you say, oh, it is crippling lots, and that's why
we're seeing so many of ourfavourite venues sadly disappear
, because the cost of survivalis just so high.
Speaker 3 (25:10):
Yeah, it's a shame I miss the $10 Thaiai lunch used
to be able to get is now nolonger ten dollars, that's for
sure.
Oh, that's right.
Uh, as we wrap up today, then,peter, it's always a good idea
to run through our good friendsat sqm research and their their
auction clearance data.
Uh, we didn't catch up lastweek, but I think the week
(25:30):
before we'd had seen maybe ourfourth or fifth week in a row
with clearance numbers.
The clearance rate held above50%.
How have things gone in thelast few days and how has it
correlated with what you've seenon the ground?
Speaker 1 (25:41):
Yeah, look, I think the numbers that SQM are putting
out are correlating with whatwe're seeing on the ground,
which is an improving market,kieran.
So in the last week there were997 auctions scheduled.
So in the last week there were997 auctions scheduled.
That's a increase in volumes,and it had a clearance rate of
56.5 percent, which is again anincrease in clearance rates.
(26:03):
So yeah, the market is.
The market is improving.
There's no two ways about that.
Interestingly, we always like tohighlight the spread between
sold prior and sold under thehammer.
Of the recorded auctionsuccesses 281 sold prior and 282
(26:23):
sold under the hammer.
So essentially a clean 50-50split, which is really common,
which is a really interestingsort of trend in the market, if
you like.
So, look, I think most realestate agents are pretty
comfortable with the state ofthe market.
The interest rates are doingtheir things, the media carrying
stories about Sydney, propertyprices are increasing again.
(26:46):
I don't know if they'reincreasing across the board, but
there are certain segments ofthe market that are on the front
foot, that are oversubscribedwith buyer interest, there's no
doubt.
And the odd property is goingwell above expectations, which
it always does, but the examplesof properties sort of getting
above expectations does seem tobe increasing.
(27:07):
That's the first anecdotal signto us on the ground that the
market is sort of heating up.
The second indicator that Ialways look for of a market
that's sort of really coming tolife is stale listings listings
that have been hanging around onthe market longer than the
vendors would like Start selling.
Buyers start saying I now seethe value in that property or
(27:29):
that apartment and I'm here tobuy it, the value in that
property or that apartment andI'm here to buy it.
And right across the spectrum Ihave seen an increase in
listings that have been outthere for a while that have
started selling.
Yeah, interesting.
Speaker 3 (27:42):
My only question for you on this topic today, then,
peter, we're now, as of the timeof recording, we're in the last
few days of winter before wehead into spring.
Traditionally, spring is a hottime for property.
There's always an influx and aflurry of activity.
Have you just in your microcosm, have you been having
conversations?
(28:02):
Have you seen the interestchanging?
Are the conversations shiftingamongst vendors in your sphere
or in your area to indicate thatthere is likely to be not only
the typical kind of springflurry but anything you know,
particularly strong or not thisyear in terms of volume as we
head into the warmer months?
Speaker 1 (28:22):
look, stock levels are going to go up.
It's a little bit difficult toget a read on it this year and
other agents are reporting thesame thing that month of rain
that we had from late July untilessentially last week in Sydney
.
Speaker 3 (28:37):
The month from February to.
Speaker 1 (28:39):
August, you mean it just?
Speaker 3 (28:41):
Did it stop in there?
Speaker 1 (28:42):
It did, but it probably didn't feel that way.
So when I look at most suburbsthat we service, I would
absolutely say that on-marketstock levels are still subdued.
There is certainly signs thatthey're starting to increase a
bit, but they are subdued.
There's no doubt about that,and I think the difficulty in
(29:03):
getting properties ready formarket contributed to that.
Speaker 3 (29:07):
Yeah, look, as always , great analysis, peter, some
really good topics today.
I hope our listeners have foundit useful and I know that I'll
continue to complain about mostof Chris Minns' decisions as we
move forward on the podcast.
But as always, my friend, Iappreciate you coming in and
talking with us today.
Speaker 1 (29:22):
My pleasure.
Thanks, Kieran.
Speaker 3 (29:23):
Thanks, peter, and thanks to everyone for listening
to Current Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (29:29):
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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