September 17, 2025 • 29 mins
Hosts Ciaran O'Brien and Peter O'Malley break down Sydney’s spring property market as a surge of new listings puts pressure on clearance rates. With 1,115 auctions scheduled in a single week and clearance rates slipping to 51%, many vendors are choosing to sell prior rather than risk auction day.
We also discuss:
- Growing employment concerns with job losses in banking and the rise of AI/offshore outsourcing
- The looming stagflation threat as unemployment and inflation risk moving in opposite directions
- Sydney rental vacancy rates tightening to 1.4% (down from 1.6% last year) despite earlier “crisis” warnings
- Annual Sydney rental price growth at 4.2%, double the 2.1% inflation rate
- Even stronger rental growth in other cities: Hobart (10.6%), Darwin (8.9%), Brisbane (7.3%)
- NSW government’s Parramatta Road redevelopment plans — 3,000 new homes from Camperdown to Leichhardt
- Infrastructure bottlenecks raising doubts about realistic housing supply increases
- First home buyer incentives (commencing October 1st) influencing some buyers to delay purchases
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 Mr Peter O'Malley
.
Peter Kieran, great to see you,great to see you, buddy.
I just want to jump in todayand kick off.
We'd love to do an episode thatjust focuses on the market in
Sydney.
We've now entered springofficially, so I thought we
would be a really goodopportunity just to talk about
(00:50):
how, last time we spoke, we gavea sense of what was happening
in the market, but now we've hada little bit of time to get a
feel for the buyers, get a feelfor those vendors coming to
market.
So, if you can, why don't youtake our listeners through what
the Sydney market's looking likeat the moment and do you feel
there's been a dynamic shift atall in the last few weeks or so
since spring really started inearnest?
Speaker 1 (01:11):
Thanks, Kieran, look, it's fair to say that the
Sydney market is dealing with adeluge of stock, as happens in
spring, yep.
So the auction clearance rate,as our listeners would know from
previous weeks, was sort of inthe mid-50s, heading towards 60,
suggestive of a really strongenvironment for vendors.
(01:33):
The auction clearance rate lastweek, on SQM researchers'
numbers, was 51%.
So we have seen a pullbackthere and that has pulled back
on the back of an increase instock levels with 1,115
properties up for auction, whichis a bit of a sharp jump on the
norm, yep.
So there's no doubt that themarket is struggling to absorb
(01:55):
extra stock levels.
At the moment it's still above50%.
So that's a good story in andof its own right.
So that's a good story in andof its own right.
I think the next mostinteresting stat is that of the
successful auction campaigns,310 sold prior, meaning that the
owners were more than happy tograb the money and run, and 263
sold under the hammer.
(02:16):
So there's a very, very clearbreakout where most weeks that's
at a 50-50, those two numbers,as you know, it breaks 50-50.
But there's a very clearpreference last week of the
successful sales to grab themoney before auction day.
Speaker 3 (02:32):
Do you think that some of that reduction in the
clearance rate is related tojust the idea that people list
in spring as a reflex, almost,as opposed to necessarily having
those more desirable propertiesthat may benefit from a sale
period?
Or you know, I just get thesense that the spring market and
maybe the post-Australia Daymarket, people just list because
that's the time to do it, sothere's possibly a deluge of
(02:54):
less or lesser desirableproperty coming to market.
Would that be reasonable?
Speaker 1 (02:59):
Look.
No, I wouldn't say so.
I wouldn't say it comes back tothe quality of the property.
The listing numbers are up.
Therefore the clearance rate isis is down by a few percentage
points happens every year inspring.
We, we spend all year saying topeople don't, don't fall into
the trap of thinking, you know,spring is this boom time where
it'll go crazy.
(03:19):
Yes, we know your garden lookbetter, we know your house
presents better in spring, butthe problem is, so does everyone
else's, and if everyone comesto the market at the same time,
suddenly you've got the sameamount of buyers dealing with a
much broader base of supply.
And that's what we're seeing atthe moment.
Speaker 3 (03:35):
So if the market is operating in a healthy way,
would you expect that thatclearance rate will just creep
up over the coming weeks as themarket adjusts to the extra
stock on hand.
Speaker 1 (03:45):
Well, look, when we last caught up, we did say that
we felt that stock levels werebeing held back artificially by
the weather pattern, in Sydneyspecifically, and that the true
spring market will startprobably a month later.
This year it's normally in full, you know raw, by mid-September
, but it's looking like it'll bepost-October long weekend now
(04:06):
when you do see the big surge inlisting numbers and that's
driven by the fact that peoplewere getting their properties
ready for market through July,august and couldn't catch a
break with the weather.
So you know, we need to counterthat with the fact that there
was, you know, a lot of highlypublicised job losses, mass job
losses in the banking sectorlast week.
Um, that would have rubbed on,but you know, by a sentiment a
(04:29):
bit.
Um, increasingly we're hearingum through channels that
companies are looking tooutsource jobs to ai and
offshoring and um, that's uh,you know we've got some big
employment data coming through,whether it shows up in the next
you know employment reading orthe one after, but that is
something that we're also seeingout.
There is that, um, lots of um,you know people are, you know,
(04:53):
being spoken to about redundancy.
So, both in my social networkand professional network.
Um, there there is uh, you knowthere's not the buoyant jobs
environment that it has been.
Speaker 3 (05:05):
It's interesting.
You mentioned jobs and we won'tspend any real time on it today
, but obviously the job figuresare due to release tomorrow and
they're a major factor of whatmay dictate or put pressure on
the RBA to make their next ratesdecision, which is at the end
of this month.
Just based on what you've said,and based on your observations,
conversations and your kind ofread, what do you think the
(05:28):
figures are likely to look like?
Do you think that we're goingto see an increase in
unemployment?
Do you think we're going to seeit remain stable or drop?
Do you know?
You mentioned the the banksector's cutting a lot.
Could that potentially, youknow, pave the way for other
major banks or majorcorporations to do the same
thing?
I mean, are we entering a bitof a cycle now where the
economic environment getsslightly tougher again, whilst
(05:50):
the economy itself is actuallyperforming pretty well?
Speaker 1 (05:53):
Yeah, look, I don't pretend to know what the next
employment number is, because Idon't know how it's calculated,
whether these job losses thatwe've been hearing about in the
last two weeks are captured inthis reporting period or it's
the one after.
I do suspect that you might seesome upward pressure on the
unemployment rate in the nextsix to 12 months, because
(06:15):
there's no doubt thatcorporations I won't just blame
the banks, even though that'sfun and easy to do- Please don't
but there's no doubt thatcorporations um who are
struggling to grow their topline revenue, um to to grow
their profits, are seeing thatthey have to cut costs yeah
and and the easiest way for acorporation to cut costs at the
(06:36):
moment is to outsource,outsource offshore jobs,
outsource to ai or send the joboffshore, and that's what's
happening and that's why we'refeeling it in the employment
market here.
So you know just a couple of um.
A couple of weeks ago, I askedone of the property managers in
the company how's your day going?
She said I'm not real well.
And um, I said why?
(06:57):
What's going on?
And?
And she just said straight outlook, I just feels like everyone
I ring at the moment's beingmade redundant.
And then I've got to put awhole plan of action in place
around that because the abilityto complete their lease is not
quite there.
So we've got to go back to thelandlords and renegotiate terms
and an early exit and penaltyfree, and they've lost their job
.
Would you be gracious enough tolet them find a new tenant
(07:20):
without stinging them a penaltyand all of that?
So hopefully this is just ashort-term blip and some of
these corporations are justcleaning up.
Um, you know some um, you knowrough edges, if you like, in in
in the end of the year.
Uh, close, um, but we areseeing it more and more, there's
no doubt.
So I don't know if that plays arole in the auction clearance
(07:43):
rate.
Pulling back is the primarypoint, kieran, but um there, but
there is some pressure outthere.
Speaker 3 (07:49):
Oh look, definitely I wasn't actually going to talk
about this, but I read anarticle and you haven't.
So I'm not going to ask youspecifics or to my knowledge you
haven't but I only readsomething earlier that in
Toowoomba, for example, there'ssomething like 75% of households
are now officially undermortgage stress and most of
those are now missing mortgagerepayments.
Now, obviously that's onemicrocosm across the country,
(08:12):
but in a period where theeconomy feels like rates are
coming down, psychologically itfeels like we're probably on the
improve we do have these placeswhere people are being made
redundant, where there arecertain sectors and industries
that job security may not beguaranteed and we could very
well see some mortgage stresscreeping back.
You know significant mortgagestress keeping creeping back
(08:34):
into the property market, as yousay, at a time where stocks
coming on and we've got allthese promises of government
incentive.
You know there's so much goingon that sounds positive, but in
fact that's really notnecessarily what's happening on
the ground.
Speaker 1 (08:45):
Yeah.
So look, I guess what you'retouching on there and I know
before we started recordingtoday, the big number you're
looking to see drop is theAustralian unemployment rate,
which is great, yeah.
But another big number thatwill drop by the time the
audience is listening to thispodcast is what does the US do
overnight with their interestrates?
And it is actually related towhat you've just explained there
in Toowoomba, because inAmerica what they've got at the
(09:07):
moment is an inflation ratethat's going up.
That suggests you shouldn't cutrates, but it's almost
universally agreed that the USwill cut their interest rates.
Speaker 3 (09:15):
The Federal Reserve will cut overnight and deliver
the market a 0.25% rate cut andI think for reference they're
still at 4.5, I think cash ratethey're quite high cut and I
think, for reference they'rethey're still at 4.5, I think,
cash rate.
Speaker 1 (09:26):
They're quite high.
Um, I'm pretty sure I'm not.
I'm not, I'm not.
I don't pretend to know wheretheir cash rates at, but what's
happened is that we've oftenspoken about and we've asked
people that are smarter than youand I on this what happens when
a central bank has to choosebetween jobs or inflation.
Yeah, because they say, our jobis a dual mandate between the
Federal Reserve and the RBA.
(09:47):
For that matter, we have a dualmandate it's to manage price
stability and employment.
But what about when they're atodds, which is where we're
headed to now, which is You'retalking about the stagflation.
Stagflation.
Well done, exactly right.
We're heading towards thisstagflation environment where
unemployment is creeping up, butso is inflation.
So if you cut rates to get thejobs going, you send inflation
(10:11):
higher, and this is why you'vegot gold.
That's running.
You know, we, we spoke, youknow, two weeks ago, about the
gold price and how strong it was.
Well, I can tell you it's onlygone one way since it's just
gone straight up.
Yeah, um, it's because the usfederal reserve is threatening
to be pressured by trump and cutrates at a time that
inflation's going up.
Now that will fuel inflationfurther and that inflation will
(10:35):
find its way to australia.
And then the rba will have thesame dilemma that the us federal
reserve have got now, which isdo we cut rates to keep people
employed but fuel inflationagain, or do we keep rates on
hold, fighting inflation butdriving our unemployment rate up
?
Speaker 3 (10:54):
Yeah, it's a tough decision, right?
I mean, the only advantage wehave potentially is, I think the
current inflation rate inAustralia is 2.1.
So the RBA has a little bit ofroom, but obviously not a huge
amount of room, and they've gotto be careful.
But we have mentionedstagflation so many times over
the past few months and it isinteresting to see it play out
maybe slower than expected, butit is certainly all.
(11:15):
The dominoes are moving intoplace for this event to occur
and and potentially cause acatastrophe, absolutely.
Speaker 1 (11:22):
And if people are wondering why stagflation is so
bad because we're always toldthat deflation is bad and
inflation you know, stronginflation is bad well, um, the
thing about um, deflation is theuh.
Antidote is obvious.
You cut interest rates tostimulate spending and bring
confidence in.
As we have seen in the lastfour years, controlling
(11:43):
inflation is easy.
You put interest rates up totake the excess economy, excess
confidence, out of the economy.
Speaker 2 (11:49):
Yeah.
Speaker 1 (11:50):
But stagflation, where you've got jobs and
inflation going in differentdirections, meaning that they
need different solutions, butyou've only got one lever to
pull.
That's a horrible scenario thatno central bank or government
wants to find itself in and, asyou said, in America and in
Australia and other developedeconomies, that is the next
(12:10):
phase of this battle.
Speaker 3 (12:12):
Yeah, it's an interesting time ahead.
And before we move on then totalk a little bit about the
rental market, just one questionabout um.
Going back to your uh, yourtake on the sales market at the
moment have you, have you foundbuyer sentiment on the ground
over the last couple of weeks,so since spring has started?
I I often found myself when Iwas talking to buyers in years
(12:32):
gone by around spring there wasalways this kind of renewed
energy that there'd be all thisamazing new stock for them to
look at.
It was a almost like a sense ofboy.
You know they're being buoyedforward and there's a confidence
that comes with that.
Have you found that this yearthere is the same sentiment or
is there still just a little bitof hesitancy on the buyer front
, waiting around a little bit,because I feel like that's the
(12:54):
message out there but I'm notobviously on the ground seeing
it.
Speaker 1 (12:57):
Yeah, look, anyone that's got a stable housing
arrangement is kind of justhappy to let that ride at the
moment.
Yeah, so what we're seeing isthe people that are acting in
the marketplace have a need topurchase, whether they're a new
entrant into the city, whetherthey're sold and they need to
(13:17):
buy, whether they're a tenantwho's been moved out of their
property and decided now's thetime to buy.
We're seeing the people who aredoing the buying is they've got
a definitive need.
There's not a whole heap ofdiscretionary or speculative
buying, if that makes sense.
Now, where that becomes trickyas an estate agent is that
(13:39):
activity levels are very high.
So we've got more people comingthrough inspections, partly
because of the weather, partlybecause people are always
interested in quality realestate coming to market.
So inspection numbers, inquirylevels are high, um, but people
are, you know, on the wholewalking in and out of open
houses without much purpose.
(14:00):
As an estate agent, you needthat discernment and experience
to spot the person who's nothere just to have a little
sticky beak, but the personthat's here to perform.
Speaker 3 (14:09):
Yeah, so yeah, it makes sense.
I mean, there's always a bitmore optimism from people in the
warmer months and I think,particularly as we approach
October, with the government'sbig incentives coming in, there
are going to be a lot morefloaters until they're ready.
Speaker 1 (14:22):
We are seeing, on that point, the first homebuyers
incentives that kick in onOctober 1.
We are seeing more and more, orhearing more and more, people
use that as a reference point.
That'll help my son, that'llhelp my nephew, that'll help us
get into the property market.
That's a big point for us.
Speaker 3 (14:42):
So we do feel Until October 1 hits and prices jump
10%.
To factor that in.
Speaker 1 (14:46):
Well, I think it'll be a little bit more gradual and
I think it will heat up thebottom end of the market.
It won't be like a straight outcash incentive that here's
$10,000 incentive if you buy ahouse, so the market goes up
$30,000.
I don't think what thisincentive is will do that, but
at the end of the day, as we'vepreviously discussed, the
incentive will ultimately causethe market to push up at a
(15:09):
higher rate than the incentiveon offer meaning that the
incentives the governments areputting in place is not really a
first home buyer incentive.
It's a vendor reward becausethey want developers to have the
confidence to build and knowthat there's a ready-made market
at the other end looking to buythe product from them.
Speaker 3 (15:26):
Yeah, look as we move forward.
Peter, you mentioned that oneof the segments in the market
you've seen at the moment istenants looking to buy who may
have been shuffled out of aproperty.
We haven't actually had a goodchat about the rental market in
Sydney for a little while and Iknow there's been some national
vacancy data coming out.
So I thought if you could maybetake our listeners through
what's actually happening in therental space and how does it
(15:46):
compare with you know, the yeargone by, for example?
Speaker 1 (15:50):
Yeah, okay, so these are the August vacancy rates
from SQM Research and they showthat, uh, in august 2024, the
vacancy rate in sydney which,keeping in mind 12 months ago,
kieran, um, it was widelyaccepted that we were in a
rental crisis- is that a fairyeah, fair point.
So this time, 12 months ago, um, the vacancy rate was 1.6
(16:10):
percent.
Um fast forward to august 2025and the numbers have come in at
1.4 percent.
Speaker 3 (16:16):
So that tells you that.
So that's, we were ina crisisbecause we didn't have enough
rentals.
That was one of the the arms,and now we're at a lower vacancy
rate.
Yet it's not even talked aboutat the moment.
Yeah, that's right.
Speaker 1 (16:27):
Yeah, yeah so call it a bit over 10 percent.
What's that?
12 and a half percent, yeah, umless properties on the market
at the moment, um than than thanwhat?
What there was this time 12months ago, at a time where the
population is significantlyhigher.
So what's the adjunct of that?
Well, prices go up.
Prices go up.
Speaker 3 (16:48):
So are you noticing, then, through your agency,
through your team, are younoticing?
You know we often talk aboutnumbers at rental opens and how?
You know, obviously theysomewhat fluctuate around
seasonality and universityschedules and all those kinds of
things in Sydney, but have youguys noticed a kind of
concurrent shift in the numbersof people coming to opens trying
(17:09):
to get a rental?
Speaker 1 (17:10):
Well, I think we discussed this during winter.
What we saw during winter, forexample, um, we were experienced
higher highs and higher lows.
What I mean by that is that, um, properties are continuing to
get record prices for rent butwhen we had a seasonal dip, a
low period being winter, yeah,we, we felt, we felt that
(17:32):
seasonally, but even still itwas still higher than what it
was the previous winter andwinter's gone by.
So higher highs and higher lowsis how you describe the trend
in the rental market at themoment.
We are seeing tenants preparedto pay more rent on
renegotiations.
(17:52):
They readily accept when youput a rental increase to them
that the rent is going up andthey make no mistake, as they
should.
Tenants will go on domain andcross-reference the broader
market with the proposed rentalincrease that the agent's given
them and, on the whole, iftenants can find better value in
the open market than with theirexisting landlord, they will
(18:14):
move.
They will say I'll decline therental increase and I found
something else and I'm and I'mmoving on.
But we're finding we're notencouraging our landlords to
overdo it on rental increasesand create vacancy on themselves
.
We're moving rents in line withthe market and and tenants are
prepared to pay that becausethey know there's no real escape
(18:35):
at the moment.
And this comes to this pointthat we are not.
You know, I won't even saywe're not building enough, we're
not building anything.
Speaker 2 (18:42):
Yeah, yeah.
Speaker 3 (18:43):
I always make the joke about the like seven 3D
printed homes or something thatwas announced.
I haven't seen anything elseother than just words, right?
Speaker 1 (18:50):
Correct, that's exactly right.
So we're not building anything,but you can just feel it by the
week, more and more peoplepouring into the country and the
government seemed to think theyhave a mandate to do this, so
it will continue.
So to give people.
I've given you my personalopinion and read on the market
(19:11):
from the view that we have.
Sqm Research, to use broad data, said that they have
experienced a price increase forthe month of August of 0.5% in
the rental market and on ayear-on-year basis it's up 4.2%.
You said earlier that theinflation rate's down to 2.1%,
which it is, but rents have goneup 4.2%, so that's a clean
(19:32):
doubling of the rental growth.
Speaker 3 (19:35):
As to inflation, yeah , yeah, which is really
interesting because, again, youknow, for people that have been
following the market in Sydneyfor any period of time, we had
massive increases.
For COVID there was some verysubtle correction, but it's
still really just increasingfrom those highs.
We're not, you know, the rentalmarket's not going back.
There's no more supply.
There's still more peoplecoming in.
(19:56):
There's always, you know,there's all these arms that are
competing, yeah, but it'sactually a really perfect segue,
I think, into the last bit Iwanted to talk about in today's
episode, which relates to yourfriends in the New South Wales
Labor Party, particularly thePremier, chris Means, and he's
announced we talked recentlyabout his announcement to
completely transform Woollahraand revitalise the unfinished
(20:19):
train station, build 10,000homes, et cetera, et cetera, and
make it a hub.
He's come out this week and saidthat he wants to.
Well, he has, or he's going to,greenlight 3,000 homes, or
let's just say, residences,along the Parramatta Road
corridor from Camperdown throughto the Tavernous Hill end of
Leichhardt.
Given that, you know outwardly,the government is trying to
(20:42):
address the supply issue,whether they're supplying or not
.
That's not the discussion.
I want to get your take on whatyou think of this proposal.
How do you think it compares toWillara in terms of location
and utility, and do you thinkthat this is the kind of
messaging that is being wellreceived by people you talk to
who are actively looking forproperty?
Speaker 1 (21:03):
Yeah, thanks, kieran.
Look, I'll address that.
I'll just go back to one point,though, about price growth,
because there's some otherinteresting numbers here.
I just wanted to go on if youdidn't mind sure.
So, as we've just said, pricerental, price growth in sydney's
4.2 percent, which is doublethe inflation rate yeah yep.
So just grab, grab hold of someof these numbers.
In brisbane, rental pricegrowth in brisbane for year on
(21:27):
year is 7.3 percent wow.
So what are we talking there?
You know, nearly four times,three and a half times, the
inflation rate, darwin.
The price growth year on yearis 8.9%.
So we're talking four and ahalf times.
Speaker 2 (21:45):
That's quite a bit.
Speaker 1 (21:46):
Yeah yeah, hobart rental price growth is 10.6%.
Speaker 3 (21:52):
Yeah, that's wild.
Speaker 1 (21:52):
Now, rents are a major component of the CPI
basket.
That comes to determine theinflation rate.
So, just to round that out,adelaide's at 2.4%, that's flat.
Canberra's at 1.2% annual pricegrowth, which is below
inflation, and Perth is at fivepoint six percent um, which is,
(22:16):
you know, well above theinflation rate as well.
So if the governments continueto push people um into australia
and into these major citiesbefore they do the developments
that you've just started, thesort of developments that you've
just asked about on ParramattaRoad, inflation will have upward
(22:37):
pressure on it, not justbecause of rents, but in part
because of rents, and then we'regoing to get another
inflationary outbreak.
Yeah, there's no doubt.
Yeah, so in regards toParramatta Road, it's a logical
place.
Parramatta Road has been aneyesore for a long time.
It's not logical place.
Parramatta Road has been aneyesore for a long time.
It's not the first time.
This is, you know, directlyrelated to a lot of the people
(22:57):
that listen to our podcast,because it's here in the inner
west.
The thing about Parramatta Roadcamper down.
When they put apartments up anddown there, it felt like about
20 years ago 2004,.
I think yeah, they developedthose.
Aside from the fact that a lotof them were unfortunately
shoddy builds and I don't saythat at the time, but that's how
(23:18):
it's transpired they're prettydisappointing builds and have
not performed well over those 20years, which is a warning for
anyone that's rushing out to buyone of these apartments.
How will this apartment look in20 years' time?
But it was the right locationto put those because it was
close to the hospital, it wasclose to sydney cbd, buses
running up paramatta road, closeto the universities, etc.
(23:41):
So in terms of localities,paramatta road is a is a good
locality to do that.
Leichhardt the precinct thatthey've drawn on the map here,
that they have scheduled inLeichhardt to do this it's
probably not quite as appealingas the Camperdown section
because it's not as close to theCBD, it's not as well supported
(24:02):
by immediate infrastructure.
Like I don't think too manyuniversity students want to live
in Leichhardt and walk upParramatta Road to university in
Camperdown.
Speaker 3 (24:10):
yeah, no, no and look , they would jump on the bus.
But even you know this is at atime where bus services are
consistently being cut back inSydney.
Speaker 1 (24:17):
At a time that traffic's tripled.
Speaker 3 (24:19):
Exactly, I drive Parramatta Road many mornings
it's horrible.
Speaker 1 (24:22):
We were in Bali at Christmas and we said to the cab
driver hey, mate, we'll fix youup here.
Thanks, we're just going to twokilometres up the road and we
turned around.
The cab driver was driving nextto us, and that's what
Parramatta Road's turning into.
Is that, yeah, you can say I'llget on the bus.
The bus is going nowhere either.
You're better off, it's quickerto walk.
Speaker 3 (24:39):
Oh, it is because you know partially and there's a
whole other bug there.
But you know, drivers don'trespect the bus lanes but it is
at a time where they're cutting.
I think the location makessense, but I also think they've
made some pretty weirdinfrastructure in terms of
public transport decisions inthat corridor.
Considering it's a majorarterial road, it's still very
(24:59):
poorly facilitated, I think, andthere's so many choke points
that just mean that.
You know, I come in fromHomebush Most days I drive down
Parramatta Road and thebottleneck starts well and truly
before you get anywhere nearLycan and it continues all the
way through to Central station.
It's a horrible drive yeah,yeah, totally.
Speaker 1 (25:18):
So if we go to um the quote by darcy burn, this is
out of the herald, is it, kieran?
I think this one's off theguardian actually, but yeah,
similar story so the inner westmayor, darcy burn, said our
inner west community wants tosee more desperately needed
homes delivered and local peopleare telling us that the
Parramatta Road corridor is theright location for higher
(25:39):
residential densities.
By partnering with thegovernment to build more homes
on Parramatta Road, we can givemore of our young people and
essential workers a place tolive in the inner west and make
sure that increased density isdistributed fairly across our
whole community.
Well, the people that I speakto much must be different to the
(26:00):
people that darcy speaks towant to see lower immigration
numbers.
They don't want to seeparamount road turned into a
construction site, building moreapartments for more people
coming into the country andclogging up paramount road
further over the next five years.
So there will come a pointwhere people absolutely have no
tolerance for this plan.
(26:21):
And again, we've said it before, I just don't know where state,
federal, local governmentthought they had a mandate to
flood Sydney with such highimmigration numbers, have the
place a choking point and thensay now we're going to start
building high-density propertyon top of high-density
properties.
Speaker 3 (26:41):
Yeah, it's interesting.
I mean Parramatta Road,particularly around Camperdown,
has been a construction site onand off for the last decade
anyway, given it was so heavilyintegrated into the WestConnex
project.
I mean there's been sectionsthere that literally were under
construction for most of theyears I lived there and then
when we moved even.
But I wonder too I was readingit might have been yesterday or
(27:03):
this morning about the tunnelboring machine that's just cut
through the final bit of tunnelto connect Westmead to the Metro
, which you know outstandingservice, the Metro I have
nothing but praise for.
Westmead is probably, if notgoing to be, sydney's biggest
hospital in the next few years.
I mean, it's a perfect location.
But they finished cuttingthrough the tunnel yesterday,
(27:25):
let's say, and the articlesuggested that the station won't
open until the earliest 2032.
Now it's 2025 right now.
That's seven years away.
I have to wonder, even withthis announcement of Parramatta
Road's great precinct and allthese houses, if it takes them
seven years from cutting atunnel to opening a station.
I wonder what hope in Buckley'sthey have of delivering any
(27:48):
apartments on Parramatta Roadbefore most of the people that
have moved here are forced to goanyway.
Look, my point is they mightdeliver apartments on Parramatta
Road before most of the peoplethat have moved here are forced
to go anyway.
Speaker 1 (27:53):
Oh look, my point is they might deliver apartments on
Parramatta Road, but they'renot going to go to the young
people of the inner west if theykeep the immigration policy at
what it is.
Speaker 3 (28:02):
Well, I said this about Ballara.
I just don't see how anyone canafford them anyway Just because
they're, you know, new andaffordable under the Premier's
kind of mandate.
You know, inverted commas.
It's such a highly popular andlike preferred location to live
that I just don't see why peoplethat are already established
who want to be a little bitcloser, won't snap these up
(28:23):
anyway, like it doesn't.
Anyway.
It doesn't seem like a goodsolution to me, but that's just,
you know me venting.
Speaker 1 (28:29):
Who's your team playing this week in the footy?
We don't talk about that, Peter.
Okay.
Speaker 3 (28:34):
We don't talk about it.
Speaker 1 (28:35):
I take it you don't have a team running around this
weekend?
Speaker 3 (28:38):
Look, the Bunnies aren't going to run around this
week.
They're not going to run around.
I did see, for anyone whofollows, jai Gray got the kind
of, you know, south's Players'Player Award, which I think is
an outstanding recognition.
Yeah, yeah, yeah, look, I don'tknow.
I actually think the finals aregoing to be super interesting.
This year We've had, I reckon,four phases of dominance
(29:00):
throughout the season.
There's been, you know, theBulldogs were really strong.
We had a period where you couldsay the Broncos were on track,
and then the Raiders were ontrack, and then Penrith looked
strong, and now they all justkeep stumbling at little blocks.
I and now they all just keepstumbling at little blocks.
I don't know.
It's going to be a great finish.
Speaker 1 (29:13):
Well, let's just say that karma has bitten the dogs.
Karma for stealing the Tigers'best player.
That was a very dirty play andI couldn't be happy to see the
way that's unfolding.
Speaker 3 (29:22):
I don't know who that is, mate, because it can't be
Lockie Galvin.
He's dreadful.
On that note, let's wrap up fortoday, peter.
Really great discussion,actually Some important topics,
but as always, I reallyappreciate you taking the time.
Thanks, kieran, and thanks toeveryone for listening to
Current Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (29:40):
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 Mr Peter O'Malley
.
Peter Kieran, great to see you,great to see you, buddy.
I just want to jump in todayand kick off.
We'd love to do an episode thatjust focuses on the market in
Sydney.
We've now entered springofficially, so I thought we
would be a really goodopportunity just to talk about
(00:50):
how, last time we spoke, we gavea sense of what was happening
in the market, but now we've hada little bit of time to get a
feel for the buyers, get a feelfor those vendors coming to
market.
So, if you can, why don't youtake our listeners through what
the Sydney market's looking likeat the moment and do you feel
there's been a dynamic shift atall in the last few weeks or so
since spring really started inearnest?
Speaker 1 (01:11):
Thanks, Kieran, look, it's fair to say that the
Sydney market is dealing with adeluge of stock, as happens in
spring, yep.
So the auction clearance rate,as our listeners would know from
previous weeks, was sort of inthe mid-50s, heading towards 60,
suggestive of a really strongenvironment for vendors.
(01:33):
The auction clearance rate lastweek, on SQM researchers'
numbers, was 51%.
So we have seen a pullbackthere and that has pulled back
on the back of an increase instock levels with 1,115
properties up for auction, whichis a bit of a sharp jump on the
norm, yep.
So there's no doubt that themarket is struggling to absorb
(01:55):
extra stock levels.
At the moment it's still above50%.
So that's a good story in andof its own right.
So that's a good story in andof its own right.
I think the next mostinteresting stat is that of the
successful auction campaigns,310 sold prior, meaning that the
owners were more than happy tograb the money and run, and 263
sold under the hammer.
(02:16):
So there's a very, very clearbreakout where most weeks that's
at a 50-50, those two numbers,as you know, it breaks 50-50.
But there's a very clearpreference last week of the
successful sales to grab themoney before auction day.
Speaker 3 (02:32):
Do you think that some of that reduction in the
clearance rate is related tojust the idea that people list
in spring as a reflex, almost,as opposed to necessarily having
those more desirable propertiesthat may benefit from a sale
period?
Or you know, I just get thesense that the spring market and
maybe the post-Australia Daymarket, people just list because
that's the time to do it, sothere's possibly a deluge of
(02:54):
less or lesser desirableproperty coming to market.
Would that be reasonable?
Speaker 1 (02:59):
Look.
No, I wouldn't say so.
I wouldn't say it comes back tothe quality of the property.
The listing numbers are up.
Therefore the clearance rate isis is down by a few percentage
points happens every year inspring.
We, we spend all year saying topeople don't, don't fall into
the trap of thinking, you know,spring is this boom time where
it'll go crazy.
(03:19):
Yes, we know your garden lookbetter, we know your house
presents better in spring, butthe problem is, so does everyone
else's, and if everyone comesto the market at the same time,
suddenly you've got the sameamount of buyers dealing with a
much broader base of supply.
And that's what we're seeing atthe moment.
Speaker 3 (03:35):
So if the market is operating in a healthy way,
would you expect that thatclearance rate will just creep
up over the coming weeks as themarket adjusts to the extra
stock on hand.
Speaker 1 (03:45):
Well, look, when we last caught up, we did say that
we felt that stock levels werebeing held back artificially by
the weather pattern, in Sydneyspecifically, and that the true
spring market will startprobably a month later.
This year it's normally in full, you know raw, by mid-September
, but it's looking like it'll bepost-October long weekend now
(04:06):
when you do see the big surge inlisting numbers and that's
driven by the fact that peoplewere getting their properties
ready for market through July,august and couldn't catch a
break with the weather.
So you know, we need to counterthat with the fact that there
was, you know, a lot of highlypublicised job losses, mass job
losses in the banking sectorlast week.
Um, that would have rubbed on,but you know, by a sentiment a
(04:29):
bit.
Um, increasingly we're hearingum through channels that
companies are looking tooutsource jobs to ai and
offshoring and um, that's uh,you know we've got some big
employment data coming through,whether it shows up in the next
you know employment reading orthe one after, but that is
something that we're also seeingout.
There is that, um, lots of um,you know people are, you know,
(04:53):
being spoken to about redundancy.
So, both in my social networkand professional network.
Um, there there is uh, you knowthere's not the buoyant jobs
environment that it has been.
Speaker 3 (05:05):
It's interesting.
You mentioned jobs and we won'tspend any real time on it today
, but obviously the job figuresare due to release tomorrow and
they're a major factor of whatmay dictate or put pressure on
the RBA to make their next ratesdecision, which is at the end
of this month.
Just based on what you've said,and based on your observations,
conversations and your kind ofread, what do you think the
(05:28):
figures are likely to look like?
Do you think that we're goingto see an increase in
unemployment?
Do you think we're going to seeit remain stable or drop?
Do you know?
You mentioned the the banksector's cutting a lot.
Could that potentially, youknow, pave the way for other
major banks or majorcorporations to do the same
thing?
I mean, are we entering a bitof a cycle now where the
economic environment getsslightly tougher again, whilst
(05:50):
the economy itself is actuallyperforming pretty well?
Speaker 1 (05:53):
Yeah, look, I don't pretend to know what the next
employment number is, because Idon't know how it's calculated,
whether these job losses thatwe've been hearing about in the
last two weeks are captured inthis reporting period or it's
the one after.
I do suspect that you might seesome upward pressure on the
unemployment rate in the nextsix to 12 months, because
(06:15):
there's no doubt thatcorporations I won't just blame
the banks, even though that'sfun and easy to do- Please don't
but there's no doubt thatcorporations um who are
struggling to grow their topline revenue, um to to grow
their profits, are seeing thatthey have to cut costs yeah
and and the easiest way for acorporation to cut costs at the
(06:36):
moment is to outsource,outsource offshore jobs,
outsource to ai or send the joboffshore, and that's what's
happening and that's why we'refeeling it in the employment
market here.
So you know just a couple of um.
A couple of weeks ago, I askedone of the property managers in
the company how's your day going?
She said I'm not real well.
And um, I said why?
(06:57):
What's going on?
And?
And she just said straight outlook, I just feels like everyone
I ring at the moment's beingmade redundant.
And then I've got to put awhole plan of action in place
around that because the abilityto complete their lease is not
quite there.
So we've got to go back to thelandlords and renegotiate terms
and an early exit and penaltyfree, and they've lost their job
.
Would you be gracious enough tolet them find a new tenant
(07:20):
without stinging them a penaltyand all of that?
So hopefully this is just ashort-term blip and some of
these corporations are justcleaning up.
Um, you know some um, you knowrough edges, if you like, in in
in the end of the year.
Uh, close, um, but we areseeing it more and more, there's
no doubt.
So I don't know if that plays arole in the auction clearance
(07:43):
rate.
Pulling back is the primarypoint, kieran, but um there, but
there is some pressure outthere.
Speaker 3 (07:49):
Oh look, definitely I wasn't actually going to talk
about this, but I read anarticle and you haven't.
So I'm not going to ask youspecifics or to my knowledge you
haven't but I only readsomething earlier that in
Toowoomba, for example, there'ssomething like 75% of households
are now officially undermortgage stress and most of
those are now missing mortgagerepayments.
Now, obviously that's onemicrocosm across the country,
(08:12):
but in a period where theeconomy feels like rates are
coming down, psychologically itfeels like we're probably on the
improve we do have these placeswhere people are being made
redundant, where there arecertain sectors and industries
that job security may not beguaranteed and we could very
well see some mortgage stresscreeping back.
You know significant mortgagestress keeping creeping back
(08:34):
into the property market, as yousay, at a time where stocks
coming on and we've got allthese promises of government
incentive.
You know there's so much goingon that sounds positive, but in
fact that's really notnecessarily what's happening on
the ground.
Speaker 1 (08:45):
Yeah.
So look, I guess what you'retouching on there and I know
before we started recordingtoday, the big number you're
looking to see drop is theAustralian unemployment rate,
which is great, yeah.
But another big number thatwill drop by the time the
audience is listening to thispodcast is what does the US do
overnight with their interestrates?
And it is actually related towhat you've just explained there
in Toowoomba, because inAmerica what they've got at the
(09:07):
moment is an inflation ratethat's going up.
That suggests you shouldn't cutrates, but it's almost
universally agreed that the USwill cut their interest rates.
Speaker 3 (09:15):
The Federal Reserve will cut overnight and deliver
the market a 0.25% rate cut andI think for reference they're
still at 4.5, I think cash ratethey're quite high cut and I
think, for reference they'rethey're still at 4.5, I think,
cash rate.
Speaker 1 (09:26):
They're quite high.
Um, I'm pretty sure I'm not.
I'm not, I'm not.
I don't pretend to know wheretheir cash rates at, but what's
happened is that we've oftenspoken about and we've asked
people that are smarter than youand I on this what happens when
a central bank has to choosebetween jobs or inflation.
Yeah, because they say, our jobis a dual mandate between the
Federal Reserve and the RBA.
(09:47):
For that matter, we have a dualmandate it's to manage price
stability and employment.
But what about when they're atodds, which is where we're
headed to now, which is You'retalking about the stagflation.
Stagflation.
Well done, exactly right.
We're heading towards thisstagflation environment where
unemployment is creeping up, butso is inflation.
So if you cut rates to get thejobs going, you send inflation
(10:11):
higher, and this is why you'vegot gold.
That's running.
You know, we, we spoke, youknow, two weeks ago, about the
gold price and how strong it was.
Well, I can tell you it's onlygone one way since it's just
gone straight up.
Yeah, um, it's because the usfederal reserve is threatening
to be pressured by trump and cutrates at a time that
inflation's going up.
Now that will fuel inflationfurther and that inflation will
(10:35):
find its way to australia.
And then the rba will have thesame dilemma that the us federal
reserve have got now, which isdo we cut rates to keep people
employed but fuel inflationagain, or do we keep rates on
hold, fighting inflation butdriving our unemployment rate up
?
Speaker 3 (10:54):
Yeah, it's a tough decision, right?
I mean, the only advantage wehave potentially is, I think the
current inflation rate inAustralia is 2.1.
So the RBA has a little bit ofroom, but obviously not a huge
amount of room, and they've gotto be careful.
But we have mentionedstagflation so many times over
the past few months and it isinteresting to see it play out
maybe slower than expected, butit is certainly all.
(11:15):
The dominoes are moving intoplace for this event to occur
and and potentially cause acatastrophe, absolutely.
Speaker 1 (11:22):
And if people are wondering why stagflation is so
bad because we're always toldthat deflation is bad and
inflation you know, stronginflation is bad well, um, the
thing about um, deflation is theuh.
Antidote is obvious.
You cut interest rates tostimulate spending and bring
confidence in.
As we have seen in the lastfour years, controlling
(11:43):
inflation is easy.
You put interest rates up totake the excess economy, excess
confidence, out of the economy.
Speaker 2 (11:49):
Yeah.
Speaker 1 (11:50):
But stagflation, where you've got jobs and
inflation going in differentdirections, meaning that they
need different solutions, butyou've only got one lever to
pull.
That's a horrible scenario thatno central bank or government
wants to find itself in and, asyou said, in America and in
Australia and other developedeconomies, that is the next
(12:10):
phase of this battle.
Speaker 3 (12:12):
Yeah, it's an interesting time ahead.
And before we move on then totalk a little bit about the
rental market, just one questionabout um.
Going back to your uh, yourtake on the sales market at the
moment have you, have you foundbuyer sentiment on the ground
over the last couple of weeks,so since spring has started?
I I often found myself when Iwas talking to buyers in years
(12:32):
gone by around spring there wasalways this kind of renewed
energy that there'd be all thisamazing new stock for them to
look at.
It was a almost like a sense ofboy.
You know they're being buoyedforward and there's a confidence
that comes with that.
Have you found that this yearthere is the same sentiment or
is there still just a little bitof hesitancy on the buyer front
, waiting around a little bit,because I feel like that's the
(12:54):
message out there but I'm notobviously on the ground seeing
it.
Speaker 1 (12:57):
Yeah, look, anyone that's got a stable housing
arrangement is kind of justhappy to let that ride at the
moment.
Yeah, so what we're seeing isthe people that are acting in
the marketplace have a need topurchase, whether they're a new
entrant into the city, whetherthey're sold and they need to
(13:17):
buy, whether they're a tenantwho's been moved out of their
property and decided now's thetime to buy.
We're seeing the people who aredoing the buying is they've got
a definitive need.
There's not a whole heap ofdiscretionary or speculative
buying, if that makes sense.
Now, where that becomes trickyas an estate agent is that
(13:39):
activity levels are very high.
So we've got more people comingthrough inspections, partly
because of the weather, partlybecause people are always
interested in quality realestate coming to market.
So inspection numbers, inquirylevels are high, um, but people
are, you know, on the wholewalking in and out of open
houses without much purpose.
(14:00):
As an estate agent, you needthat discernment and experience
to spot the person who's nothere just to have a little
sticky beak, but the personthat's here to perform.
Speaker 3 (14:09):
Yeah, so yeah, it makes sense.
I mean, there's always a bitmore optimism from people in the
warmer months and I think,particularly as we approach
October, with the government'sbig incentives coming in, there
are going to be a lot morefloaters until they're ready.
Speaker 1 (14:22):
We are seeing, on that point, the first homebuyers
incentives that kick in onOctober 1.
We are seeing more and more, orhearing more and more, people
use that as a reference point.
That'll help my son, that'llhelp my nephew, that'll help us
get into the property market.
That's a big point for us.
Speaker 3 (14:42):
So we do feel Until October 1 hits and prices jump
10%.
To factor that in.
Speaker 1 (14:46):
Well, I think it'll be a little bit more gradual and
I think it will heat up thebottom end of the market.
It won't be like a straight outcash incentive that here's
$10,000 incentive if you buy ahouse, so the market goes up
$30,000.
I don't think what thisincentive is will do that, but
at the end of the day, as we'vepreviously discussed, the
incentive will ultimately causethe market to push up at a
(15:09):
higher rate than the incentiveon offer meaning that the
incentives the governments areputting in place is not really a
first home buyer incentive.
It's a vendor reward becausethey want developers to have the
confidence to build and knowthat there's a ready-made market
at the other end looking to buythe product from them.
Speaker 3 (15:26):
Yeah, look as we move forward.
Peter, you mentioned that oneof the segments in the market
you've seen at the moment istenants looking to buy who may
have been shuffled out of aproperty.
We haven't actually had a goodchat about the rental market in
Sydney for a little while and Iknow there's been some national
vacancy data coming out.
So I thought if you could maybetake our listeners through
what's actually happening in therental space and how does it
(15:46):
compare with you know, the yeargone by, for example?
Speaker 1 (15:50):
Yeah, okay, so these are the August vacancy rates
from SQM Research and they showthat, uh, in august 2024, the
vacancy rate in sydney which,keeping in mind 12 months ago,
kieran, um, it was widelyaccepted that we were in a
rental crisis- is that a fairyeah, fair point.
So this time, 12 months ago, um, the vacancy rate was 1.6
(16:10):
percent.
Um fast forward to august 2025and the numbers have come in at
1.4 percent.
Speaker 3 (16:16):
So that tells you that.
So that's, we were ina crisisbecause we didn't have enough
rentals.
That was one of the the arms,and now we're at a lower vacancy
rate.
Yet it's not even talked aboutat the moment.
Yeah, that's right.
Speaker 1 (16:27):
Yeah, yeah so call it a bit over 10 percent.
What's that?
12 and a half percent, yeah, umless properties on the market
at the moment, um than than thanwhat?
What there was this time 12months ago, at a time where the
population is significantlyhigher.
So what's the adjunct of that?
Well, prices go up.
Prices go up.
Speaker 3 (16:48):
So are you noticing, then, through your agency,
through your team, are younoticing?
You know we often talk aboutnumbers at rental opens and how?
You know, obviously theysomewhat fluctuate around
seasonality and universityschedules and all those kinds of
things in Sydney, but have youguys noticed a kind of
concurrent shift in the numbersof people coming to opens trying
(17:09):
to get a rental?
Speaker 1 (17:10):
Well, I think we discussed this during winter.
What we saw during winter, forexample, um, we were experienced
higher highs and higher lows.
What I mean by that is that, um, properties are continuing to
get record prices for rent butwhen we had a seasonal dip, a
low period being winter, yeah,we, we felt, we felt that
(17:32):
seasonally, but even still itwas still higher than what it
was the previous winter andwinter's gone by.
So higher highs and higher lowsis how you describe the trend
in the rental market at themoment.
We are seeing tenants preparedto pay more rent on
renegotiations.
(17:52):
They readily accept when youput a rental increase to them
that the rent is going up andthey make no mistake, as they
should.
Tenants will go on domain andcross-reference the broader
market with the proposed rentalincrease that the agent's given
them and, on the whole, iftenants can find better value in
the open market than with theirexisting landlord, they will
(18:14):
move.
They will say I'll decline therental increase and I found
something else and I'm and I'mmoving on.
But we're finding we're notencouraging our landlords to
overdo it on rental increasesand create vacancy on themselves
.
We're moving rents in line withthe market and and tenants are
prepared to pay that becausethey know there's no real escape
(18:35):
at the moment.
And this comes to this pointthat we are not.
You know, I won't even saywe're not building enough, we're
not building anything.
Speaker 2 (18:42):
Yeah, yeah.
Speaker 3 (18:43):
I always make the joke about the like seven 3D
printed homes or something thatwas announced.
I haven't seen anything elseother than just words, right?
Speaker 1 (18:50):
Correct, that's exactly right.
So we're not building anything,but you can just feel it by the
week, more and more peoplepouring into the country and the
government seemed to think theyhave a mandate to do this, so
it will continue.
So to give people.
I've given you my personalopinion and read on the market
(19:11):
from the view that we have.
Sqm Research, to use broad data, said that they have
experienced a price increase forthe month of August of 0.5% in
the rental market and on ayear-on-year basis it's up 4.2%.
You said earlier that theinflation rate's down to 2.1%,
which it is, but rents have goneup 4.2%, so that's a clean
(19:32):
doubling of the rental growth.
Speaker 3 (19:35):
As to inflation, yeah , yeah, which is really
interesting because, again, youknow, for people that have been
following the market in Sydneyfor any period of time, we had
massive increases.
For COVID there was some verysubtle correction, but it's
still really just increasingfrom those highs.
We're not, you know, the rentalmarket's not going back.
There's no more supply.
There's still more peoplecoming in.
(19:56):
There's always, you know,there's all these arms that are
competing, yeah, but it'sactually a really perfect segue,
I think, into the last bit Iwanted to talk about in today's
episode, which relates to yourfriends in the New South Wales
Labor Party, particularly thePremier, chris Means, and he's
announced we talked recentlyabout his announcement to
completely transform Woollahraand revitalise the unfinished
(20:19):
train station, build 10,000homes, et cetera, et cetera, and
make it a hub.
He's come out this week and saidthat he wants to.
Well, he has, or he's going to,greenlight 3,000 homes, or
let's just say, residences,along the Parramatta Road
corridor from Camperdown throughto the Tavernous Hill end of
Leichhardt.
Given that, you know outwardly,the government is trying to
(20:42):
address the supply issue,whether they're supplying or not
.
That's not the discussion.
I want to get your take on whatyou think of this proposal.
How do you think it compares toWillara in terms of location
and utility, and do you thinkthat this is the kind of
messaging that is being wellreceived by people you talk to
who are actively looking forproperty?
Speaker 1 (21:03):
Yeah, thanks, kieran.
Look, I'll address that.
I'll just go back to one point,though, about price growth,
because there's some otherinteresting numbers here.
I just wanted to go on if youdidn't mind sure.
So, as we've just said, pricerental, price growth in sydney's
4.2 percent, which is doublethe inflation rate yeah yep.
So just grab, grab hold of someof these numbers.
In brisbane, rental pricegrowth in brisbane for year on
(21:27):
year is 7.3 percent wow.
So what are we talking there?
You know, nearly four times,three and a half times, the
inflation rate, darwin.
The price growth year on yearis 8.9%.
So we're talking four and ahalf times.
Speaker 2 (21:45):
That's quite a bit.
Speaker 1 (21:46):
Yeah yeah, hobart rental price growth is 10.6%.
Speaker 3 (21:52):
Yeah, that's wild.
Speaker 1 (21:52):
Now, rents are a major component of the CPI
basket.
That comes to determine theinflation rate.
So, just to round that out,adelaide's at 2.4%, that's flat.
Canberra's at 1.2% annual pricegrowth, which is below
inflation, and Perth is at fivepoint six percent um, which is,
(22:16):
you know, well above theinflation rate as well.
So if the governments continueto push people um into australia
and into these major citiesbefore they do the developments
that you've just started, thesort of developments that you've
just asked about on ParramattaRoad, inflation will have upward
(22:37):
pressure on it, not justbecause of rents, but in part
because of rents, and then we'regoing to get another
inflationary outbreak.
Yeah, there's no doubt.
Yeah, so in regards toParramatta Road, it's a logical
place.
Parramatta Road has been aneyesore for a long time.
It's not logical place.
Parramatta Road has been aneyesore for a long time.
It's not the first time.
This is, you know, directlyrelated to a lot of the people
(22:57):
that listen to our podcast,because it's here in the inner
west.
The thing about Parramatta Roadcamper down.
When they put apartments up anddown there, it felt like about
20 years ago 2004,.
I think yeah, they developedthose.
Aside from the fact that a lotof them were unfortunately
shoddy builds and I don't saythat at the time, but that's how
(23:18):
it's transpired they're prettydisappointing builds and have
not performed well over those 20years, which is a warning for
anyone that's rushing out to buyone of these apartments.
How will this apartment look in20 years' time?
But it was the right locationto put those because it was
close to the hospital, it wasclose to sydney cbd, buses
running up paramatta road, closeto the universities, etc.
(23:41):
So in terms of localities,paramatta road is a is a good
locality to do that.
Leichhardt the precinct thatthey've drawn on the map here,
that they have scheduled inLeichhardt to do this it's
probably not quite as appealingas the Camperdown section
because it's not as close to theCBD, it's not as well supported
(24:02):
by immediate infrastructure.
Like I don't think too manyuniversity students want to live
in Leichhardt and walk upParramatta Road to university in
Camperdown.
Speaker 3 (24:10):
yeah, no, no and look , they would jump on the bus.
But even you know this is at atime where bus services are
consistently being cut back inSydney.
Speaker 1 (24:17):
At a time that traffic's tripled.
Speaker 3 (24:19):
Exactly, I drive Parramatta Road many mornings
it's horrible.
Speaker 1 (24:22):
We were in Bali at Christmas and we said to the cab
driver hey, mate, we'll fix youup here.
Thanks, we're just going to twokilometres up the road and we
turned around.
The cab driver was driving nextto us, and that's what
Parramatta Road's turning into.
Is that, yeah, you can say I'llget on the bus.
The bus is going nowhere either.
You're better off, it's quickerto walk.
Speaker 3 (24:39):
Oh, it is because you know partially and there's a
whole other bug there.
But you know, drivers don'trespect the bus lanes but it is
at a time where they're cutting.
I think the location makessense, but I also think they've
made some pretty weirdinfrastructure in terms of
public transport decisions inthat corridor.
Considering it's a majorarterial road, it's still very
(24:59):
poorly facilitated, I think, andthere's so many choke points
that just mean that.
You know, I come in fromHomebush Most days I drive down
Parramatta Road and thebottleneck starts well and truly
before you get anywhere nearLycan and it continues all the
way through to Central station.
It's a horrible drive yeah,yeah, totally.
Speaker 1 (25:18):
So if we go to um the quote by darcy burn, this is
out of the herald, is it, kieran?
I think this one's off theguardian actually, but yeah,
similar story so the inner westmayor, darcy burn, said our
inner west community wants tosee more desperately needed
homes delivered and local peopleare telling us that the
Parramatta Road corridor is theright location for higher
(25:39):
residential densities.
By partnering with thegovernment to build more homes
on Parramatta Road, we can givemore of our young people and
essential workers a place tolive in the inner west and make
sure that increased density isdistributed fairly across our
whole community.
Well, the people that I speakto much must be different to the
(26:00):
people that darcy speaks towant to see lower immigration
numbers.
They don't want to seeparamount road turned into a
construction site, building moreapartments for more people
coming into the country andclogging up paramount road
further over the next five years.
So there will come a pointwhere people absolutely have no
tolerance for this plan.
(26:21):
And again, we've said it before, I just don't know where state,
federal, local governmentthought they had a mandate to
flood Sydney with such highimmigration numbers, have the
place a choking point and thensay now we're going to start
building high-density propertyon top of high-density
properties.
Speaker 3 (26:41):
Yeah, it's interesting.
I mean Parramatta Road,particularly around Camperdown,
has been a construction site onand off for the last decade
anyway, given it was so heavilyintegrated into the WestConnex
project.
I mean there's been sectionsthere that literally were under
construction for most of theyears I lived there and then
when we moved even.
But I wonder too I was readingit might have been yesterday or
(27:03):
this morning about the tunnelboring machine that's just cut
through the final bit of tunnelto connect Westmead to the Metro
, which you know outstandingservice, the Metro I have
nothing but praise for.
Westmead is probably, if notgoing to be, sydney's biggest
hospital in the next few years.
I mean, it's a perfect location.
But they finished cuttingthrough the tunnel yesterday,
(27:25):
let's say, and the articlesuggested that the station won't
open until the earliest 2032.
Now it's 2025 right now.
That's seven years away.
I have to wonder, even withthis announcement of Parramatta
Road's great precinct and allthese houses, if it takes them
seven years from cutting atunnel to opening a station.
I wonder what hope in Buckley'sthey have of delivering any
(27:48):
apartments on Parramatta Roadbefore most of the people that
have moved here are forced to goanyway.
Look, my point is they mightdeliver apartments on Parramatta
Road before most of the peoplethat have moved here are forced
to go anyway.
Speaker 1 (27:53):
Oh look, my point is they might deliver apartments on
Parramatta Road, but they'renot going to go to the young
people of the inner west if theykeep the immigration policy at
what it is.
Speaker 3 (28:02):
Well, I said this about Ballara.
I just don't see how anyone canafford them anyway Just because
they're, you know, new andaffordable under the Premier's
kind of mandate.
You know, inverted commas.
It's such a highly popular andlike preferred location to live
that I just don't see why peoplethat are already established
who want to be a little bitcloser, won't snap these up
(28:23):
anyway, like it doesn't.
Anyway.
It doesn't seem like a goodsolution to me, but that's just,
you know me venting.
Speaker 1 (28:29):
Who's your team playing this week in the footy?
We don't talk about that, Peter.
Okay.
Speaker 3 (28:34):
We don't talk about it.
Speaker 1 (28:35):
I take it you don't have a team running around this
weekend?
Speaker 3 (28:38):
Look, the Bunnies aren't going to run around this
week.
They're not going to run around.
I did see, for anyone whofollows, jai Gray got the kind
of, you know, south's Players'Player Award, which I think is
an outstanding recognition.
Yeah, yeah, yeah, look, I don'tknow.
I actually think the finals aregoing to be super interesting.
This year We've had, I reckon,four phases of dominance
(29:00):
throughout the season.
There's been, you know, theBulldogs were really strong.
We had a period where you couldsay the Broncos were on track,
and then the Raiders were ontrack, and then Penrith looked
strong, and now they all justkeep stumbling at little blocks.
I and now they all just keepstumbling at little blocks.
I don't know.
It's going to be a great finish.
Speaker 1 (29:13):
Well, let's just say that karma has bitten the dogs.
Karma for stealing the Tigers'best player.
That was a very dirty play andI couldn't be happy to see the
way that's unfolding.
Speaker 3 (29:22):
I don't know who that is, mate, because it can't be
Lockie Galvin.
He's dreadful.
On that note, let's wrap up fortoday, peter.
Really great discussion,actually Some important topics,
but as always, I reallyappreciate you taking the time.
Thanks, kieran, and thanks toeveryone for listening to
Current Market Insights.
We look forward to speakingwith you next time.
Speaker 2 (29:40):
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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