October 1, 2025 • 30 mins
Hosts Ciaran O'Brien and Peter O'Malley unpack why a rate hold can still feel like a squeeze for households, even as Sydney’s property market shows firmer prices, mixed clearance rates, and ultra-tight rental conditions. With rezoning plans, first home buyer support, and global risks shaping the outlook, this episode explores the forces driving today’s market.
We also discuss:
- RBA holds rates as the board signals caution on future cuts
- Gold surge and US tariffs raising the risk of imported inflation
- Housing strength playing a central role in monetary policy decisions
- Sydney prices edging up as stale stock starts to move
- Auction volumes rising, with clearance rates holding in the low 50s
- Rental conditions tightening further as arrivals lift and tenants negotiate early
- Investors staying cautious amid soft yields and tax settings
- First home buyer support helping at the entry-level but not B-grade units
- Lending limits on sub-40sqm apartments creating barriers for buyers
- Inner West rezoning approval for 30,000+ dwellings over 15 years
- Delivery risks around construction quality, schools, and infrastructure
- Practical plays for buyers, sellers, tenants, and investors in today’s market
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_02 (00:30):
Hello and welcome to another edition of Current
Market Insights.
My name is Kieran O'Brien andwith me is Mr.
Peter O'Malley.
Peter, hello.
Kieran, great to see you.
Great to see you for anotherweek, Peter.
I want to jump in today'sepisode.
We're going to talk a lot aboutsales and rentals and what's
going on in the Sydney market.
But I thought if it's okay withyou, we might start the episode
today just discussing uh thelatest decision from the RBA
(00:53):
around their monetary policy,given it's probably the most
important thing that's happenedin the last week since we last
spoke.
SPEAKER_01 (00:59):
Yeah, thanks, Kieran.
Look, in a surprise to no one,um they've kept rates on hold.
The decision was unanimous bythe board.
Uh probably the thing that uh uhyou know caused the most
discussion coming out of themeeting was that there was a
sense that we may have seen thelast of rate cuts for the time
being.
There wasn't anything in here tosuggest the RBA are ready to
(01:21):
pull the trigger again.
And they're acutely aware thatum uh the employment market is
still tight and that householdconfidence um has returned on
the back of three rate cuts thisyear.
And uh therefore um there couldbe in the future some um upward
pressure on inflation, and uhthat's uh you know aided and
(01:43):
abetted by what's going on inAmerica with the tariffs and
Trump's policies areinflationary and obviously
inflation's rising in America aswe've discussed previously, and
they've cut interest rates whileinflation is going up.
Um the price of gold, um, whichis a barometer for it was about
5200, I think, when I saw ityesterday.
Uh Australia uh well no, it's alot higher than that.
(02:06):
It's fifty done nudging fifty,nine hundred Australian and um
nudging thirty eight hundred andfifty dollars, three thirty
eight hundred and sixty-threedollars American.
SPEAKER_02 (02:15):
Yeah, wow.
SPEAKER_01 (02:16):
So to give people an idea, if we want to talk gold,
in the last thirty days, theprice of gold in Australian
dollars has moved from fiftyfour hundred to fifty eight
hundred and forty-four.
And in the last thirty days inUS dollars, uh it's moved from
just over thirty-five hundred tothree thousand eight hundred and
(02:39):
sixty-two dollars as we speak.
SPEAKER_02 (02:41):
Yeah, 10%.
That's a crazy rise.
I um uh as you say, no surprisefrom the RBA that they did
decide to hold rates, and theydo mention their policy that you
know unemployment's steady, butit's still kind of in a bit of a
precarious situation.
Uh, one thing that they domention in this statement, which
I thought was interesting andobviously ties into what we talk
(03:03):
about a lot, is they mentionthat the housing market is a key
factor in their decision makinghere.
You know, they say the housingmarket is strengthening, uh,
it's a s they think it's a signthat interest rate cuts are
having an effect, whether it'sthe desired effect or not, uh,
remains to be seen.
But they, you know, to me, theymake the point that housing is
too strong, credit's available,and the concern that if
(03:24):
anything, it's just going to runfrom here.
Uh, and they to me it seems likethey're leaving the door open to
go up or down, depending on youknow, really what happens on the
city.
SPEAKER_01 (03:32):
I'm glad you raised that point because I go to an
economist that's a bit of acontrarian when it comes to
these matters, uh, Judo BanksWarren Hogan.
And he wrote on social mediaafter the uh rate decision he
said the RBA is tiptoeing awayfrom rate cuts.
The next move is now evenlybalanced between a hike and a
(03:54):
cut.
Time frames are important as therate cut window likely closes
around mid-2026.
The hiking window opens aroundMay 2026.
SPEAKER_02 (04:07):
Yeah.
So he's suggesting that the samething.
It's a bit of a line ball atthis stage, but we have a so
what I mean.
He's saying it's a line ball asto whether the next move is up
or down.
But what's his rationale for thetiming?
Do you think?
Why, you know, why is hesuggesting that if we don't do
anything before May, as in cutbefore May, that it's an
inevitability we got?
SPEAKER_01 (04:27):
I think markets um have priced in that inflation in
in 12 months will be moving upagain.
Um uh could be picking up againbased on what's happening in
America.
SPEAKER_02 (04:37):
Yeah, okay.
SPEAKER_01 (04:38):
So if you look if you look at the yields, you
know, the yields in America,they are suggesting that the um,
yes, they the uh Federal Reservecan cut at the moment, but
inflation and markets will forcethem to increase by even more
later.
Warren, they can, but shouldthey?
SPEAKER_02 (04:52):
I mean, that's the the million dollar question,
right?
SPEAKER_01 (04:54):
Uh well it'll take someone big to to stand up to
Trump if that's what's going tohappen.
But um, in fairness to WarrenHogan, he was someone when
everyone was calling for ratecuts, saying be careful about
what you wish for, because arate cut can today can mean a
rate hike tomorrow, which willultimately help nobody.
SPEAKER_02 (05:13):
Yeah.
unknown (05:14):
Yeah.
SPEAKER_02 (05:14):
And as we said for oh, however long now, 12 months,
maybe longer, on the podcasthere, um, there was a whole
period, and there still is formany people, where a rate hold
is akin to a rate rise becauseof the excess stress.
So his argument holds really inline with what we had said that
uh a little bit prolong, youknow, a bit more prolonged pain
at a current level is going tobe better in the long run than a
(05:36):
bit of short-term gain and theninevitably a hike again, which I
I suspect will will come as asurprise to a lot of people if
it does happen.
You know, that we've we've kindof been through this period of
tough economic conditions.
Now we've had relief, and Ithink there'll be a lot of
people that think, oh, well, wecan't, surely we're not going to
go back up now.
SPEAKER_01 (05:54):
Look, there's a couple of factors to this.
The first is that inflation canbe imported into Australia no
matter what Australia's doing.
SPEAKER_02 (06:01):
Yep.
SPEAKER_01 (06:02):
So the RBA are not in complete control of the
inflation number here inAustralia, nor is the
government.
Um, the other one, which I thinkis coming through here, is that
if we cut rates to give cost ofliving relief and then it pops
out as higher property prices,as we've always said, people
will refine against their newnew refinance against their
(06:24):
newfound equity in their houseand continue expanding and
living in the economy as theywere, meaning the rate battle's
not being won, but the propertybubble is just expanding.
Yeah.
And the property bubble is goingto continue to expand under
certain conditions because notenough supply.
Not enough supply.
And people coming in through thefront door.
SPEAKER_02 (06:44):
Yeah.
I uh I've got I've got your cardnext to me that outlines your
two key points.
Look, uh that's it's actually apretty good segue, I think,
Pete.
Um one of the other things Iwant to talk about, uh actually,
before we do that, do you thinkthat most people had expected
the RBA would hold?
Do you think that there's beenany shift in sentiment as a
(07:05):
result of the announcement uh onthe 30th?
And uh, you know, anyone thatyou've spoken to in the market,
are they expressingdisappointment?
Are they expressing kind ofambivalence?
Is there any uh sense out therethat people actually, you know,
really pay that much attentionto this particular rates
announcement?
SPEAKER_01 (07:21):
Uh, I think the statement was bigger than the
decision on this particularmonth.
No one really expected the RBAto cut, um, or hike for that
matter, uh, on September 30.
I've seen some seasonedeconomists, people who know a
lot more about money marketsthan than you and I do, and and
they are slowly but surelysaying, forget two rate cuts.
You'll be lucky if you see onemore.
(07:43):
Yeah.
Uh that was Mark Burrus's viewfor what it's worth.
Um he he he sort of picked upthe same tone in in the RBA
statement that most of us did,that they're you know, based on
the current trajectory, they'reat pretty much close to the end
of uh of their rate cuttingcycle, um, barring um an
international event.
Now the um RBA in theirstatement did use those lines
(08:07):
that I have been talking aboutafter every RBA meeting, which
is the board stands wellpositioned to respond decisively
to international developments ifthey do occur.
SPEAKER_02 (08:19):
And yeah, and um well, as you know, they say here
they'll be attentive to the dataand the evolving assessment of
the outlook and risks to guideits decisions.
In doing so, it will pay closeattention to developments in the
global economy and financialmarkets, trends in domestic
demand and the outlook forinflation and the labour market,
all the things you havementioned.
Um But it I mean, they've saidthat in the past and they made
(08:41):
decisions that seem counter tothe data that exists.
So, I mean, this statement to methough does seem a little bit
more definitive than the lastone, in the sense that it's uh,
you know, it seems to close theloop a little bit and say, well,
we really now uh are we've madethe decision we can and we have
to now look outward and seewhere where the next moves are.
SPEAKER_01 (09:01):
The data didn't support um a rate cut or a rate
hike.
SPEAKER_02 (09:06):
Not this time, but the one before.
SPEAKER_01 (09:07):
I think it was but but back in July, the data was
right where it needed to be.
Yeah, but there was somethingthat spooked the RBA to say
we're not gonna cut, we're gonnashock the market, we're gonna
sit on hold and we're gonnawatch.
Yeah, then they're essentiallyyou're going about power being
bullied in America.
Well, the RBA were essentiallybullied into a rate cut here in
August.
Of course, yeah.
After not delivering in July.
(09:29):
Um, but then data came out afterthat meeting, it was like, oh,
now I see, as we discussed inone of our previous podcasts,
now I see what the RBA is sayingbecause there was a little bit
of upward pressure um oninflation and and where the
economy was going and propertyprices.
Prop track have got Sydneyproperty prices up 0.7% for the
month in Sydney, uh annualized.
(09:52):
That's decisive growth.
Strong.
Um so there's just a few thingsthere that are probably got the
RBA saying no, we're we've gotus we've got our settings about
right.
SPEAKER_02 (10:01):
And it can't be just before we move on to talk about
PropTrack and uh SQM's kind ofdata for for the week and the
month, uh, we also can't forgetthat you know, globally,
excluding economy, we're movinginto a pretty uncertain
geopolitical environment at themoment.
I think this is probably themost active uh geopolitical
climate we've been in for quitesome time.
(10:22):
And to me, certainly it feelslike this thing's constantly
evolving, uh, and that has to beplaying a role on, you know,
we've talked about the physicalimpact of things like shipping
lanes, but it's also playing arole on the sentiment of just
global relations, I think, whichis going to impact the market
here.
SPEAKER_01 (10:37):
It's it's absolutely clear that a number of major
countries are preparing for war.
Yeah.
Or actively beginning.
Yeah, yeah.
Like America are doubling theiruh stockpiles.
SPEAKER_02 (10:51):
All the generals just got called in for a for a
weird, France seeminglypointless meeting.
SPEAKER_01 (10:56):
France has told their hospitals to be ready on
alert for for for war in thenext few years and to be able to
take a certain number ofcasualties.
Oh, it's really dialing up.
It's it's absolutelyfrightening.
SPEAKER_02 (11:07):
Yeah.
Yeah.
Housing in Sydney will be theleast of uh least of the world's
concerns, that's for sure.
Uh as we move forward then,Pete, uh, you mentioned
PropTracks got house prices up0.7% in Sydney for the month uh
annualised, which is verystrong.
What uh what else does PropTrackhave to say about Sydney sales
and how uh you know, alongsidethat, how does SQM researchers
(11:29):
data around auction clearancesuh and and you know stock levels
on the market?
SPEAKER_01 (11:36):
We're going into grand final weekend, October Day
long weekend in Sydney, um, apretty quiet weekend.
So the auctions last weekend interms of numbers were very high.
1623 auctions last week inSydney with a clearance rate of
53%.
Um, 474 were sold prior, 387under the hammer.
(11:56):
So again, vendors on the wholeare taking the early money, um,
which is understandable.
Um so what Sydney'sexperiencing, whilst it's
strong, um, we're also seeingthat more broadly around the
country that house prices areedging up.
Um so uh there's no doubt thatum uh as PropTrack have said in
(12:18):
a recent statement, demand hasreaccelerated, reaccelerated in
Sydney and Melbourne, marking aturnaround from the slower
conditions observed in late2024.
Uh Darwin has swung from inertiain 2024 to leading annual growth
amongst the capitals.
And Melbourne is closing in onits 2022 peak with relatively
with relative affordability andstrong population growth
(12:41):
restoring its appeal.
So property markets are startingto bubble, which will definitely
keep the RBA on the sideline.
And if it gets too strong, forcethe RBA's hand, as Warren Hogan
has suggested.
On the ground, um, we're seeingreally tight conditions in the
rental market.
Vacancy's really low.
We expect that uh when there'sanother wave of international
(13:03):
students and people coming intothe city for the new year,
rental open houses over thesummer will be hotly contested.
Tenants that don't want to moveshould really uh look to lock
in, lock in uh something withtheir landlord at the moment.
And uh interestingly, um, youknow, you've always as a real
estate agent, you've always gothot stock.
(13:23):
A percentage of your stock isalways hot, and there's a
percentage of it that's alwaysstuck and needs a little bit
more work.
Um, we've started selling someof our listings that have been
around longer than we wouldlike, but have started started
selling, and that's always aninteresting sign that the
market's coming alive when um umthe buyers start picking off
stock that's been around alittle bit.
(13:44):
Um, so that that suggests themarket's really you know coming
to the fore.
SPEAKER_02 (13:49):
That's particularly interesting.
Uh you you talk about the oldstock being kind of
cherry-picked by buyers,particularly because I'm sure
last time we went through SQM'snumbers, the total auction
figure was about 1100.
Uh I mean now it's 1600 odd.
So that's a huge jump.
SPEAKER_01 (14:04):
That's essentially a double weekend because you'll
see the numbers come right back.
Oh, weekend, of course.
So it won't be 1,600 everyweekend.
Keeping in mind, just a quickrecap, spring has three phases
to it mid-August to the Octoberlong weekend, October long
weekend to essentially theMelbourne Cup Day, and then
Melbourne Cup Day to earlyDecember.
(14:24):
They're the three phases,unofficial phases of the spring
market, and you'll find that ummost uh vendors slot themselves
into one of those three phases.
So a whole wave of sales andstocks gone through.
It'll be a bit of a quietweekend because of the weekend
it is school holidays, longweekend, and then it'll come out
um in the next weekend or twoafter that.
SPEAKER_02 (14:46):
You mentioned uh also that one of the good ideas
for tenants who are in leases atthe moment would be to try and
solidify something for thefuture, which you know is always
a good idea if you're happy withwhere you are.
Um, are you finding through yourown uh kind of contacts and
clients within the business, isthat are you finding that your
tenants are firstly kind ofeducated to the market dynamics?
(15:07):
And secondly, are you havingrequests come through the
business to lock in uh evenpreemptively?
Or um is the trend still, andI'm reflecting a little bit back
to COVID, a trend still to justtry and hunt around lease end
time to get a better dealsomewhere to try and you know
move around where that's adangerous game right now.
SPEAKER_01 (15:25):
There's no one, there's no, there's not many.
I won't say there's no one.
There's there's very few peoplelooking to play the game from a
tenant's perspective.
They're just so preferring tosit still.
Uh no, well, um, if the if theif the increase is fair and
justifiable, they're agreeing toit.
If it's excessive, they're notsaying I won't pay it, I'm
leaving.
They're saying, look, that seemsexcessive.
I've gone on domain,realestate.com, and this is what
(15:48):
I've seen that's comparable andwhat it's priced as.
So I think this should be whatthe uh the basis of the uh you
know the increase should be.
So they're negotiating, which iswhich is fine.
And then sometimes a landlordwill run with that and sometimes
uh they won't.
Um but yeah, that that pointthat you we saw during COVID,
which is um if you suggested anincrease because the rental
(16:11):
market was so soft during COVID,they'd just go online and they
wouldn't even attempt tonegotiate with you.
They'd just send you atermination letter and it's like
I found something with cheaper,don't worry about it, I'm out of
here.
Those days are long gone.
SPEAKER_02 (16:23):
With the then with the relatively low vacancy rates
and the increased stock levelscoming to market, have you seen
any indication at this stage,and it's still early in spring,
as as you've said, thatinvestors are looking to return
into the Sydney market?
No.
What's the major factor, do youthink?
Is it prices, yield?
SPEAKER_01 (16:40):
What's you know what's all of the above prices,
yield, overregulation.
Um, you can get a decent returnon cash still.
We've only had three interestrate cuts cuts, of course.
So the cash rate's 3.6%.
So what's the bank paying you?
4%?
Uh so my bank's paying me 4.85.
SPEAKER_02 (16:57):
Oh, well, that's that's probably overs for the
current.
I think it would that's with INGfor anyone who's interested.
Uh they tend to pay high savingsrates.
SPEAKER_01 (17:04):
Yeah, so it's it's somewhere in the fours.
So if you can go fours risk-freeor go and buy a property market
that is uh rising and looksfully priced to get a to get a
you know, a fairly underwhelmingyield relative to a risk-free
four point something percentwith the bank, yeah.
You'd sit on your cash, you'd umyou might play the um buy some
(17:25):
gold.
Yeah, maybe it's too late, maybeit's not.
SPEAKER_02 (17:30):
Well, it's a finite resource.
I don't think you can be toolate.
SPEAKER_01 (17:32):
Everyone I read too says that you know, until you
sell see C silver break through$50, there's still run price to
run there as well.
Um, so yeah, that's I thinkthere's plenty of other places
to park cash.
Why would you park cash in inproperty as an investor and then
pay land tax?
SPEAKER_02 (17:49):
Oh, look, I I agree with all of those things.
Uh, but that doesn't change thefact that there are you know
there are investors alwayscoming to the market, and it's
something you know we've got.
SPEAKER_01 (17:56):
Well, I wish I wish there was.
That's what they tell us in themedia.
That there's these greedyinvestors all taking advantage
of negative queuing.
It's like, well, I haven't metany in 10 years.
You know what I mean?
So um, this is the thing is thatuh people are squealing about
the rental market.
Let's beat up landlords.
It's like you can beat uplandlords as much as you like,
they'll just move their moneysomewhere else, which is what
they've done.
(18:17):
Rental books are shrinking rightacross the real estate industry.
There's no new supply, as muchas there's um, you know, new
supply muted in the uh in thepipeline, and they're muted's
the right word.
Yeah, and they've got um they'vethey've got um uh you know the
the welcome to Australia doorswide open uh at the airport and
(18:38):
people are just freely flowingin here.
So what do you think is going tohappen to the rental market?
SPEAKER_02 (18:43):
Do you think, and this is uh maybe asking a
challenging question, but one ofthe big things in the US that
that tenants are constantly kindof barking about is uh you know,
large corporate, you know,Blackstone-style companies
investing in large swathes ofrental property and land
banking, etc.
etc.
Do you think with the pooryields, the high prices, the
(19:05):
unpredictability, the costs, doyou think that that is something
of an inevitability or alikelihood here?
As you know, mum and dadinvestors realize that it's a
terrible opportunity for them.
There's so many costs and risksinvolved.
Do you think it will end upbeing a situation where
corporates end up, you know,corporates for lack of a better
term, end up buying rentals andinvestments and then really
monopolizing and and making itworse?
SPEAKER_01 (19:27):
Look, never say never, you would hope not, but
the way we're going, it can't beruled out.
I think the conditions suit it,right?
Um, yeah, I don't think it'll bein Sydney.
Um, but you know, if you're ifyou're getting out into the
regions um uh in in the rightlocality, that could work with
the right infrastructure.
SPEAKER_02 (19:46):
Yeah.
Well, let's hope it doesn'thappen, that's for sure.
Um as we move towards the end oftoday's discussion, Peter,
there's a couple of more thingsI want to just check off uh with
you.
Uh the first one being at thetime of recording, we uh have
just entered the phase where thefirst home buyers grant has come
into effect.
Um, I know we we've touched onthis a few times over the weeks,
(20:06):
and you know, you don't want togive too much credit to it,
which is fine.
I don't really want to talkabout it too much either.
But um, my question for you isgiven that the policy is now
theoretically in effect, haveyou had any shift in
conversations?
Has anyone come to you alreadyand said, hey, you know, I have
access to this money now, we canget on board with it.
Or inversely, have you had anyvendors uh have discussions with
(20:29):
you about their pricing or thecampaign strategy now that this
has come into effect?
SPEAKER_01 (20:34):
Well, the bottom end of the market's been very
sluggish for a long time.
So when we've spoken about thestrength of the market, it has
tended to be higher prices.
This will add some much neededstimulus and support for the
bottom end of the market.
And because um there is uh a lotof B-grade built units out
(20:54):
there, it'll take time for thisto really you know have an
impact on the market, but overtime it could.
So it's not like a complete cashum you know, cash incentive that
sort of turbocharges the thefirst home buyer.
It it is very generousconditions for the first home
(21:16):
buyer.
Um, and I think it'll play abigger role in in some markets
than others.
So I think affordable housingaround a million dollars in you
know Western Sydney, forexample, um will probably go
really, really well.
Yep.
Um whereas uh when we um we comeinto the inner city, is this
(21:37):
going to make one bedroomapartments around 800,000 that
have got high strata levies andbuilding defects, is of which
unfortunately there's too manyof, is that gonna make them
suddenly appealing to first homebuyers?
We're not seeing that.
We are seeing some first homebuyers fresh to the market take
a look at it on the back ofthis, but it's not gonna create
(21:58):
a boom instantly.
SPEAKER_02 (22:00):
I wonder too, uh, one of the things that I found
in real estate, which I didn'trealise before coming into the
industry, is the banks or thethe lenders' hesitancy to lend
out on uh apartments that areless than 40 square meters.
So, you know, those that thenrequire a much higher LVR, 50% I
think was kind of the standard.
I wonder, and I don't know ifyou know the answer to this, but
does the government's policyalso override those sub 40
(22:23):
square meter apartments andallow for a 5% deposit?
Because if it does, I think thatwill open up a huge section of
the market that has previouslybeen unattainable for many
people because they couldn't get50% up front.
SPEAKER_01 (22:34):
Uh, I don't think so.
I don't think that would umoverride the the lenders' uh
issues around that.
SPEAKER_02 (22:41):
Yeah.
Okay.
Well, look, one of the bigproblems that first-home buyers
have at TUF is supply, and wetalk about this all the time.
Yeah, I think it's particularlyimportant or relevant to talk
about the fact that just uh inthe last couple of days, your
friends in the Inner WestCouncil, uh particularly Mayor,
you know, led by Mayor DarcyByrne, uh approved 31,000 new
(23:04):
apartments for the Inner West,uh, which was met with huge
amounts of opposition.
It was also met with hugeamounts of support.
Uh it was a really strong andpolarizing outcome.
That seems like a good, youknow, it's a it's one of the
first positive things to comeout of the idea to get more
housing built.
Um, have you any thoughts about,firstly, the Inner West's
(23:24):
decision to approve those31,000?
Uh, and you know, any sense thatthere's been any real movement
on this housing supply issue?
SPEAKER_01 (23:32):
Uh, look, so couple of couple of things that have
come out in recent times.
We've discussed the 10,000 newhomes in Willara.
Yep.
I saw a report, they've slated4,000 new homes to go in cow
paddocks out at Mulgoa.
Um, that was a Channel 7 report.
I think Murvack are behind thatone.
Yep.
And then, as you quite correctlysay, 30,000 new apartments were
(23:53):
approved by Inner West Councilfor over the next 15 years.
The ABC reported it as such.
Lay back councillors have usedtheir numbers to push through a
controversial plan to rezoneswathes of residential land in
Sydney's Inner West to buildmore than 30,000 high-density
apartments over the next 15years.
(24:14):
The Our Fairer Future Plan waspassed by a single vote by the
Inner West Council with alleight Labour councillors
supporting the motion and theremaining seven councillors
voting against.
The packed public galleryerupted as the result was
(24:34):
declared with applause from rowsof supporters wearing Sydney
Yimby t-shirts and cries ofshame from residents opposed to
the proposal.
Now, uh, you say that there's uhwidespread opposition to um
30,000 uh dwellings and umwidespread support.
(24:56):
I would say there was supportwas for for all of these
apartments.
My guess is it was fairly wellconfined to the three rows of
people at that leading.
SPEAKER_02 (25:07):
I think that's uh that's probably a little bit
pessimistic, Peter.
SPEAKER_01 (25:10):
Well, I I I do well, I don't know how I don't know if
that is the case.
Yeah.
I am not running into anyonethat's saying I have a plan that
works.
Can you hear me out?
And I say, what is your plan?
Let's say, let's build 30,000more new apartments in the inner
west, besides apparently thepeople that took up the front
(25:30):
three rows with Yimby t-shirtson at this meeting.
SPEAKER_02 (25:34):
Do you know I it doesn't escape me that the
leader of the New South WalesLiberal Party just this week
said that the Liberal Party heleads is a Yimby party into the
future.
SPEAKER_01 (25:44):
Oh well that's that's that's fine.
That's I'm I'm not talking alongpolitical lines.
I don't I don't see a case wherethe people have said flood the
city with new entrants and thenwe'll build tens of thousands of
new dwellings in every region tohouse them.
I'm just not seeing anywherewhere that has been a something
(26:06):
that the people were lookingfor.
Yeah.
And and now we've beengaslighted saying that um, you
know, we're um what are theysaying about people who are anti
this?
Shame from residents opposed tothe proposal and and using, you
know, what would you say, um youknow, carefully crafted um uh
(26:28):
slogans like our fairer futureplan.
SPEAKER_02 (26:32):
I mean, that's that's an inspiring name for a
plan, our fairer future.
Everyone wants a fairer future.
I look the the bit I the the theapproval process I think was
inevitable because the USCouncil is strong Labour, we
know that.
Um I am interested, or actuallywhat caught me by surprise, and
I don't know if it caught you bysurprise, but 8,000 of the 31
(26:52):
are for the Parameter RoadCorridor that we've talked about
last time or the time before wespoke, um, and a number more uh
sorry, 8,000, I think aroundCamperdown and so on and so
forth.
Uh but what was surprising wasthe original proposal was for
more than 31,000.
Uh, and a large majority ofthose ended up being negotiated
out at the last minute in placeslike Dulwich Hill and
(27:14):
Marrickville and possiblyPetersham?
I can't remember the thirdsuburb.
SPEAKER_01 (27:17):
Well, that's overreach.
The government will overstatewhat they want, means of
bringing it back so they'relooking like they're uh
listening and and all of that.
The reality is that Labour has acomplete majority on the Inner
West Council.
SPEAKER_02 (27:32):
Yeah.
Of course.
SPEAKER_01 (27:33):
So who of the Labour Party was really going to go
against their their seven othercolleagues on the night to make
sure this didn't get up?
SPEAKER_02 (27:42):
Well, you know, the the optimistic, you know,
democratic participant in mesuggests that they're, you know,
working for the interests oftheir voting membership, right?
And and their constituency,that's the whole idea.
Uh but I do apply.
SPEAKER_01 (27:56):
They're not working for their constituents because
no one's asking for this.
They're working for theirmasters higher up.
We've got to call it for what itis.
Yeah.
The federal government wantthis, the state government want
this, the the uh local Labourcouncil here are just towing the
line.
Yeah.
They're not working for theconstituents.
SPEAKER_02 (28:14):
No, I know they're not.
Yeah.
I'm just again, I you know, I'mputting out there that that's
what you're hoping your electedofficials will do.
But of course, in this case,it's all to fulfill you know
Chris Minne's agenda, which isto get these houses out and
elbows 1.2 million homes orwhatever it might be.
SPEAKER_01 (28:27):
Um I And I'm not against development, but
development in development ofthat magnitude in high density
areas, um, the strain on theschools, the infrastructure, the
roads, um, uh, the trades.
Yeah.
It's like I mean, the theschools is a massive one.
SPEAKER_02 (28:46):
Most of the schools in the inner west are completely
at capacity.
Yeah.
You cannot, you know, you youcan't get in anywhere.
And there is, you know, evenwhere I live, uh, which is in
the Strathfield LGA, there aresome local schools, public
schools that are saying, look,you know, we don't we don't have
space.
Doesn't matter that you livehere.
Yeah.
Which is crazy to me.
SPEAKER_01 (29:03):
Yeah.
SPEAKER_02 (29:03):
Uh and it is going to get worse.
SPEAKER_01 (29:04):
So we'll see how it all plays out.
But, you know, Chris Mins, we'vediscussed it before.
Chris Mins was elected and thentold us the week after he was
elected that he had a mandate tobuild all these apartments in
the inner city, and I'm going tobuild up and not out.
And it's like, I don't rememberthat being discussed at all.
SPEAKER_02 (29:19):
Now, I suspect that's what uh Chat GPT tells
him when he downloads hisconversations to it at night
time, Peter.
SPEAKER_01 (29:25):
I'll let you confirm or deny that with him next time
we have dinner with him.
SPEAKER_02 (29:29):
Look, uh, interesting discussion.
I I certainly hope, look,regardless of the outcome with
the uh approval, I certainlyjust hope that they have some
rigorous standards in place tomake sure that this is not
another mass building projectthat ends up with shoddy
construction, poor outcomes,opal towers, and and you know,
the like.
Um, because Sydney does need tosolve the crisis in some way.
(29:51):
Whether this is the right answeror not, who knows?
But uh at least, you know, I canonly hope that they do it
properly, regardless.
Look, uh, along our Outside ofthat, Peter, good robust
discussion today.
I certainly appreciate youcoming to talk.
SPEAKER_01 (30:04):
Yeah, good to catch up.
Thanks, Kieran.
SPEAKER_02 (30:05):
Good to talk to you, Peter, and thanks to everyone
for listening to Current MarketInsights.
We look forward to speaking withyou next time.
SPEAKER_00 (30:11):
Thanks for joining us on the Current Market
Insights podcast.
Brought to you by HarrisPartners Real Estate.
The podcast providing realestate insights you won't find
anywhere else.
Hello and welcome to another edition of Current
Market Insights.
My name is Kieran O'Brien andwith me is Mr.
Peter O'Malley.
Peter, hello.
Kieran, great to see you.
Great to see you for anotherweek, Peter.
I want to jump in today'sepisode.
We're going to talk a lot aboutsales and rentals and what's
going on in the Sydney market.
But I thought if it's okay withyou, we might start the episode
today just discussing uh thelatest decision from the RBA
(00:53):
around their monetary policy,given it's probably the most
important thing that's happenedin the last week since we last
spoke.
SPEAKER_01 (00:59):
Yeah, thanks, Kieran.
Look, in a surprise to no one,um they've kept rates on hold.
The decision was unanimous bythe board.
Uh probably the thing that uh uhyou know caused the most
discussion coming out of themeeting was that there was a
sense that we may have seen thelast of rate cuts for the time
being.
There wasn't anything in here tosuggest the RBA are ready to
(01:21):
pull the trigger again.
And they're acutely aware thatum uh the employment market is
still tight and that householdconfidence um has returned on
the back of three rate cuts thisyear.
And uh therefore um there couldbe in the future some um upward
pressure on inflation, and uhthat's uh you know aided and
(01:43):
abetted by what's going on inAmerica with the tariffs and
Trump's policies areinflationary and obviously
inflation's rising in America aswe've discussed previously, and
they've cut interest rates whileinflation is going up.
Um the price of gold, um, whichis a barometer for it was about
5200, I think, when I saw ityesterday.
Uh Australia uh well no, it's alot higher than that.
(02:06):
It's fifty done nudging fifty,nine hundred Australian and um
nudging thirty eight hundred andfifty dollars, three thirty
eight hundred and sixty-threedollars American.
SPEAKER_02 (02:15):
Yeah, wow.
SPEAKER_01 (02:16):
So to give people an idea, if we want to talk gold,
in the last thirty days, theprice of gold in Australian
dollars has moved from fiftyfour hundred to fifty eight
hundred and forty-four.
And in the last thirty days inUS dollars, uh it's moved from
just over thirty-five hundred tothree thousand eight hundred and
(02:39):
sixty-two dollars as we speak.
SPEAKER_02 (02:41):
Yeah, 10%.
That's a crazy rise.
I um uh as you say, no surprisefrom the RBA that they did
decide to hold rates, and theydo mention their policy that you
know unemployment's steady, butit's still kind of in a bit of a
precarious situation.
Uh, one thing that they domention in this statement, which
I thought was interesting andobviously ties into what we talk
(03:03):
about a lot, is they mentionthat the housing market is a key
factor in their decision makinghere.
You know, they say the housingmarket is strengthening, uh,
it's a s they think it's a signthat interest rate cuts are
having an effect, whether it'sthe desired effect or not, uh,
remains to be seen.
But they, you know, to me, theymake the point that housing is
too strong, credit's available,and the concern that if
(03:24):
anything, it's just going to runfrom here.
Uh, and they to me it seems likethey're leaving the door open to
go up or down, depending on youknow, really what happens on the
city.
SPEAKER_01 (03:32):
I'm glad you raised that point because I go to an
economist that's a bit of acontrarian when it comes to
these matters, uh, Judo BanksWarren Hogan.
And he wrote on social mediaafter the uh rate decision he
said the RBA is tiptoeing awayfrom rate cuts.
The next move is now evenlybalanced between a hike and a
(03:54):
cut.
Time frames are important as therate cut window likely closes
around mid-2026.
The hiking window opens aroundMay 2026.
SPEAKER_02 (04:07):
Yeah.
So he's suggesting that the samething.
It's a bit of a line ball atthis stage, but we have a so
what I mean.
He's saying it's a line ball asto whether the next move is up
or down.
But what's his rationale for thetiming?
Do you think?
Why, you know, why is hesuggesting that if we don't do
anything before May, as in cutbefore May, that it's an
inevitability we got?
SPEAKER_01 (04:27):
I think markets um have priced in that inflation in
in 12 months will be moving upagain.
Um uh could be picking up againbased on what's happening in
America.
SPEAKER_02 (04:37):
Yeah, okay.
SPEAKER_01 (04:38):
So if you look if you look at the yields, you
know, the yields in America,they are suggesting that the um,
yes, they the uh Federal Reservecan cut at the moment, but
inflation and markets will forcethem to increase by even more
later.
Warren, they can, but shouldthey?
SPEAKER_02 (04:52):
I mean, that's the the million dollar question,
right?
SPEAKER_01 (04:54):
Uh well it'll take someone big to to stand up to
Trump if that's what's going tohappen.
But um, in fairness to WarrenHogan, he was someone when
everyone was calling for ratecuts, saying be careful about
what you wish for, because arate cut can today can mean a
rate hike tomorrow, which willultimately help nobody.
SPEAKER_02 (05:13):
Yeah.
unknown (05:14):
Yeah.
SPEAKER_02 (05:14):
And as we said for oh, however long now, 12 months,
maybe longer, on the podcasthere, um, there was a whole
period, and there still is formany people, where a rate hold
is akin to a rate rise becauseof the excess stress.
So his argument holds really inline with what we had said that
uh a little bit prolong, youknow, a bit more prolonged pain
at a current level is going tobe better in the long run than a
(05:36):
bit of short-term gain and theninevitably a hike again, which I
I suspect will will come as asurprise to a lot of people if
it does happen.
You know, that we've we've kindof been through this period of
tough economic conditions.
Now we've had relief, and Ithink there'll be a lot of
people that think, oh, well, wecan't, surely we're not going to
go back up now.
SPEAKER_01 (05:54):
Look, there's a couple of factors to this.
The first is that inflation canbe imported into Australia no
matter what Australia's doing.
SPEAKER_02 (06:01):
Yep.
SPEAKER_01 (06:02):
So the RBA are not in complete control of the
inflation number here inAustralia, nor is the
government.
Um, the other one, which I thinkis coming through here, is that
if we cut rates to give cost ofliving relief and then it pops
out as higher property prices,as we've always said, people
will refine against their newnew refinance against their
(06:24):
newfound equity in their houseand continue expanding and
living in the economy as theywere, meaning the rate battle's
not being won, but the propertybubble is just expanding.
Yeah.
And the property bubble is goingto continue to expand under
certain conditions because notenough supply.
Not enough supply.
And people coming in through thefront door.
SPEAKER_02 (06:44):
Yeah.
I uh I've got I've got your cardnext to me that outlines your
two key points.
Look, uh that's it's actually apretty good segue, I think,
Pete.
Um one of the other things Iwant to talk about, uh actually,
before we do that, do you thinkthat most people had expected
the RBA would hold?
Do you think that there's beenany shift in sentiment as a
(07:05):
result of the announcement uh onthe 30th?
And uh, you know, anyone thatyou've spoken to in the market,
are they expressingdisappointment?
Are they expressing kind ofambivalence?
Is there any uh sense out therethat people actually, you know,
really pay that much attentionto this particular rates
announcement?
SPEAKER_01 (07:21):
Uh, I think the statement was bigger than the
decision on this particularmonth.
No one really expected the RBAto cut, um, or hike for that
matter, uh, on September 30.
I've seen some seasonedeconomists, people who know a
lot more about money marketsthan than you and I do, and and
they are slowly but surelysaying, forget two rate cuts.
You'll be lucky if you see onemore.
(07:43):
Yeah.
Uh that was Mark Burrus's viewfor what it's worth.
Um he he he sort of picked upthe same tone in in the RBA
statement that most of us did,that they're you know, based on
the current trajectory, they'reat pretty much close to the end
of uh of their rate cuttingcycle, um, barring um an
international event.
Now the um RBA in theirstatement did use those lines
(08:07):
that I have been talking aboutafter every RBA meeting, which
is the board stands wellpositioned to respond decisively
to international developments ifthey do occur.
SPEAKER_02 (08:19):
And yeah, and um well, as you know, they say here
they'll be attentive to the dataand the evolving assessment of
the outlook and risks to guideits decisions.
In doing so, it will pay closeattention to developments in the
global economy and financialmarkets, trends in domestic
demand and the outlook forinflation and the labour market,
all the things you havementioned.
Um But it I mean, they've saidthat in the past and they made
(08:41):
decisions that seem counter tothe data that exists.
So, I mean, this statement to methough does seem a little bit
more definitive than the lastone, in the sense that it's uh,
you know, it seems to close theloop a little bit and say, well,
we really now uh are we've madethe decision we can and we have
to now look outward and seewhere where the next moves are.
SPEAKER_01 (09:01):
The data didn't support um a rate cut or a rate
hike.
SPEAKER_02 (09:06):
Not this time, but the one before.
SPEAKER_01 (09:07):
I think it was but but back in July, the data was
right where it needed to be.
Yeah, but there was somethingthat spooked the RBA to say
we're not gonna cut, we're gonnashock the market, we're gonna
sit on hold and we're gonnawatch.
Yeah, then they're essentiallyyou're going about power being
bullied in America.
Well, the RBA were essentiallybullied into a rate cut here in
August.
Of course, yeah.
After not delivering in July.
(09:29):
Um, but then data came out afterthat meeting, it was like, oh,
now I see, as we discussed inone of our previous podcasts,
now I see what the RBA is sayingbecause there was a little bit
of upward pressure um oninflation and and where the
economy was going and propertyprices.
Prop track have got Sydneyproperty prices up 0.7% for the
month in Sydney, uh annualized.
(09:52):
That's decisive growth.
Strong.
Um so there's just a few thingsthere that are probably got the
RBA saying no, we're we've gotus we've got our settings about
right.
SPEAKER_02 (10:01):
And it can't be just before we move on to talk about
PropTrack and uh SQM's kind ofdata for for the week and the
month, uh, we also can't forgetthat you know, globally,
excluding economy, we're movinginto a pretty uncertain
geopolitical environment at themoment.
I think this is probably themost active uh geopolitical
climate we've been in for quitesome time.
(10:22):
And to me, certainly it feelslike this thing's constantly
evolving, uh, and that has to beplaying a role on, you know,
we've talked about the physicalimpact of things like shipping
lanes, but it's also playing arole on the sentiment of just
global relations, I think, whichis going to impact the market
here.
SPEAKER_01 (10:37):
It's it's absolutely clear that a number of major
countries are preparing for war.
Yeah.
Or actively beginning.
Yeah, yeah.
Like America are doubling theiruh stockpiles.
SPEAKER_02 (10:51):
All the generals just got called in for a for a
weird, France seeminglypointless meeting.
SPEAKER_01 (10:56):
France has told their hospitals to be ready on
alert for for for war in thenext few years and to be able to
take a certain number ofcasualties.
Oh, it's really dialing up.
It's it's absolutelyfrightening.
SPEAKER_02 (11:07):
Yeah.
Yeah.
Housing in Sydney will be theleast of uh least of the world's
concerns, that's for sure.
Uh as we move forward then,Pete, uh, you mentioned
PropTracks got house prices up0.7% in Sydney for the month uh
annualised, which is verystrong.
What uh what else does PropTrackhave to say about Sydney sales
and how uh you know, alongsidethat, how does SQM researchers
(11:29):
data around auction clearancesuh and and you know stock levels
on the market?
SPEAKER_01 (11:36):
We're going into grand final weekend, October Day
long weekend in Sydney, um, apretty quiet weekend.
So the auctions last weekend interms of numbers were very high.
1623 auctions last week inSydney with a clearance rate of
53%.
Um, 474 were sold prior, 387under the hammer.
(11:56):
So again, vendors on the wholeare taking the early money, um,
which is understandable.
Um so what Sydney'sexperiencing, whilst it's
strong, um, we're also seeingthat more broadly around the
country that house prices areedging up.
Um so uh there's no doubt thatum uh as PropTrack have said in
(12:18):
a recent statement, demand hasreaccelerated, reaccelerated in
Sydney and Melbourne, marking aturnaround from the slower
conditions observed in late2024.
Uh Darwin has swung from inertiain 2024 to leading annual growth
amongst the capitals.
And Melbourne is closing in onits 2022 peak with relatively
with relative affordability andstrong population growth
(12:41):
restoring its appeal.
So property markets are startingto bubble, which will definitely
keep the RBA on the sideline.
And if it gets too strong, forcethe RBA's hand, as Warren Hogan
has suggested.
On the ground, um, we're seeingreally tight conditions in the
rental market.
Vacancy's really low.
We expect that uh when there'sanother wave of international
(13:03):
students and people coming intothe city for the new year,
rental open houses over thesummer will be hotly contested.
Tenants that don't want to moveshould really uh look to lock
in, lock in uh something withtheir landlord at the moment.
And uh interestingly, um, youknow, you've always as a real
estate agent, you've always gothot stock.
(13:23):
A percentage of your stock isalways hot, and there's a
percentage of it that's alwaysstuck and needs a little bit
more work.
Um, we've started selling someof our listings that have been
around longer than we wouldlike, but have started started
selling, and that's always aninteresting sign that the
market's coming alive when um umthe buyers start picking off
stock that's been around alittle bit.
(13:44):
Um, so that that suggests themarket's really you know coming
to the fore.
SPEAKER_02 (13:49):
That's particularly interesting.
Uh you you talk about the oldstock being kind of
cherry-picked by buyers,particularly because I'm sure
last time we went through SQM'snumbers, the total auction
figure was about 1100.
Uh I mean now it's 1600 odd.
So that's a huge jump.
SPEAKER_01 (14:04):
That's essentially a double weekend because you'll
see the numbers come right back.
Oh, weekend, of course.
So it won't be 1,600 everyweekend.
Keeping in mind, just a quickrecap, spring has three phases
to it mid-August to the Octoberlong weekend, October long
weekend to essentially theMelbourne Cup Day, and then
Melbourne Cup Day to earlyDecember.
(14:24):
They're the three phases,unofficial phases of the spring
market, and you'll find that ummost uh vendors slot themselves
into one of those three phases.
So a whole wave of sales andstocks gone through.
It'll be a bit of a quietweekend because of the weekend
it is school holidays, longweekend, and then it'll come out
um in the next weekend or twoafter that.
SPEAKER_02 (14:46):
You mentioned uh also that one of the good ideas
for tenants who are in leases atthe moment would be to try and
solidify something for thefuture, which you know is always
a good idea if you're happy withwhere you are.
Um, are you finding through yourown uh kind of contacts and
clients within the business, isthat are you finding that your
tenants are firstly kind ofeducated to the market dynamics?
(15:07):
And secondly, are you havingrequests come through the
business to lock in uh evenpreemptively?
Or um is the trend still, andI'm reflecting a little bit back
to COVID, a trend still to justtry and hunt around lease end
time to get a better dealsomewhere to try and you know
move around where that's adangerous game right now.
SPEAKER_01 (15:25):
There's no one, there's no, there's not many.
I won't say there's no one.
There's there's very few peoplelooking to play the game from a
tenant's perspective.
They're just so preferring tosit still.
Uh no, well, um, if the if theif the increase is fair and
justifiable, they're agreeing toit.
If it's excessive, they're notsaying I won't pay it, I'm
leaving.
They're saying, look, that seemsexcessive.
I've gone on domain,realestate.com, and this is what
(15:48):
I've seen that's comparable andwhat it's priced as.
So I think this should be whatthe uh the basis of the uh you
know the increase should be.
So they're negotiating, which iswhich is fine.
And then sometimes a landlordwill run with that and sometimes
uh they won't.
Um but yeah, that that pointthat you we saw during COVID,
which is um if you suggested anincrease because the rental
(16:11):
market was so soft during COVID,they'd just go online and they
wouldn't even attempt tonegotiate with you.
They'd just send you atermination letter and it's like
I found something with cheaper,don't worry about it, I'm out of
here.
Those days are long gone.
SPEAKER_02 (16:23):
With the then with the relatively low vacancy rates
and the increased stock levelscoming to market, have you seen
any indication at this stage,and it's still early in spring,
as as you've said, thatinvestors are looking to return
into the Sydney market?
No.
What's the major factor, do youthink?
Is it prices, yield?
SPEAKER_01 (16:40):
What's you know what's all of the above prices,
yield, overregulation.
Um, you can get a decent returnon cash still.
We've only had three interestrate cuts cuts, of course.
So the cash rate's 3.6%.
So what's the bank paying you?
4%?
Uh so my bank's paying me 4.85.
SPEAKER_02 (16:57):
Oh, well, that's that's probably overs for the
current.
I think it would that's with INGfor anyone who's interested.
Uh they tend to pay high savingsrates.
SPEAKER_01 (17:04):
Yeah, so it's it's somewhere in the fours.
So if you can go fours risk-freeor go and buy a property market
that is uh rising and looksfully priced to get a to get a
you know, a fairly underwhelmingyield relative to a risk-free
four point something percentwith the bank, yeah.
You'd sit on your cash, you'd umyou might play the um buy some
(17:25):
gold.
Yeah, maybe it's too late, maybeit's not.
SPEAKER_02 (17:30):
Well, it's a finite resource.
I don't think you can be toolate.
SPEAKER_01 (17:32):
Everyone I read too says that you know, until you
sell see C silver break through$50, there's still run price to
run there as well.
Um, so yeah, that's I thinkthere's plenty of other places
to park cash.
Why would you park cash in inproperty as an investor and then
pay land tax?
SPEAKER_02 (17:49):
Oh, look, I I agree with all of those things.
Uh, but that doesn't change thefact that there are you know
there are investors alwayscoming to the market, and it's
something you know we've got.
SPEAKER_01 (17:56):
Well, I wish I wish there was.
That's what they tell us in themedia.
That there's these greedyinvestors all taking advantage
of negative queuing.
It's like, well, I haven't metany in 10 years.
You know what I mean?
So um, this is the thing is thatuh people are squealing about
the rental market.
Let's beat up landlords.
It's like you can beat uplandlords as much as you like,
they'll just move their moneysomewhere else, which is what
they've done.
(18:17):
Rental books are shrinking rightacross the real estate industry.
There's no new supply, as muchas there's um, you know, new
supply muted in the uh in thepipeline, and they're muted's
the right word.
Yeah, and they've got um they'vethey've got um uh you know the
the welcome to Australia doorswide open uh at the airport and
(18:38):
people are just freely flowingin here.
So what do you think is going tohappen to the rental market?
SPEAKER_02 (18:43):
Do you think, and this is uh maybe asking a
challenging question, but one ofthe big things in the US that
that tenants are constantly kindof barking about is uh you know,
large corporate, you know,Blackstone-style companies
investing in large swathes ofrental property and land
banking, etc.
etc.
Do you think with the pooryields, the high prices, the
(19:05):
unpredictability, the costs, doyou think that that is something
of an inevitability or alikelihood here?
As you know, mum and dadinvestors realize that it's a
terrible opportunity for them.
There's so many costs and risksinvolved.
Do you think it will end upbeing a situation where
corporates end up, you know,corporates for lack of a better
term, end up buying rentals andinvestments and then really
monopolizing and and making itworse?
SPEAKER_01 (19:27):
Look, never say never, you would hope not, but
the way we're going, it can't beruled out.
I think the conditions suit it,right?
Um, yeah, I don't think it'll bein Sydney.
Um, but you know, if you're ifyou're getting out into the
regions um uh in in the rightlocality, that could work with
the right infrastructure.
SPEAKER_02 (19:46):
Yeah.
Well, let's hope it doesn'thappen, that's for sure.
Um as we move towards the end oftoday's discussion, Peter,
there's a couple of more thingsI want to just check off uh with
you.
Uh the first one being at thetime of recording, we uh have
just entered the phase where thefirst home buyers grant has come
into effect.
Um, I know we we've touched onthis a few times over the weeks,
(20:06):
and you know, you don't want togive too much credit to it,
which is fine.
I don't really want to talkabout it too much either.
But um, my question for you isgiven that the policy is now
theoretically in effect, haveyou had any shift in
conversations?
Has anyone come to you alreadyand said, hey, you know, I have
access to this money now, we canget on board with it.
Or inversely, have you had anyvendors uh have discussions with
(20:29):
you about their pricing or thecampaign strategy now that this
has come into effect?
SPEAKER_01 (20:34):
Well, the bottom end of the market's been very
sluggish for a long time.
So when we've spoken about thestrength of the market, it has
tended to be higher prices.
This will add some much neededstimulus and support for the
bottom end of the market.
And because um there is uh a lotof B-grade built units out
(20:54):
there, it'll take time for thisto really you know have an
impact on the market, but overtime it could.
So it's not like a complete cashum you know, cash incentive that
sort of turbocharges the thefirst home buyer.
It it is very generousconditions for the first home
(21:16):
buyer.
Um, and I think it'll play abigger role in in some markets
than others.
So I think affordable housingaround a million dollars in you
know Western Sydney, forexample, um will probably go
really, really well.
Yep.
Um whereas uh when we um we comeinto the inner city, is this
(21:37):
going to make one bedroomapartments around 800,000 that
have got high strata levies andbuilding defects, is of which
unfortunately there's too manyof, is that gonna make them
suddenly appealing to first homebuyers?
We're not seeing that.
We are seeing some first homebuyers fresh to the market take
a look at it on the back ofthis, but it's not gonna create
(21:58):
a boom instantly.
SPEAKER_02 (22:00):
I wonder too, uh, one of the things that I found
in real estate, which I didn'trealise before coming into the
industry, is the banks or thethe lenders' hesitancy to lend
out on uh apartments that areless than 40 square meters.
So, you know, those that thenrequire a much higher LVR, 50% I
think was kind of the standard.
I wonder, and I don't know ifyou know the answer to this, but
does the government's policyalso override those sub 40
(22:23):
square meter apartments andallow for a 5% deposit?
Because if it does, I think thatwill open up a huge section of
the market that has previouslybeen unattainable for many
people because they couldn't get50% up front.
SPEAKER_01 (22:34):
Uh, I don't think so.
I don't think that would umoverride the the lenders' uh
issues around that.
SPEAKER_02 (22:41):
Yeah.
Okay.
Well, look, one of the bigproblems that first-home buyers
have at TUF is supply, and wetalk about this all the time.
Yeah, I think it's particularlyimportant or relevant to talk
about the fact that just uh inthe last couple of days, your
friends in the Inner WestCouncil, uh particularly Mayor,
you know, led by Mayor DarcyByrne, uh approved 31,000 new
(23:04):
apartments for the Inner West,uh, which was met with huge
amounts of opposition.
It was also met with hugeamounts of support.
Uh it was a really strong andpolarizing outcome.
That seems like a good, youknow, it's a it's one of the
first positive things to comeout of the idea to get more
housing built.
Um, have you any thoughts about,firstly, the Inner West's
(23:24):
decision to approve those31,000?
Uh, and you know, any sense thatthere's been any real movement
on this housing supply issue?
SPEAKER_01 (23:32):
Uh, look, so couple of couple of things that have
come out in recent times.
We've discussed the 10,000 newhomes in Willara.
Yep.
I saw a report, they've slated4,000 new homes to go in cow
paddocks out at Mulgoa.
Um, that was a Channel 7 report.
I think Murvack are behind thatone.
Yep.
And then, as you quite correctlysay, 30,000 new apartments were
(23:53):
approved by Inner West Councilfor over the next 15 years.
The ABC reported it as such.
Lay back councillors have usedtheir numbers to push through a
controversial plan to rezoneswathes of residential land in
Sydney's Inner West to buildmore than 30,000 high-density
apartments over the next 15years.
(24:14):
The Our Fairer Future Plan waspassed by a single vote by the
Inner West Council with alleight Labour councillors
supporting the motion and theremaining seven councillors
voting against.
The packed public galleryerupted as the result was
(24:34):
declared with applause from rowsof supporters wearing Sydney
Yimby t-shirts and cries ofshame from residents opposed to
the proposal.
Now, uh, you say that there's uhwidespread opposition to um
30,000 uh dwellings and umwidespread support.
(24:56):
I would say there was supportwas for for all of these
apartments.
My guess is it was fairly wellconfined to the three rows of
people at that leading.
SPEAKER_02 (25:07):
I think that's uh that's probably a little bit
pessimistic, Peter.
SPEAKER_01 (25:10):
Well, I I I do well, I don't know how I don't know if
that is the case.
Yeah.
I am not running into anyonethat's saying I have a plan that
works.
Can you hear me out?
And I say, what is your plan?
Let's say, let's build 30,000more new apartments in the inner
west, besides apparently thepeople that took up the front
(25:30):
three rows with Yimby t-shirtson at this meeting.
SPEAKER_02 (25:34):
Do you know I it doesn't escape me that the
leader of the New South WalesLiberal Party just this week
said that the Liberal Party heleads is a Yimby party into the
future.
SPEAKER_01 (25:44):
Oh well that's that's that's fine.
That's I'm I'm not talking alongpolitical lines.
I don't I don't see a case wherethe people have said flood the
city with new entrants and thenwe'll build tens of thousands of
new dwellings in every region tohouse them.
I'm just not seeing anywherewhere that has been a something
(26:06):
that the people were lookingfor.
Yeah.
And and now we've beengaslighted saying that um, you
know, we're um what are theysaying about people who are anti
this?
Shame from residents opposed tothe proposal and and using, you
know, what would you say, um youknow, carefully crafted um uh
(26:28):
slogans like our fairer futureplan.
SPEAKER_02 (26:32):
I mean, that's that's an inspiring name for a
plan, our fairer future.
Everyone wants a fairer future.
I look the the bit I the the theapproval process I think was
inevitable because the USCouncil is strong Labour, we
know that.
Um I am interested, or actuallywhat caught me by surprise, and
I don't know if it caught you bysurprise, but 8,000 of the 31
(26:52):
are for the Parameter RoadCorridor that we've talked about
last time or the time before wespoke, um, and a number more uh
sorry, 8,000, I think aroundCamperdown and so on and so
forth.
Uh but what was surprising wasthe original proposal was for
more than 31,000.
Uh, and a large majority ofthose ended up being negotiated
out at the last minute in placeslike Dulwich Hill and
(27:14):
Marrickville and possiblyPetersham?
I can't remember the thirdsuburb.
SPEAKER_01 (27:17):
Well, that's overreach.
The government will overstatewhat they want, means of
bringing it back so they'relooking like they're uh
listening and and all of that.
The reality is that Labour has acomplete majority on the Inner
West Council.
SPEAKER_02 (27:32):
Yeah.
Of course.
SPEAKER_01 (27:33):
So who of the Labour Party was really going to go
against their their seven othercolleagues on the night to make
sure this didn't get up?
SPEAKER_02 (27:42):
Well, you know, the the optimistic, you know,
democratic participant in mesuggests that they're, you know,
working for the interests oftheir voting membership, right?
And and their constituency,that's the whole idea.
Uh but I do apply.
SPEAKER_01 (27:56):
They're not working for their constituents because
no one's asking for this.
They're working for theirmasters higher up.
We've got to call it for what itis.
Yeah.
The federal government wantthis, the state government want
this, the the uh local Labourcouncil here are just towing the
line.
Yeah.
They're not working for theconstituents.
SPEAKER_02 (28:14):
No, I know they're not.
Yeah.
I'm just again, I you know, I'mputting out there that that's
what you're hoping your electedofficials will do.
But of course, in this case,it's all to fulfill you know
Chris Minne's agenda, which isto get these houses out and
elbows 1.2 million homes orwhatever it might be.
SPEAKER_01 (28:27):
Um I And I'm not against development, but
development in development ofthat magnitude in high density
areas, um, the strain on theschools, the infrastructure, the
roads, um, uh, the trades.
Yeah.
It's like I mean, the theschools is a massive one.
SPEAKER_02 (28:46):
Most of the schools in the inner west are completely
at capacity.
Yeah.
You cannot, you know, you youcan't get in anywhere.
And there is, you know, evenwhere I live, uh, which is in
the Strathfield LGA, there aresome local schools, public
schools that are saying, look,you know, we don't we don't have
space.
Doesn't matter that you livehere.
Yeah.
Which is crazy to me.
SPEAKER_01 (29:03):
Yeah.
SPEAKER_02 (29:03):
Uh and it is going to get worse.
SPEAKER_01 (29:04):
So we'll see how it all plays out.
But, you know, Chris Mins, we'vediscussed it before.
Chris Mins was elected and thentold us the week after he was
elected that he had a mandate tobuild all these apartments in
the inner city, and I'm going tobuild up and not out.
And it's like, I don't rememberthat being discussed at all.
SPEAKER_02 (29:19):
Now, I suspect that's what uh Chat GPT tells
him when he downloads hisconversations to it at night
time, Peter.
SPEAKER_01 (29:25):
I'll let you confirm or deny that with him next time
we have dinner with him.
SPEAKER_02 (29:29):
Look, uh, interesting discussion.
I I certainly hope, look,regardless of the outcome with
the uh approval, I certainlyjust hope that they have some
rigorous standards in place tomake sure that this is not
another mass building projectthat ends up with shoddy
construction, poor outcomes,opal towers, and and you know,
the like.
Um, because Sydney does need tosolve the crisis in some way.
(29:51):
Whether this is the right answeror not, who knows?
But uh at least, you know, I canonly hope that they do it
properly, regardless.
Look, uh, along our Outside ofthat, Peter, good robust
discussion today.
I certainly appreciate youcoming to talk.
SPEAKER_01 (30:04):
Yeah, good to catch up.
Thanks, Kieran.
SPEAKER_02 (30:05):
Good to talk to you, Peter, and thanks to everyone
for listening to Current MarketInsights.
We look forward to speaking withyou next time.
SPEAKER_00 (30:11):
Thanks for joining us on the Current Market
Insights podcast.
Brought to you by HarrisPartners Real Estate.
The podcast providing realestate insights you won't find
anywhere else.
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