1 00:00:03,960 --> 00:00:06,840 Jennifer Duke: Welcome to the Fear and Greed Daily Interview. I'm Jennifer 2 00:00:06,840 --> 00:00:10,110 Jennifer Duke: Duke. The Matildas might be the topic of conversation at 3 00:00:10,110 --> 00:00:12,929 Jennifer Duke: most barbecues and water coolers right now, but it's a 4 00:00:12,929 --> 00:00:16,020 Jennifer Duke: safe bet that the property market isn't far behind and 5 00:00:16,020 --> 00:00:20,340 Jennifer Duke: there's plenty to discuss. Yesterday, National Cabinet announced additional measures 6 00:00:20,370 --> 00:00:23,640 Jennifer Duke: aimed at tackling housing affordability, and it's really all about 7 00:00:23,640 --> 00:00:26,940 Jennifer Duke: improving supply. Talking to me about the housing market today 8 00:00:26,940 --> 00:00:30,269 Jennifer Duke: is Tim Lawless, Head of Research for CoreLogic. Tim, welcome 9 00:00:30,270 --> 00:00:31,169 Jennifer Duke: back to Fear and Greed. 10 00:00:31,799 --> 00:00:33,358 Tim Lawless: Many thanks, Jen. It's great to be here. 11 00:00:33,989 --> 00:00:37,589 Jennifer Duke: So Tim, just how bad is the housing affordability situation 12 00:00:37,590 --> 00:00:38,790 Jennifer Duke: in Australia right now? 13 00:00:39,930 --> 00:00:43,620 Tim Lawless: Well, it depends what aspect you're looking at. Some areas 14 00:00:43,620 --> 00:00:47,130 Tim Lawless: of affordability have actually improved over the past year or 15 00:00:47,130 --> 00:00:50,880 Tim Lawless: so because housing values are generally still below their peak 16 00:00:50,880 --> 00:00:53,638 Tim Lawless: from last year, even though they're starting to rise again. 17 00:00:54,299 --> 00:00:57,060 Tim Lawless: So that means the dwelling value to income ratios actually 18 00:00:57,180 --> 00:01:00,029 Tim Lawless: come down a little bit. So markets like Sydney, which 19 00:01:00,090 --> 00:01:03,900 Tim Lawless: we know are the most unaffordable, has seen that ratio 20 00:01:03,960 --> 00:01:08,639 Tim Lawless: fall from above 10 times. Simply meaning that your typical, 21 00:01:08,639 --> 00:01:11,849 Tim Lawless: your median household would have to spend 10 times their 22 00:01:11,879 --> 00:01:15,240 Tim Lawless: gross income to buy the median price dwelling. That's come 23 00:01:15,240 --> 00:01:18,330 Tim Lawless: down to below 10 now. It's around the high 8s. 24 00:01:19,230 --> 00:01:22,440 Tim Lawless: So that's good, but if you look at affordability in 25 00:01:22,440 --> 00:01:26,459 Tim Lawless: another measure like how much income is a household dedicating 26 00:01:26,459 --> 00:01:30,299 Tim Lawless: to servicing the debt or servicing a mortgage, that's risen 27 00:01:30,299 --> 00:01:33,330 Tim Lawless: to new record highs and the latest data we have 28 00:01:33,330 --> 00:01:35,610 Tim Lawless: is to March, and no doubt, it's increased even further 29 00:01:35,610 --> 00:01:38,818 Tim Lawless: from there. And then you've got rental affordability, and that's 30 00:01:39,150 --> 00:01:42,809 Tim Lawless: also blown out simply because we've seen such rapid rises 31 00:01:42,809 --> 00:01:47,279 Tim Lawless: in rents alongside pretty decent rises in incomes, but certainly 32 00:01:47,279 --> 00:01:49,710 Tim Lawless: not as much as what rents have risen. So a 33 00:01:49,710 --> 00:01:51,690 Tim Lawless: few different ways to cut it, but whatever way you 34 00:01:51,690 --> 00:01:55,980 Tim Lawless: look at housing, it's generally a fairly challenging affordability situation. 35 00:01:56,730 --> 00:01:59,820 Jennifer Duke: That sounds pretty painful for quite a few households, and 36 00:01:59,880 --> 00:02:03,480 Jennifer Duke: clearly supply is a really big issue in this space, particularly 37 00:02:03,480 --> 00:02:05,759 Jennifer Duke: in the capital cities. What have been some of the 38 00:02:05,760 --> 00:02:08,040 Jennifer Duke: issues that have led up to the situation where we 39 00:02:08,040 --> 00:02:10,709 Jennifer Duke: have such a low level of supply to that relative demand? 40 00:02:11,490 --> 00:02:14,370 Tim Lawless: Well, supply in one way, if you were to look 41 00:02:14,370 --> 00:02:16,709 Tim Lawless: at a graph at the moment on how many homes 42 00:02:16,710 --> 00:02:21,270 Tim Lawless: are being built, it's just moved through record highs. We're 43 00:02:21,270 --> 00:02:23,729 Tim Lawless: actually building a lot of homes at the moment, but 44 00:02:23,730 --> 00:02:26,640 Tim Lawless: the reality is there's not a lot coming in behind it. 45 00:02:26,669 --> 00:02:30,929 Tim Lawless: Dwelling approvals have plummeted since the end of the HomeBuilder 46 00:02:30,930 --> 00:02:35,490 Tim Lawless: grants back in March of 2021. So yeah, that's the 47 00:02:35,490 --> 00:02:37,799 Tim Lawless: real risk at the moment is that even though we're 48 00:02:37,799 --> 00:02:42,389 Tim Lawless: seeing this significant boom in construction activity that's been prolonged 49 00:02:42,389 --> 00:02:45,210 Tim Lawless: because it's run into a whole bunch of bottlenecks and 50 00:02:45,210 --> 00:02:49,350 Tim Lawless: supply chain constraints and materials and labour shortages, so it's 51 00:02:49,350 --> 00:02:53,790 Tim Lawless: been a real extended construction cycle, after this period of 52 00:02:53,790 --> 00:02:57,869 Tim Lawless: construction's completed, which is imminent, there's not a lot in 53 00:02:57,870 --> 00:03:00,240 Tim Lawless: the pipeline, and that's the real risk. If you look 54 00:03:00,240 --> 00:03:04,020 Tim Lawless: at some of the forecasts for housing supply, NHFIC (National Housing Finance and Investment Corporation), for example, 55 00:03:04,830 --> 00:03:08,250 Tim Lawless: estimate that the Australian housing market will be undersupplied all 56 00:03:08,250 --> 00:03:12,570 Tim Lawless: the way through to 2028. So it really comes simply 57 00:03:12,570 --> 00:03:16,440 Tim Lawless: back to very high levels of population growth at the moment, 58 00:03:16,529 --> 00:03:21,750 Tim Lawless: coupled with a relatively subdued pipeline of approvals in the wings. 59 00:03:22,350 --> 00:03:25,078 Jennifer Duke: So with that in mind, do you reckon the government's 60 00:03:25,080 --> 00:03:29,160 Jennifer Duke: newly announced national planning reform blueprint that's aimed at increasing 61 00:03:29,160 --> 00:03:30,749 Jennifer Duke: supply will make much of a difference? 62 00:03:31,440 --> 00:03:34,469 Tim Lawless: Well, if they can achieve it, absolutely. This is a 63 00:03:34,469 --> 00:03:38,970 Tim Lawless: pretty aspirational target, I think of 1,200,000 homes over a five- 64 00:03:38,970 --> 00:03:44,160 Tim Lawless: year period. But the reality is this target of 1,200,000 homes to be 65 00:03:44,309 --> 00:03:47,730 Tim Lawless: built over five years, doesn't kick off until July 2024. 66 00:03:47,730 --> 00:03:51,029 Tim Lawless: So it's nearly a year away, and it doesn't really 67 00:03:51,030 --> 00:03:54,359 Tim Lawless: solve the immediacy of this housing crisis that we have 68 00:03:54,480 --> 00:03:57,030 Tim Lawless: at the moment. Another way to look at it as 69 00:03:57,030 --> 00:04:02,040 Tim Lawless: well is if you look historically, we've never achieved building 70 00:04:02,220 --> 00:04:06,780 Tim Lawless: 1,200,000 homes in a five- year period. The closest Australia's 71 00:04:06,780 --> 00:04:09,299 Tim Lawless: ever got to it was in the five years ending 72 00:04:09,299 --> 00:04:15,360 Tim Lawless: December 2019, and we built nearly 1,100,000 homes. So to 73 00:04:15,360 --> 00:04:19,650 Tim Lawless: my point, this is pretty aspirational and such an aspirational 74 00:04:19,650 --> 00:04:23,849 Tim Lawless: target comes at a time when supply is almost moving 75 00:04:23,849 --> 00:04:26,580 Tim Lawless: from a standing start. Sure, you've got a lot of 76 00:04:26,580 --> 00:04:28,739 Tim Lawless: homes being built at the moment, but like we just 77 00:04:28,740 --> 00:04:32,640 Tim Lawless: talked about, the supply pipeline is really low, so we're 78 00:04:32,640 --> 00:04:35,190 Tim Lawless: going to have to start seeing approvals ramping up pretty 79 00:04:35,190 --> 00:04:38,279 Tim Lawless: quickly in order to achieve this target over five years. 80 00:04:38,760 --> 00:04:40,650 Jennifer Duke: And one of those things that we've been seeing a 81 00:04:40,650 --> 00:04:43,258 Jennifer Duke: lot over the past, I think 12 months or so 82 00:04:43,259 --> 00:04:46,859 Jennifer Duke: has been builders going under and some skills shortages and 83 00:04:46,859 --> 00:04:50,580 Jennifer Duke: issues in that space. This doesn't fix those problems. So 84 00:04:51,060 --> 00:04:52,620 Jennifer Duke: is this going to compound the issue, do you think? 85 00:04:53,160 --> 00:04:56,220 Tim Lawless: Well, potentially, and that's probably one of the biggest challenges 86 00:04:56,220 --> 00:04:59,849 Tim Lawless: here is we're once again trying to push a lot 87 00:04:59,849 --> 00:05:02,610 Tim Lawless: of supply into the market that we need, but we 88 00:05:02,610 --> 00:05:05,519 Tim Lawless: don't have the right foundations. And this is exactly the 89 00:05:06,629 --> 00:05:10,320 Tim Lawless: dilemma the market ran into after the HomeBuilder program, which 90 00:05:10,320 --> 00:05:13,380 Tim Lawless: was very popular. It was a good policy, I think, 91 00:05:13,589 --> 00:05:16,618 Tim Lawless: on paper at least, but it just ran into a 92 00:05:16,620 --> 00:05:20,489 Tim Lawless: huge amount of supply chain constraints. Not that we're going 93 00:05:20,490 --> 00:05:23,368 Tim Lawless: to run into another COVID, or hopefully not, over the 94 00:05:23,369 --> 00:05:23,909 Tim Lawless: coming five years. 95 00:05:23,909 --> 00:05:24,029 Jennifer Duke: Fingers crossed. 96 00:05:24,659 --> 00:05:29,220 Tim Lawless: Fingers crossed. Knock on wood. To your point, I think 97 00:05:29,220 --> 00:05:31,080 Tim Lawless: we need to be focusing a lot more on getting 98 00:05:31,080 --> 00:05:36,360 Tim Lawless: the foundations right and really getting a more significant skillset 99 00:05:36,420 --> 00:05:39,690 Tim Lawless: in place, which in itself takes a long time. You 100 00:05:39,690 --> 00:05:42,419 Tim Lawless: can import that skilled migration, but I think a much 101 00:05:42,450 --> 00:05:45,390 Tim Lawless: better way to do it, or a complimentary way would 102 00:05:45,390 --> 00:05:50,010 Tim Lawless: be to be really focusing on training and trades and 103 00:05:50,010 --> 00:05:52,409 Tim Lawless: getting people trained up locally, domestically. 104 00:05:52,860 --> 00:05:54,899 Jennifer Duke: Stay with me, Tim, we'll be back in a minute. 105 00:06:00,960 --> 00:06:03,690 Jennifer Duke: My guest this morning is Tim Lawless, Head of Research 106 00:06:03,690 --> 00:06:06,779 Jennifer Duke: for CoreLogic. There is another piece in there though, because 107 00:06:06,779 --> 00:06:09,420 Jennifer Duke: obviously supply is one-half of the equation. Do you think 108 00:06:09,420 --> 00:06:11,190 Jennifer Duke: they need to do a bit more about demand? 109 00:06:12,270 --> 00:06:14,219 Tim Lawless: Well, yeah. I'm not sure how much they talked about 110 00:06:14,219 --> 00:06:17,039 Tim Lawless: demand, the National Cabinet, I didn't see anything in the 111 00:06:17,039 --> 00:06:19,589 Tim Lawless: media, no doubt that we'll be seeing more coming out 112 00:06:19,589 --> 00:06:23,670 Tim Lawless: about it. But demand at the moment is really stemming 113 00:06:23,670 --> 00:06:26,609 Tim Lawless: from the rapid rate of overseas migration, and it looks 114 00:06:26,610 --> 00:06:29,609 Tim Lawless: like that's set to stay for some time. Even though 115 00:06:29,610 --> 00:06:32,309 Tim Lawless: we've probably already moved through the peak level of net 116 00:06:32,309 --> 00:06:38,190 Tim Lawless: overseas migration last financial year, the budget papers were forecasting 117 00:06:38,250 --> 00:06:41,160 Tim Lawless: net migration to remain well above average over the next 118 00:06:41,160 --> 00:06:44,159 Tim Lawless: five years. So if there's going to be a discussion 119 00:06:44,160 --> 00:06:47,609 Tim Lawless: around demand, it probably involves pulling back on the lever 120 00:06:47,610 --> 00:06:51,839 Tim Lawless: a little bit around net overseas migration or potentially really 121 00:06:51,839 --> 00:06:55,410 Tim Lawless: trying to ramp up the supply side, which is exactly 122 00:06:55,410 --> 00:06:58,469 Tim Lawless: what the National Cabinet focus was trying to deliver. 123 00:06:58,920 --> 00:07:01,859 Jennifer Duke: Definitely. And we're obviously not that far from Spring now, 124 00:07:01,860 --> 00:07:04,650 Jennifer Duke: which is of course peak real estate time. I think 125 00:07:04,650 --> 00:07:07,289 Jennifer Duke: you guys will be very, very busy. What are you expecting 126 00:07:07,290 --> 00:07:08,639 Jennifer Duke: to see in terms of listings? 127 00:07:09,660 --> 00:07:12,929 Tim Lawless: Well, we're already starting to see listings picking up, and 128 00:07:12,930 --> 00:07:15,360 Tim Lawless: this is really unusual for this time of the year. Normally, 129 00:07:15,360 --> 00:07:18,240 Tim Lawless: Winter is quite subdued for the flow of new listings 130 00:07:18,240 --> 00:07:21,300 Tim Lawless: coming on the market, but Winter to date has actually 131 00:07:21,300 --> 00:07:24,119 Tim Lawless: seen about a 13% lift in the number of new 132 00:07:24,120 --> 00:07:27,479 Tim Lawless: listings coming on the market. The long run average when 133 00:07:27,480 --> 00:07:30,449 Tim Lawless: you look at listings coming into the Australian market between 134 00:07:30,570 --> 00:07:34,800 Tim Lawless: Autumn and Winter is normally about a 5% drop. So 135 00:07:34,800 --> 00:07:38,309 Tim Lawless: to see a 13% rise in new listings now, I think 136 00:07:38,309 --> 00:07:41,190 Tim Lawless: signals that Spring and early Summer this year is going 137 00:07:41,190 --> 00:07:43,679 Tim Lawless: to be quite an active one. And of course, it 138 00:07:43,679 --> 00:07:47,070 Tim Lawless: comes after last year's Spring was a non-event. It was 139 00:07:47,070 --> 00:07:49,860 Tim Lawless: the first time ever we've seen the number of new 140 00:07:49,860 --> 00:07:51,780 Tim Lawless: listings coming on the market was lower than what it 141 00:07:51,780 --> 00:07:55,140 Tim Lawless: was in Winter. So finally, we're starting to see some 142 00:07:55,140 --> 00:07:58,679 Tim Lawless: more supply, at least available or advertised supply coming into 143 00:07:58,679 --> 00:08:02,009 Tim Lawless: the market, which it'll be really interesting to see if 144 00:08:02,009 --> 00:08:05,819 Tim Lawless: that's actually met with a commensurate level of demand because 145 00:08:05,820 --> 00:08:08,280 Tim Lawless: at the moment, demand is a little bit stifled. You've got 146 00:08:08,340 --> 00:08:12,390 Tim Lawless: sentiment really low, and that in itself makes people less 147 00:08:12,390 --> 00:08:14,820 Tim Lawless: willing to make a high commitment decision like buying a home. 148 00:08:15,150 --> 00:08:17,130 Tim Lawless: But you've also got the finance side of things still 149 00:08:17,130 --> 00:08:20,760 Tim Lawless: very tight, interest rates high, so serviceability is quite challenging 150 00:08:21,450 --> 00:08:24,329 Tim Lawless: as well. So chances are we will see a pretty 151 00:08:24,330 --> 00:08:27,090 Tim Lawless: decent uplift in the number of homes available for sale, 152 00:08:27,660 --> 00:08:29,730 Tim Lawless: but not as much of a rise in demand. And 153 00:08:29,730 --> 00:08:31,710 Tim Lawless: if that is the case, if I'm right about that, 154 00:08:32,040 --> 00:08:33,838 Tim Lawless: you'd have to think that's going to take some heat 155 00:08:33,870 --> 00:08:37,200 Tim Lawless: out of this recent upswing we've been seeing in housing prices. 156 00:08:37,559 --> 00:08:38,999 Jennifer Duke: That was going to be the next thing on my 157 00:08:39,000 --> 00:08:40,740 Jennifer Duke: mind is what do you reckon will happen to prices 158 00:08:40,740 --> 00:08:42,360 Jennifer Duke: for the rest of this year? Because you can't not 159 00:08:42,360 --> 00:08:45,208 Jennifer Duke: ask that question to anyone in real estate. Any big 160 00:08:45,210 --> 00:08:46,471 Jennifer Duke: forecasts that you have that you want to share? 161 00:08:46,471 --> 00:08:50,460 Tim Lawless: Well, we've already started to see the pace of growth 162 00:08:50,460 --> 00:08:53,790 Tim Lawless: slowing in some markets where listings have risen more materially, 163 00:08:53,790 --> 00:08:56,130 Tim Lawless: so Sydney and Melbourne are the best examples of that. 164 00:08:56,610 --> 00:09:00,390 Tim Lawless: Sydney's rate of growth has halved from between May, when 165 00:09:00,420 --> 00:09:04,110 Tim Lawless: values are rising at 1.8% month on month, that's already 166 00:09:04,110 --> 00:09:08,069 Tim Lawless: slipped back to 0.9%. So it's halved, and Sydney's seen 167 00:09:08,070 --> 00:09:10,590 Tim Lawless: listing numbers, total listings rise by a little bit more 168 00:09:10,590 --> 00:09:14,219 Tim Lawless: than 5% since May. So I think if we do 169 00:09:14,219 --> 00:09:16,738 Tim Lawless: start to see more supply, then yeah, arguably you will 170 00:09:16,740 --> 00:09:19,290 Tim Lawless: start to see the rate of growth easing off, probably 171 00:09:19,290 --> 00:09:21,900 Tim Lawless: still remaining positive. And if you look at most of 172 00:09:21,900 --> 00:09:26,460 Tim Lawless: the forecasts for housing markets, they're generally suggesting, say the 173 00:09:26,460 --> 00:09:29,370 Tim Lawless: combined capitals will be up 6% to 7% over the 174 00:09:29,550 --> 00:09:33,389 Tim Lawless: full calendar year. That in itself implies a slowdown through 175 00:09:33,389 --> 00:09:35,759 Tim Lawless: the second half of the year, which I would agree with. 176 00:09:36,690 --> 00:09:39,480 Jennifer Duke: And you've released a regional property report this week as 177 00:09:39,480 --> 00:09:42,120 Jennifer Duke: well. Can you talk us through how those regional areas 178 00:09:42,120 --> 00:09:45,270 Jennifer Duke: are responding to the rising rates that we've been seeing? 179 00:09:46,200 --> 00:09:49,049 Tim Lawless: Yeah, it's quite the mixed bag, and if you looked 180 00:09:49,049 --> 00:09:51,809 Tim Lawless: at regional markets through the height of the pandemic, of 181 00:09:51,809 --> 00:09:55,050 Tim Lawless: course they really stood out as the best performers, where 182 00:09:55,470 --> 00:09:58,260 Tim Lawless: now it seems to be completely the opposite of that. 183 00:09:58,290 --> 00:10:02,760 Tim Lawless: The capital cities are outperforming their regional counterparts. Some regional 184 00:10:02,760 --> 00:10:07,349 Tim Lawless: markets are still traveling backwards in terms of values, and most 185 00:10:07,349 --> 00:10:11,399 Tim Lawless: of those areas that remain quite soft for value growth 186 00:10:11,458 --> 00:10:13,380 Tim Lawless: tend to be the markets that were some of the 187 00:10:13,380 --> 00:10:16,770 Tim Lawless: most popular through the pandemic. So areas like the Southern 188 00:10:16,770 --> 00:10:19,800 Tim Lawless: Highlands just outside of Sydney would be a good example. 189 00:10:19,800 --> 00:10:22,500 Tim Lawless: Their value still down over the quarter, but they increased 190 00:10:22,500 --> 00:10:25,290 Tim Lawless: by about 60% through the upswing. 191 00:10:25,559 --> 00:10:25,618 Jennifer Duke: Wow. 192 00:10:25,830 --> 00:10:29,789 Tim Lawless: Yeah. Crazy. Byron Bay or the Richmond Tweed area, values 193 00:10:29,789 --> 00:10:32,790 Tim Lawless: there are already down 20% and only now just starting 194 00:10:32,790 --> 00:10:35,670 Tim Lawless: to stabilise. But it does look like some of the 195 00:10:35,670 --> 00:10:40,559 Tim Lawless: more commutable regional markets, areas like Wollongong or Newcastle, the 196 00:10:40,559 --> 00:10:43,590 Tim Lawless: Gold Coast, Sunshine Coast, are all moving back into some 197 00:10:43,590 --> 00:10:45,689 Tim Lawless: level of growth now. And then if you look at 198 00:10:45,690 --> 00:10:47,939 Tim Lawless: a little bit longer term, say the past 12 months, 199 00:10:48,240 --> 00:10:51,270 Tim Lawless: a lot of the rural markets that are generally quite 200 00:10:51,270 --> 00:10:54,540 Tim Lawless: affordable and a little bit more disconnected from the interest 201 00:10:54,540 --> 00:10:59,099 Tim Lawless: rate hiking cycle, areas like Mackay or Cairns or getting 202 00:10:59,099 --> 00:11:03,208 Tim Lawless: down to Bunbury and WA or Southeast South Australia have 203 00:11:03,210 --> 00:11:06,208 Tim Lawless: generally recorded positive growth even over the past 12 months 204 00:11:06,208 --> 00:11:08,280 Tim Lawless: despite this rapid rate hiking cycle. 205 00:11:09,120 --> 00:11:13,200 Jennifer Duke: That's amazing, isn't it really? You feel like you're expecting 206 00:11:13,260 --> 00:11:15,480 Jennifer Duke: people to be much more sensitive to the higher rates. 207 00:11:15,719 --> 00:11:17,490 Jennifer Duke: We do hear a lot about the mortgage cliff though, 208 00:11:17,490 --> 00:11:19,170 Jennifer Duke: and that that's still coming. Do you have a thought 209 00:11:19,170 --> 00:11:21,599 Jennifer Duke: on whether or not we're just yet to feel the 210 00:11:21,599 --> 00:11:22,710 Jennifer Duke: full brunt of the rates? 211 00:11:23,699 --> 00:11:27,120 Tim Lawless: I think that'll take a while. We've pretty much fallen 212 00:11:27,120 --> 00:11:30,929 Tim Lawless: off the cliff now. We've moved through the peak. So 213 00:11:30,929 --> 00:11:34,049 Tim Lawless: according to most of the bank reporting and the RBA, 214 00:11:34,380 --> 00:11:39,569 Tim Lawless: the peak in this fixed rate transition was July, June, July, August. 215 00:11:39,570 --> 00:11:42,510 Tim Lawless: So it just moved through it or moving through it 216 00:11:42,510 --> 00:11:44,640 Tim Lawless: at the moment. So I think it will take some 217 00:11:44,640 --> 00:11:47,760 Tim Lawless: time to see what the level of fallout is going 218 00:11:47,760 --> 00:11:51,330 Tim Lawless: to be. The official data or just looking at data 219 00:11:51,330 --> 00:11:56,219 Tim Lawless: on say, mortgage arrears, CBA just had their full year reporting, 220 00:11:56,219 --> 00:12:00,899 Tim Lawless: for example, they're still reporting really low levels of mortgage arrears. 221 00:12:00,960 --> 00:12:06,720 Tim Lawless: Like APRA was reporting 99.5% of all borrowers were on 222 00:12:06,720 --> 00:12:10,650 Tim Lawless: track with their mortgage repayments. So there's yet to really 223 00:12:10,650 --> 00:12:13,499 Tim Lawless: be any major signs of fallout, but I think we'd 224 00:12:13,500 --> 00:12:15,660 Tim Lawless: be pretty naive to think there's not going to be 225 00:12:15,660 --> 00:12:18,720 Tim Lawless: a lift in mortgage arrears. I think everyone is expecting 226 00:12:18,720 --> 00:12:22,078 Tim Lawless: that to happen. It's really how much is it going 227 00:12:22,080 --> 00:12:23,910 Tim Lawless: to rise and when is it going to start to 228 00:12:23,910 --> 00:12:27,449 Tim Lawless: show up? I think the good news for borrowers is 229 00:12:27,750 --> 00:12:31,889 Tim Lawless: everybody expects unemployment to remain pretty tight, even though labour 230 00:12:31,889 --> 00:12:35,639 Tim Lawless: markets will loosen. As long as labour markets don't implode, 231 00:12:35,639 --> 00:12:37,380 Tim Lawless: I think most people that want a job will have 232 00:12:37,380 --> 00:12:39,660 Tim Lawless: one and stay on track with their repayments, but it 233 00:12:39,660 --> 00:12:43,559 Tim Lawless: does imply a really pretty significant pullback in discretionary spending 234 00:12:43,559 --> 00:12:44,490 Tim Lawless: in order to do that. 235 00:12:45,090 --> 00:12:47,069 Jennifer Duke: Tim, thank you for talking to Fear and Greed. 236 00:12:47,700 --> 00:12:50,070 Tim Lawless: Absolute pleasure, Jennifer. Thanks for the invitation. 237 00:12:50,490 --> 00:12:53,189 Jennifer Duke: And that was Tim Lawless, Head of Research for CoreLogic. 238 00:12:53,549 --> 00:12:56,098 Jennifer Duke: This is the Fear and Greed Business Interview. Join us 239 00:12:56,100 --> 00:12:58,530 Jennifer Duke: every morning for the full episode of Fear and Greed, 240 00:12:58,590 --> 00:13:02,790 Jennifer Duke: Australia's best business podcast. I'm Jennifer Duke, economics correspondent at 241 00:13:02,790 --> 00:13:05,279 Jennifer Duke: Capital Brief, and filling in for Sean Aylmer. Have a 242 00:13:05,280 --> 00:13:05,880 Jennifer Duke: great day.