Speaker 1: Hello, and welcome to the Australian's Money Puzzle podcast. I'm
Speaker 1: James Kirby. Welcome aboard everybody. One of the big questions
Speaker 1: this year, especially for property investors, apart from would they
Speaker 1: cut rates, which they have and this teeny weenie cut
Speaker 1: has seems to have made a sort of an outsized
Speaker 1: difference to the tempo in the market, which we'll talk
Speaker 1: about later in the show. But also there was the
Speaker 1: issue of whether the stricken property market of Melbourne, the
Speaker 1: second biggest city but the weakest market by far, would
Speaker 1: respond if you like, to this improved tempo. And guess what,
Speaker 1: over the month of February it was the outstanding performer
Speaker 1: in the mainland capitals. That's only one month, it's only
Speaker 1: less than one percent. Let's not get too excited about it.
Speaker 1: But nonetheless it's certainly a sign of life. I want
Speaker 1: to take a look at that. I'm alsoly going to
Speaker 1: take some look at some questions that came in from listeners.
Speaker 1: Is one asking specifically about kirenskirents, trying to pronounce it properly,
Speaker 1: and we'll have a look at that. And also is
Speaker 1: this the golden moment for the first home buyer. I
Speaker 1: think it is. Let's find out from our guest today.
Speaker 1: Regular guest, it's Eliza Own from Core Logic. Hi, Eliza,
Speaker 1: how are you hey?
Speaker 2: James? Yeah, you're going really well. Great to be here.
Speaker 2: As I was saying to you before, I'm good overall.
Speaker 2: But I'm pretty surprised at the February numbers and the
Speaker 2: impact of what appears to be the impact of the
Speaker 2: right cut.
Speaker 1: In that the market was more of tempo following this
Speaker 1: was the first cut in four years, I suppose, So really,
Speaker 1: I suppose it's more a response to the potential change
Speaker 1: in direction operates rather than that particular cut, which is
Speaker 1: pretty small in itself. Is that what you're thinking?
Speaker 2: Absolutely so. As you may know, we have a daily
Speaker 2: home value in there which shows you how obsessed Australians
Speaker 2: are with property, and we follow a rolling twenty eight
Speaker 2: day change as well as the calendar month changed, so
Speaker 2: that gives us a sense of how the index is
Speaker 2: performing throughout the course of the month. And it was
Speaker 2: very clear that for some states the growth trend really
Speaker 2: improved about a week before the rate cut, and I
Speaker 2: think by that time buyers in the market may have
Speaker 2: been confident enough to put forward stronger offers for property
Speaker 2: in the knowledge that they would have access to more
Speaker 2: finance in the coming weeks. So I think, as you say,
Speaker 2: the fact that we were held for so long, the
Speaker 2: fact that consumers really started paying a lot of attention
Speaker 2: to Intery's rates and inflation and where the market was going,
Speaker 2: that the anticipation was enough to pull up the market.
Speaker 2: It to coincide with the month of the rate cut.
Speaker 1: Yeah, so it's as much about not that the mortgages
Speaker 1: dropped so much, but borrowing capacity. Yeah, it gets a kick.
Speaker 1: I think it was twelve thousand for the average Australian
Speaker 1: and the average mortgage, but I suppose for the average
Speaker 1: investor's going to be much more than that. Is it
Speaker 1: twenty thirty thousand whatever.
Speaker 2: The average investor in the average high income earner, right,
Speaker 2: And I think we've talked before about how the high
Speaker 2: end of the market is often the bellwether, the first mover,
Speaker 2: the strongest respondent to a change in financial conditions. And
Speaker 2: that's another trend that came through the numbers this month
Speaker 2: is that it was the top twenty five percent of
Speaker 2: home values that had the strongest response in the month
Speaker 2: of fb.
Speaker 1: Okay so it's the top of the market, is it
Speaker 1: that responded? Okay, that's right, Yeah, across the board.
Speaker 2: Yeah, so the top of the market was still showing
Speaker 2: value declines over the three months to Feb but it
Speaker 2: had a really strong pull up, if that makes sense.
Speaker 2: So in Sydney and Melbourne, for example, the top twenty
Speaker 2: five percent of home values in those cities, the pace
Speaker 2: of three month decline pulled up by a full one
Speaker 2: hundred basis points in feb.
Speaker 1: When you say it pulled up, sorry, just you might
Speaker 1: explain to people what do you mean by that.
Speaker 2: So, for example, in the three months to Jan, the
Speaker 2: top twenty five percent of Melbourne home values had a
Speaker 2: decline of two point six percent. By Feb that was
Speaker 2: one point six percent. So it's a really strong it's
Speaker 2: not quite in growth mode just yet, but on a
Speaker 2: three month basis, but it was a really strong inflection point.
Speaker 1: Yeah, change of direction, right, okay, very interesting. Yeah, And
Speaker 1: the obvious question is for anyone investors or homeowners, they're
Speaker 1: sort of underlying not theory, but underlying argument out there
Speaker 1: that yeah, there's a rate card, but this time this
Speaker 1: is not this is not the same as rates going
Speaker 1: to zero. This is not a repeat of all that
Speaker 1: is sort of what they call the capitalization of lower rates.
Speaker 1: This is routine, and prices are so elevated, that is,
Speaker 1: our property prices are so expensive on any measure, historical
Speaker 1: or international, that it won't make much difference. What do
Speaker 1: you say to that.
Speaker 2: I would say that the market is highly varied. We
Speaker 2: saw that before the rate cut. We saw that through
Speaker 2: the pandemic, which exacerbated these big changes in demographics interstate movements.
Speaker 2: There are some markets where rate cuts have already been
Speaker 2: priced in, and when values are so high relative to
Speaker 2: what people can afford to buy or people would be
Speaker 2: interested to pay, that rate cuts might not have much
Speaker 2: of an impact. There are other markets, though, which you've
Speaker 2: alluded to, that have had a strong response to rate
Speaker 2: rises and therefore would have a strong response to rate cuts.
Speaker 2: So we actually did some modeling ahead of the rate
Speaker 2: cut a few months back that looked at which markets
Speaker 2: historically are most affected by movements in interest rates, and
Speaker 2: what we found is that it tends to be higher
Speaker 2: end markets of Sydney and Melbourne, so Likeheart SA three
Speaker 2: region area, so in the inner west of Sydney. Based
Speaker 2: on modeling of rate movements through the twenty ten that
Speaker 2: was estimated to have these strongest response to interest rate movements,
Speaker 2: and sure enough, that seems to be the inflection point
Speaker 2: that we've seen playing out across the market in fab
Speaker 2: So I think there are markets that are highly discounted
Speaker 2: and a rate cut is perhaps the kickstart of the
Speaker 2: next phase of the cycle for those.
Speaker 1: Yeah, okay, And when you say it's interesting, So when
Speaker 1: you say top of the market, I must remember this.
Speaker 1: When you say top of the market, I think of
Speaker 1: like luxury houses Sydney, But actually you just mean the
Speaker 1: top twenty five percent of all property price range.
Speaker 2: Yes, yes, that's very indistinction.
Speaker 1: It's much more sort of inclusive than it might sound.
Speaker 2: Absolutely, so you're looking more around maybe the million dollar
Speaker 2: price point for the combined capital cities market for dwellings overall.
Speaker 1: Okay, very interesting. All right, now, that's probably a good
Speaker 1: time to segue into the little lead you gave me
Speaker 1: there at the end, which was the discounted markets that
Speaker 1: might change direction. And the one that stands out is Melbourne.
Speaker 1: Let's talk about that. Let's take a break and come
Speaker 1: back to that. Hello, Welcome back to The Australian's Money positive.
Speaker 1: James kirkby talking to Eliza Owen of Core Logic regular
Speaker 1: on the show Helicopter Review of Property Markets. Since I
Speaker 1: talked to her last we've had interest rate cut, probably
Speaker 1: the most important significant thing in the markets, and always
Speaker 1: obviously a changing market with lots of things going on,
Speaker 1: since that Perth has perhaps stopped out, and the sense
Speaker 1: that Melbourne may turn Okay, here's the facts. Melbourne is
Speaker 1: the worst market in the country. It's the weakest. It
Speaker 1: has the almost any measure. I could pull up five
Speaker 1: or six measures that mix that point to you, folks,
Speaker 1: and I'm sure you listen know this already. Secondly, it
Speaker 1: has the particular resistance, if you like, or challenge that
Speaker 1: it has a state government which has chosen to zone
Speaker 1: in on property for tax collection. It has ten separate
Speaker 1: state based property taxes, two of which are brand new
Speaker 1: or introduced in January. That's the context, but the news
Speaker 1: is tell us what happened in February in relation to
Speaker 1: Melbourne and how it might be significant.
Speaker 2: Eliza, So, Melbourne had the strongest monthly increase, alongside Hobart,
Speaker 2: which has been another weak market. The strongest monthly increase
Speaker 2: of the capital cities in the month of feb posting
Speaker 2: one point four percent increase. We saw the really strong
Speaker 2: performance the mid size capitals of Brisbane, Adelaide and Perth
Speaker 2: actually see a relatively low, steady growth rate in the month.
Speaker 2: But again when you can textualize that with longer term performance,
Speaker 2: Perth is up fourteen percent over the year, Melbourne is
Speaker 2: down three percent over the year. So those results potentially
Speaker 2: show a bit of an inflection point in the.
Speaker 1: Market, a bit of an inflection point. Well, is it
Speaker 1: an inflection point.
Speaker 2: Or maybe like a seesaw dynamic ride. So it's those
Speaker 2: markets like Adelaide, Brisbane and Perth are potentially the ones
Speaker 2: because they had such little response to the sharp increase
Speaker 2: in interest rates. Could be the markets where rate cuts
Speaker 2: were already priced in, could be the markets that are
Speaker 2: not as responsive to rate cuts, whereas Melbourne's kind of
Speaker 2: the opposite. As you say, there's a lot of structural
Speaker 2: factors like taxes that may have kept the market low.
Speaker 2: We know from a supply perspective, Victoria has supplied more
Speaker 2: dwellings than any other state and territory in the past
Speaker 2: fifteen years. It's just got more.
Speaker 1: Yeah, it's got supply, which more states don't.
Speaker 2: Yeah, exactly, and so that's helped to keep prices low
Speaker 2: as well. But now that means that market values across
Speaker 2: Melbourne are about six percent below they're high in twenty
Speaker 2: twenty two, and that includes the zero point four percent
Speaker 2: lift in feb So it's kind of discounted, right, And
Speaker 2: of course with property cycles, you want to look long term.
Speaker 2: It's a big city, it's a fabulous city, and the
Speaker 2: fact that prices are lower might mean that they've come
Speaker 2: low enough that people are willing to buy in again.
Speaker 1: Yeah, do you track investor? Would I know it's only
Speaker 1: a month, but were the investors anymore? Because I read
Speaker 1: where extraordinary stuff this from? Maybe this is Central Bureau
Speaker 1: Statistics that one in three first home this is the
Speaker 1: beautiful patch for the first home buyer because rates are
Speaker 1: dropping and prices are in some cities by their standards reasonable,
Speaker 1: I only mean reasonable in the context of previous years.
Speaker 1: So Melbourne is down, and even Sydney was week over
Speaker 1: January February, so over December January, so there was something
Speaker 1: of an opportunity for first home buus that that was
Speaker 1: better than it had been previously. So the point I'm
Speaker 1: driving out here is the ABS numbers show that one
Speaker 1: in three first time buyers who bought a house across
Speaker 1: the nation bought the house in Melbourne in recent times.
Speaker 1: That tells us that Melbourne activity was probably all first
Speaker 1: tome virus, was it, And the investors in there.
Speaker 2: Not all first home buyers, but investors definitely make up
Speaker 2: a lower portion of the market in Victoria and first
Speaker 2: home buyers make up a higher portion of the market.
Speaker 2: So looking at the states and of this data right
Speaker 2: it's lagged. It only goes to the end of December,
Speaker 2: and the ABS is stopped producing on a monthly basis,
Speaker 2: they're producing on a quarterly basis. Now there's been a
Speaker 2: lot of changes at the APS, I think related to resourcing,
Speaker 2: which means a lot of important data sets on housing
Speaker 2: that we lovey Yeah, then not as easily or frequently available,
Speaker 2: So I mean that has implications for our analysis in itself.
Speaker 2: But anyway, I digress of the housing la We see
Speaker 2: that in Victoria about thirty percent of new lending for
Speaker 2: property purchases is first home buyers, so that's the highest
Speaker 2: share of the states. It goes down to Queensland where
Speaker 2: first home by lending makes up a fifth of new
Speaker 2: lending secured. So and we've also seen investors sort of
Speaker 2: pivot more towards Queensland, WA South Australia, where capital growth
Speaker 2: trends have been really strong. So yeah, Victoria is the
Speaker 2: first home buyer state. It is the state where people
Speaker 2: can realize the Australian dream of owning their own home.
Speaker 2: Not that there aren't affordability challenges there. It's not like
Speaker 2: we're talking about buying into the Inneriesta or anything like that,
Speaker 2: but it's definitely it appears to have more space for
Speaker 2: first home buyers.
Speaker 1: So I suppose a million dollar question is does this
Speaker 1: turn in Victoria bring the investors back? No evidence? Hey,
Speaker 1: then you're saying the abs not going to get evidence
Speaker 1: from them for a long time.
Speaker 2: Really, Yeah, there's not much indication. I had a client
Speaker 2: ask about this the other day actually, because anecdotally we've
Speaker 2: heard that there are pockets of the market where prices
Speaker 2: are low enough and yields are high enough that investors
Speaker 2: are showing interest again, so I, yeah, I will be
Speaker 2: doing a little bit of research around that. But as
Speaker 2: you say, the data on it might be a little
Speaker 2: bit sparse.
Speaker 1: Okay, So I would imagine from that listeners. There's two things, really,
Speaker 1: isn't there. One is the first home buyer. There's a
Speaker 1: there's clearly opportunity there for them. They're clearly responding to
Speaker 1: the discount that's in Melbourne. The issue is whether the
Speaker 1: investors will roll in. And I imagine I don't know, Eliza,
Speaker 1: but I imagine the swing factor may well be the taxes,
Speaker 1: the sense that the tax regime in the state is
Speaker 1: much more challenging than say Queensland.
Speaker 2: Yeah, potentially, potentially. I think that if you have higher
Speaker 2: holding costs, it makes sense that your prices need to
Speaker 2: come down further to buy in. There's something worth noting
Speaker 2: around what a first home buyer actually looks at versus
Speaker 2: what an investor looks at. So they might not be
Speaker 2: competing for exactly the same property. But if you have
Speaker 2: more properties taken up by investors, then I guess overall
Speaker 2: there's less property on the market for first home buyers.
Speaker 2: And I think that's a bit of a black box
Speaker 2: that warrant some research as well.
Speaker 1: Okay, just what would be the natural state of affairs
Speaker 1: in Victoria If roughly thirty percent it's first toime buyer,
Speaker 1: what would naturally be lower?
Speaker 2: No, not necessarily. So Victoria has pretty consistently held the
Speaker 2: mantle of highest share of first term buyer finance for
Speaker 2: a long time. And we know as well that the
Speaker 2: market has really been performing. Oh sorry, the market has
Speaker 2: been underperforming other states and territories really since the start
Speaker 2: of the pandemic. So yeah, it's a bit more of
Speaker 2: a steady state. I would say investor lending has definitely
Speaker 2: become more subdued than what we're seeing at a national level.
Speaker 2: So there's this short series around the number of investor
Speaker 2: loans from September twenty nineteen to December last year that
Speaker 2: shows growth in investment loans of about sixty percent nationally
Speaker 2: but only twenty percent in Victoria.
Speaker 1: So I think again, they're running three times harder. Nationwide
Speaker 1: investor activity is three times what it is in Victoria, right,
Speaker 1: which would mean that Victorian investment activity could triple to
Speaker 1: become normal. Am I oversimplifying? Is that true?
Speaker 2: It might be, yeah, because it's the rate of growth
Speaker 2: that's been higher, not the overall all.
Speaker 1: Right, And just while we're on the nationwide, the investor
Speaker 1: activity in the property market upper down.
Speaker 2: In the December quarter, there was a dip, so there
Speaker 2: was a four point five percent dip in the number
Speaker 2: of investment loans cured for property purchases in the December quarter.
Speaker 2: But this is coming off a very strong year of
Speaker 2: investor activity, so it's up thirteen percent year on year.
Speaker 2: And for the past few years investors have generally comprised
Speaker 2: more of the market, but it's been pivoting more to
Speaker 2: high capital growth opportunities. So potentially areas or well we
Speaker 2: can again we can see it in the data, areas
Speaker 2: like Western Australia, Queensland and South Australia.
Speaker 1: Okay, So one of the things that's really intriguing will
Speaker 1: be if there is a new sort of disposition among
Speaker 1: Australian property investors to invest inter state and if they
Speaker 1: did were rewarded so by moving into wa when it
Speaker 1: was at the start of the cycle, or even parts
Speaker 1: of Queensland, then you'd imagine that trend could continue with Victoria.
Speaker 1: All remains to be seen, Okay, terrific. What we'll do
Speaker 1: is we take a break and we've got some very
Speaker 1: appropriate listener questions for a Liza. We'll be back in
Speaker 1: a moment. Hello and welcome back to the Australians Money Puzzle.
Speaker 1: Eliza owned joins me from Core Logic, regular on the show.
Speaker 1: Always great to talk about the wider market. Think talk
Speaker 1: about a finger on the pulse, folks, Absolutely, absolutely absolutely
Speaker 1: on the pulse. She can tell you what's happening in
Speaker 1: the national property market on a daily basis, if you
Speaker 1: don't mind to the extent that would be useful to you.
Speaker 1: I can't get any more fine than that. I can
Speaker 1: realize it by the hour that would be the next one.
Speaker 2: Do you have that?
Speaker 1: Well, the ABS is slowing down, you're speeding up anyway,
Speaker 1: Ryan or I na? And Hi? Ryan, he says, would
Speaker 1: you be able please tell me how you think the
Speaker 1: property market and Karens will perform over the next twelve months. Okay,
Speaker 1: there you are tell us about Karens. We all, many
Speaker 1: of us know it because we arrive in the airport
Speaker 1: and go somewhere and go back out again. So at
Speaker 1: Tala's well known it seems awfully prosperous and always getting
Speaker 1: bigger and sparkling Newtown in many ways compared to what
Speaker 1: I saw it first a long time ago. That's the
Speaker 1: property market. I up there.
Speaker 2: Yeah, Hi Ryan, great question. So you've asked what I
Speaker 2: think about the market for the next twelve months, and
Speaker 2: just to qualify, there is a lot of uncertainty around
Speaker 2: where housing markets will go in the next twelve months.
Speaker 2: But for this market, I think the big theme of
Speaker 2: the property market seems to be it's highly diverse, and
Speaker 2: you need to know the distinction between the markets that
Speaker 2: have already had their rate cuts priced in that have
Speaker 2: continued to grow strongly and therefore might not be as
Speaker 2: impacted by rate cuts over the course of the year,
Speaker 2: versus those that are coming off a low base and
Speaker 2: will have a strong response. I think Cans is in
Speaker 2: the former camp. So growth in this market over the
Speaker 2: past five years has been fifty percent, and that includes
Speaker 2: six point seven percent uplift in the past twelve months.
Speaker 2: When we look ahead to the next twelve months, it's
Speaker 2: fair to say that even with rate cuts on the horizon,
Speaker 2: this market has lost a lot of its affordability advantage
Speaker 2: and we're seeing a slow down in momentum. So if
Speaker 2: I look at the quarterly growth rate, that's gotten slower
Speaker 2: and continued to slow down even in the month of
Speaker 2: feb For example, if we look to a recent high
Speaker 2: in the quarterly growth rate that was a two point
Speaker 2: six percent uplift in the three months to October of
Speaker 2: twenty twenty four two point six percent, so that slowed
Speaker 2: to a zero point eight percent rise in the three
Speaker 2: months to February twenty twenty five. I think this market
Speaker 2: might be on the path to flattening out in the
Speaker 2: short term. As I said, property is a long term game.
Speaker 2: As you said, Cans is a growing, thriving region. I
Speaker 2: think in the short term it's maybe a little overpriced.
Speaker 1: Okay, I hope that's useful to you, right. One thing
Speaker 1: about picking out a town like that, I wonder I
Speaker 1: was talking about interstate investing and how investors will be
Speaker 1: prepared to invest in other places once we take out
Speaker 1: the capitals. Right, So we'll assume that someone in Sydney
Speaker 1: will be prepared to buy in Atlete, then somebody in Perth
Speaker 1: will be prepared to buy in Hobart, et cetera. Is
Speaker 1: there are there towns outside of the mainland capitals that
Speaker 1: emerge or stand out in any fashion, as Beacon Zivy
Speaker 1: like for interstate investing, do you know.
Speaker 2: At the moment the fastest performer seems to be townsful
Speaker 2: in Queensland or the fastest performers So values there have
Speaker 2: risen twenty four percent over the year, so and again
Speaker 2: you sort of have to question, well, does that mean
Speaker 2: it can actually go another twenty five percent in twenty
Speaker 2: twenty five. Probably not, but it's a relatively affordable market.
Speaker 2: It's got some support from Army relocation programs, so you've
Speaker 2: got to be to the population there. And I think
Speaker 2: because areas like Southeast Queensland have become so expensive, it
Speaker 2: creates this spillover effective people looking for the next most
Speaker 2: affordable opportunity which can support growth in areas like White Bay,
Speaker 2: Mackay and even it appears up to Townsville.
Speaker 1: Geez, twenty four percent in a year in Townsville.
Speaker 2: Coming off a low base. So the medium value there
Speaker 2: is currently sitting at about five hundred and thirty thousand.
Speaker 2: But you know, yeah, again for locals, that's going to
Speaker 2: be quite a price shock.
Speaker 1: That's going to be quite a piece of news. Twenty
Speaker 1: four percent in a year, that's spectacular. Okay, all right,
Speaker 1: now question from Sally, which Eliza is going to dock
Speaker 1: And that's completely understanding this since he's a property researcher
Speaker 1: in the sense of property prices and action rather than
Speaker 1: specific issues. So I've drafted in James Gerard, our friend
Speaker 1: from finance advisor dot com dotu to answer this, Sally says,
Speaker 1: my husband and I bought a land and built a
Speaker 1: duplex for investment, with most of the cost borrow from
Speaker 1: the bank. My annual income is substantially less than my partners. Okay.
Speaker 1: Rather than having a joint ownership of the two properties,
Speaker 1: I would think that it would be financially prudent to
Speaker 1: assign the ownership such that my spouse and I w
Speaker 1: e Jonah house. This way we could look to plan
Speaker 1: our finances better, such as putting extra cash and offsets, etc.
Speaker 1: Does that sound right? And would you know how complex
Speaker 1: the process of changing the property ownership is for couples
Speaker 1: in this situation? Okay? Number one, We do not advise Sally.
Speaker 1: This is not advice information only, however, as a broad
Speaker 1: observation for all the Sally's out there in similar situations
Speaker 1: confronted with similar dilemmas, James Gerard says, the logical sound
Speaker 1: focus extra payment on the lower income is duplex and
Speaker 1: maximize tax deductibility on the duplex one by the high
Speaker 1: income spouse. That would seem to be entirely logical. In
Speaker 1: other words, from a tax perspective, negatively geared properties suit
Speaker 1: high incomerners, while cash flow positive properties suit low income uners.
Speaker 1: That's really interesting. Actually, thank you James. There are a
Speaker 1: point that wasn't really made very clearly to us before.
Speaker 1: And James says tax and legal advice should be obtained
Speaker 1: regarding what when to do the transfer. That's a fair
Speaker 1: enough point too. Okay, very good, So, Eliza, it looks like,
Speaker 1: more broadly, the Australian residential property market got a bigger
Speaker 1: bounce than you would have thought with the recod Are
Speaker 1: you working on the assumption there will be more records soon?
Speaker 2: Yes? I think inflation does appear to be consistently coming down,
Speaker 2: despite the monthly result being a little accelerating a little.
Speaker 2: Even in our housing stats, we're seeing qual Logic's Rent
Speaker 2: value index continue to show a slow down in growth.
Speaker 2: That's a indicated for the rent component of CPI.
Speaker 1: Oh, yes, that rent growth is slowing.
Speaker 2: Yes, yeah, so that's down a four point one percent
Speaker 2: for the year nationally, and that's the lowest annual increase
Speaker 2: since early twenty twenty one. So we're really the pre
Speaker 2: COVID historic average would be about a two point one
Speaker 2: percent growth rate. We're not quite there yet, but it's
Speaker 2: going in that direction. And the labor market, the unemployment
Speaker 2: rate is still very low, but there are other signs
Speaker 2: of slowing wages growth. Bad news, but good news for inflation.
Speaker 2: And it seems that a lot of the bank economists
Speaker 2: expect there could be at least two more rate cuts
Speaker 2: over the course of twenty twenty five. Ultimately that would
Speaker 2: support the market and I think bring more buyers in.
Speaker 1: Okay, interesting about the rent growth, so nothing basically nothing
Speaker 1: happened in rent growth for years and years that did nothing,
Speaker 1: and then bang covid it jumped into having done two
Speaker 1: percent or less year after year. Certainly it did ten percent,
Speaker 1: didn't it double figures in a year and did that
Speaker 1: for a few years, and hence we kind across we
Speaker 1: had a very I would just say, tice rental market
Speaker 1: with a lot of stresses. And that's cooling down now
Speaker 1: and it's back down to four percent.
Speaker 2: Yeah, and there are markets where that slow down is
Speaker 2: even more evident, like if you look at the unit
Speaker 2: rent stream of Brisbane, Melbourne, Sydney, they were all posting
Speaker 2: double digit increases in unit rents early twenty twenty three
Speaker 2: for those cities that slowed down to about three percent,
Speaker 2: and for Sydney growth is at two point six percent
Speaker 2: for the year, so that's pretty much back in line
Speaker 2: with its pre COVID growth rate.
Speaker 1: Yeah, and it's also kind of more or less back
Speaker 1: in land with inflation. So basically you're just kind of, yeah,
Speaker 1: you're just kind of peddling along with the rent basically
Speaker 1: goes along with inflation, and Steven stephens.
Speaker 2: The pace of growth, it's still much higher. You know,
Speaker 2: we're not talking about falling rent necessarily. It's it's that
Speaker 2: the growth is stettying at a much higher base than
Speaker 2: what we would have seen pre COVID.
Speaker 1: Very interesting, Okay, terrific. Well look, thank you very much, Eliza.
Speaker 1: Always good to talk to you.
Speaker 2: Yeah, thanks for having me. Good chat.
Speaker 1: That was Eliza Owen from Core Logic Research on the
Speaker 1: national market. Terrific As always keep that in mind, folks.
Speaker 1: Interesting about the rents slowing down, you got to work
Speaker 1: that into your numbers. Also interesting about the market getting
Speaker 1: up more of a lift than we might have expected.
Speaker 1: And I think very important that it's the top end,
Speaker 1: and by the top end we mean the top twenty
Speaker 1: five percent of all properties. Okay, terrific, Thank you very much.
Speaker 1: Let's have some more correspondents the money puzzle at the
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