1 00:00:00,240 --> 00:00:04,280 Speaker 1: Talk about first home buyers because Domain's latest First home 2 00:00:04,320 --> 00:00:07,920 Speaker 1: Buyer report has been well, it's been released and revealed 3 00:00:07,920 --> 00:00:11,080 Speaker 1: how Aussies can get now get into their new property 4 00:00:11,160 --> 00:00:13,520 Speaker 1: or into a new home two months earlier. But there's 5 00:00:13,520 --> 00:00:15,640 Speaker 1: a bit of a catch apparently. The report says that 6 00:00:16,000 --> 00:00:19,080 Speaker 1: time to save for a twenty percent deposit in Darwin 7 00:00:19,120 --> 00:00:21,720 Speaker 1: for an entry price home for a couple age twenty 8 00:00:21,720 --> 00:00:24,759 Speaker 1: five to thirty four for a house is three years 9 00:00:24,800 --> 00:00:28,040 Speaker 1: and seven months and two years and three months for 10 00:00:28,120 --> 00:00:30,520 Speaker 1: a unus. Now joining me on the line to break 11 00:00:30,520 --> 00:00:33,040 Speaker 1: this all down a bit further is Domain's chief of 12 00:00:33,240 --> 00:00:36,360 Speaker 1: Research and Economics, doctor Nicola Powell. 13 00:00:36,520 --> 00:00:39,800 Speaker 2: Good morning to you, very good morning. 14 00:00:39,680 --> 00:00:43,600 Speaker 1: Thanks so much, sorry to keep you waiting this morning. Now, Nicola, 15 00:00:43,760 --> 00:00:45,720 Speaker 1: what did the latest report find? 16 00:00:47,200 --> 00:00:49,400 Speaker 2: Look, there was a catch? Look, I always think there 17 00:00:49,440 --> 00:00:51,319 Speaker 2: is always seems to be a catch, doesn't there when 18 00:00:51,880 --> 00:00:55,320 Speaker 2: you know with absolutely and look, we know that it 19 00:00:55,400 --> 00:00:57,520 Speaker 2: is an emotional and challenging journey when it comes to 20 00:00:57,520 --> 00:01:00,760 Speaker 2: buying your first home and you know there is saving 21 00:01:00,760 --> 00:01:03,080 Speaker 2: that lump sum deposit, which we know is that first 22 00:01:03,200 --> 00:01:06,000 Speaker 2: really big financial hurdle that first home buyers are trying 23 00:01:06,000 --> 00:01:08,880 Speaker 2: to achieve. And what this report does is it actually 24 00:01:08,920 --> 00:01:11,679 Speaker 2: calculates the time it takes to say that all important 25 00:01:11,680 --> 00:01:15,480 Speaker 2: twenty percent deposit. And we're focused on entry priced houses 26 00:01:15,520 --> 00:01:18,400 Speaker 2: because this meets much more in line with a first 27 00:01:18,400 --> 00:01:21,240 Speaker 2: home buyer budget. And what we found in Darwin it 28 00:01:21,280 --> 00:01:23,520 Speaker 2: takes three years and seven months to save for an 29 00:01:23,640 --> 00:01:26,440 Speaker 2: entry house deposit, two years three months to save for 30 00:01:26,480 --> 00:01:30,080 Speaker 2: an entry units deposit. But this is actually quicker compared 31 00:01:30,120 --> 00:01:32,840 Speaker 2: to this time last year. For entry houses it's down 32 00:01:32,880 --> 00:01:35,639 Speaker 2: by one month, and the entry unit it's down units 33 00:01:35,680 --> 00:01:39,400 Speaker 2: it's down by three months. And the thing for Darwin, 34 00:01:39,440 --> 00:01:42,560 Speaker 2: though Darwin is a raceway for home ownership compared to 35 00:01:42,600 --> 00:01:45,760 Speaker 2: other capital cities, it roally holds the TCE hoole. Yeah, 36 00:01:45,880 --> 00:01:49,080 Speaker 2: how is the title for the fastest saving time out 37 00:01:49,120 --> 00:01:51,880 Speaker 2: of all of our capital cities. And we benchmark this. 38 00:01:52,000 --> 00:01:54,360 Speaker 2: We use the average wage of each of our capital city, 39 00:01:54,400 --> 00:01:57,120 Speaker 2: which is also different, the entry price point, which is 40 00:01:57,160 --> 00:01:59,280 Speaker 2: also different across the cities, and then we do a 41 00:01:59,280 --> 00:02:02,720 Speaker 2: model that basically calculates if I save x amount, how 42 00:02:02,960 --> 00:02:04,840 Speaker 2: how long will it take me to save for that 43 00:02:04,960 --> 00:02:05,880 Speaker 2: all important goal? 44 00:02:06,760 --> 00:02:09,960 Speaker 1: And so why like why are we kind of a 45 00:02:10,000 --> 00:02:12,560 Speaker 1: little bit of a better place? I suppose to be 46 00:02:12,600 --> 00:02:15,200 Speaker 1: able to do that. Yeah. 47 00:02:15,280 --> 00:02:17,840 Speaker 2: Look, it's a mixture of things. I mean, we've seen 48 00:02:17,919 --> 00:02:20,239 Speaker 2: strong wages growth, so we've seen it declined, first of 49 00:02:20,280 --> 00:02:22,079 Speaker 2: all in terms of time to save. And the reason 50 00:02:22,160 --> 00:02:24,560 Speaker 2: for that is, you know, wage growth was only released 51 00:02:24,639 --> 00:02:27,000 Speaker 2: yesterday from the ABS and that hit a fourteen year high. 52 00:02:27,080 --> 00:02:29,840 Speaker 2: So that actually puts it into perspective that those that 53 00:02:29,840 --> 00:02:32,360 Speaker 2: have had wage growth, you know, we're seeing overall wage 54 00:02:32,400 --> 00:02:35,360 Speaker 2: growth is much better. And what we have seen is 55 00:02:35,639 --> 00:02:39,280 Speaker 2: the higher cash rate is actually having a positive impact 56 00:02:39,360 --> 00:02:43,240 Speaker 2: on savings. And so the higher wage and the higher 57 00:02:43,280 --> 00:02:46,560 Speaker 2: wages growth and the higher interest being accrued on savings 58 00:02:46,600 --> 00:02:50,880 Speaker 2: means that we are fast tracking that time to save 59 00:02:50,960 --> 00:02:53,119 Speaker 2: and it's actually helping to reduce that time to save. 60 00:02:53,160 --> 00:02:56,400 Speaker 2: And I think the Darwin, you know, Darwin is an 61 00:02:56,440 --> 00:02:59,560 Speaker 2: interesting city because it has a higher a bridge wage 62 00:02:59,560 --> 00:03:04,560 Speaker 2: compared to other capitals and is you know, seemably more 63 00:03:04,600 --> 00:03:07,280 Speaker 2: affordable than other capitals, particularly when you look at entry 64 00:03:07,400 --> 00:03:10,079 Speaker 2: unit prices in Darwin. Two hundred and eighty eight thousand 65 00:03:10,480 --> 00:03:11,600 Speaker 2: is the entry unit price. 66 00:03:12,440 --> 00:03:15,640 Speaker 1: Ni glad tell us. Are there certain suburbs in Darwin 67 00:03:16,280 --> 00:03:18,440 Speaker 1: that first time buyers are looking at? 68 00:03:19,960 --> 00:03:23,280 Speaker 2: But there are definitely locations. I mean we've found across 69 00:03:23,320 --> 00:03:26,679 Speaker 2: all of our cities that property type and location is 70 00:03:26,800 --> 00:03:29,400 Speaker 2: the unlock really to quicker market access. And I feel 71 00:03:29,440 --> 00:03:31,560 Speaker 2: like first time buyers get to this crossroads they kind 72 00:03:31,600 --> 00:03:34,120 Speaker 2: of go, well, do I continue to save, you know, 73 00:03:34,200 --> 00:03:36,520 Speaker 2: for that dream first time that I want, or do 74 00:03:36,560 --> 00:03:39,440 Speaker 2: I hedge my bets and actually compromise on the locational 75 00:03:39,480 --> 00:03:43,000 Speaker 2: property type enter the market quicker, and you know you 76 00:03:43,040 --> 00:03:45,360 Speaker 2: are hedging your bets in terms of where property prices 77 00:03:45,360 --> 00:03:47,320 Speaker 2: are going to go, you know, because you've got to 78 00:03:47,320 --> 00:03:49,080 Speaker 2: think the longer you take to save, what you could 79 00:03:49,200 --> 00:03:52,280 Speaker 2: see is that time to save actually blows out as 80 00:03:52,320 --> 00:03:55,320 Speaker 2: prices rise. But there are locations I will answer you 81 00:03:55,320 --> 00:04:01,320 Speaker 2: of question. Units are definitely it At the SA three areas, 82 00:04:01,320 --> 00:04:04,760 Speaker 2: which are a cluster of suburbs across dying Palmerston offers 83 00:04:04,400 --> 00:04:08,400 Speaker 2: the quickest market access for entry how these three years 84 00:04:08,400 --> 00:04:10,440 Speaker 2: five months, but all the way up to the CBD 85 00:04:10,520 --> 00:04:12,760 Speaker 2: so Darwin City, which is the collection of suburbs four 86 00:04:12,840 --> 00:04:14,280 Speaker 2: years eight months for Darwin City. 87 00:04:14,960 --> 00:04:16,960 Speaker 1: There you go, well, I mean it's all like I 88 00:04:17,000 --> 00:04:19,600 Speaker 1: always find it really interesting, you know when you look 89 00:04:19,600 --> 00:04:21,960 Speaker 1: at the different locations that people are keen to get into. 90 00:04:22,000 --> 00:04:24,919 Speaker 1: But also when you look at the time it takes 91 00:04:24,920 --> 00:04:26,560 Speaker 1: to sort of be able to save up to get 92 00:04:26,560 --> 00:04:29,480 Speaker 1: into your first time. What did you find though when 93 00:04:29,480 --> 00:04:32,280 Speaker 1: it comes to mortgage stress, like are there? How is 94 00:04:32,400 --> 00:04:35,840 Speaker 1: Darwin and the greater Darwin region and Palmerston sort of 95 00:04:35,880 --> 00:04:36,919 Speaker 1: tracking in that space? 96 00:04:37,920 --> 00:04:40,839 Speaker 2: Absolutely? And look, this is the catch and the fact 97 00:04:40,839 --> 00:04:42,680 Speaker 2: that we've seen a higher cash rates all as it 98 00:04:42,760 --> 00:04:44,920 Speaker 2: been positive for those that have been able to squirrel 99 00:04:44,960 --> 00:04:47,400 Speaker 2: away a little bit of savings, but it's had the 100 00:04:47,600 --> 00:04:51,520 Speaker 2: flip reverse on mortgage repayments because obviously we are paying 101 00:04:51,640 --> 00:04:54,920 Speaker 2: high interest on debt that we take on. And what 102 00:04:54,960 --> 00:04:57,120 Speaker 2: we have seen across all of our capital city is 103 00:04:57,200 --> 00:05:00,080 Speaker 2: is the cost of holding debt and the proportion of 104 00:05:00,120 --> 00:05:03,719 Speaker 2: income it takes to meet those mortgagey payments has actually 105 00:05:03,760 --> 00:05:07,200 Speaker 2: blown out. And we use thirty percent as that kind 106 00:05:07,240 --> 00:05:10,160 Speaker 2: of threshold if you hit above thirty percent, So what 107 00:05:10,160 --> 00:05:12,920 Speaker 2: that means is you really need to have less than 108 00:05:12,960 --> 00:05:17,120 Speaker 2: thirty percent of your income covering your mortgage repayments. Same 109 00:05:17,240 --> 00:05:19,960 Speaker 2: can be said for the rental market and in Darwin. 110 00:05:20,360 --> 00:05:24,719 Speaker 2: Actually serviceability of mortgage repayments is much brighter compared to 111 00:05:24,880 --> 00:05:27,680 Speaker 2: or much better compared to other capital cities, on average, 112 00:05:27,680 --> 00:05:30,040 Speaker 2: it takes twenty nine percent of income for an entry 113 00:05:30,080 --> 00:05:33,240 Speaker 2: house and eighteen percent of income for an entry unit. 114 00:05:33,640 --> 00:05:36,480 Speaker 2: I'm going to give Sydney figure because everybody needs a comparison. 115 00:05:36,600 --> 00:05:40,680 Speaker 2: In Sydney for an entry house fifty seven percent of 116 00:05:40,760 --> 00:05:42,320 Speaker 2: a couple's income. Wow. 117 00:05:42,960 --> 00:05:46,039 Speaker 1: Very often it is it's so high, isn't it. It's 118 00:05:46,320 --> 00:05:48,440 Speaker 1: you know, it's difficult, and you just think to yourself, 119 00:05:48,480 --> 00:05:51,159 Speaker 1: it's so tough. I suppose then for some of those 120 00:05:51,200 --> 00:05:53,880 Speaker 1: younger people trying to enter the market, if you live 121 00:05:53,920 --> 00:05:56,479 Speaker 1: somewhere like Sydney, I mean it's hard enough somewhere like here, 122 00:05:56,600 --> 00:05:59,160 Speaker 1: but if you live somewhere like Sydney, gir to be tough. 123 00:05:58,960 --> 00:06:03,080 Speaker 2: Going absolutely, And I think we can't disregard the fact that, 124 00:06:03,120 --> 00:06:04,919 Speaker 2: you know, if you're local in an area used to 125 00:06:04,920 --> 00:06:08,039 Speaker 2: property prices, you know, being at a certain point and 126 00:06:08,080 --> 00:06:10,480 Speaker 2: when you see property prices rise, you kind of see 127 00:06:10,560 --> 00:06:13,080 Speaker 2: that savings goal being blown out, and you know, you 128 00:06:13,120 --> 00:06:17,120 Speaker 2: may become disheartened. But I do encourage anyone looking to 129 00:06:17,120 --> 00:06:20,040 Speaker 2: get into the property market have a look. We have 130 00:06:20,480 --> 00:06:22,720 Speaker 2: a suburb insights so it allows it on domain and 131 00:06:22,760 --> 00:06:25,320 Speaker 2: it allows you to really do your research and understand 132 00:06:25,320 --> 00:06:27,800 Speaker 2: the dynamics of market, dynamics of a suburb, and we 133 00:06:27,839 --> 00:06:30,120 Speaker 2: also have a tool which helps you to understand where 134 00:06:30,160 --> 00:06:32,520 Speaker 2: you can afford to buy. So I really encourage people 135 00:06:32,560 --> 00:06:35,680 Speaker 2: to look at different property types but also different locations 136 00:06:35,720 --> 00:06:36,360 Speaker 2: within their city. 137 00:06:36,640 --> 00:06:40,719 Speaker 1: Well Domain's chief of Research and the economics doctor Nicola Pal, 138 00:06:41,000 --> 00:06:42,760 Speaker 1: thank you so much for your time this morning. 139 00:06:43,720 --> 00:06:45,440 Speaker 2: Great to chat. Thank you, thank you.