1
00:00:00,080 --> 00:00:03,920
Speaker 1: As we know, Australia's rental market, well, it remains locked

2
00:00:03,920 --> 00:00:07,640
Speaker 1: in favor of landlords with limited supply pushing rents to

3
00:00:07,720 --> 00:00:11,479
Speaker 1: it all time highs. That's according to Domain's rent report

4
00:00:11,560 --> 00:00:14,440
Speaker 1: for the June quarter. But in Darwin, house and unit

5
00:00:14,480 --> 00:00:18,280
Speaker 1: rents bucked the rising national trend, with house rents holding

6
00:00:18,280 --> 00:00:19,800
Speaker 1: steady and unit rents.

7
00:00:19,680 --> 00:00:21,239
Speaker 2: Declining over the June quarter.

8
00:00:21,320 --> 00:00:23,200
Speaker 1: Now joining me on the line to tell us a

9
00:00:23,239 --> 00:00:26,040
Speaker 1: little bit more is Domains doctor Nikola Pal.

10
00:00:26,160 --> 00:00:27,840
Speaker 2: Good morning to you, Nikola.

11
00:00:28,280 --> 00:00:30,760
Speaker 3: That's very good morning to you. Thanks for having me on.

12
00:00:30,920 --> 00:00:32,400
Speaker 2: Yeah, lovely to have you on the show.

13
00:00:32,520 --> 00:00:35,479
Speaker 1: Now tell us, as the chief of research of course

14
00:00:36,040 --> 00:00:39,879
Speaker 1: with Domain, what have you found with this the latest report.

15
00:00:41,159 --> 00:00:43,920
Speaker 3: So we have found that there is a diversity of

16
00:00:43,960 --> 00:00:46,839
Speaker 3: different rental markets across Australia and I think you know

17
00:00:46,920 --> 00:00:49,320
Speaker 3: there is a bit of good news for tenants because

18
00:00:49,320 --> 00:00:51,680
Speaker 3: we've had such a tight rental market for such a

19
00:00:51,720 --> 00:00:55,080
Speaker 3: long period of time. Darwin is actually bucking the overall

20
00:00:55,160 --> 00:00:58,720
Speaker 3: national trend. Now nationally rent continue to rise, but in

21
00:00:58,840 --> 00:01:02,440
Speaker 3: Darwin we've seen house rents hold steady over the most

22
00:01:02,440 --> 00:01:04,920
Speaker 3: recent quarter, but I would say they are still at

23
00:01:04,920 --> 00:01:07,920
Speaker 3: a record high for house rents and Darwin are currently

24
00:01:08,720 --> 00:01:12,480
Speaker 3: sitting at six hundred and fifty dollars a week, but

25
00:01:12,600 --> 00:01:15,880
Speaker 3: unit rents are declining. We saw them decline over the quarter.

26
00:01:16,240 --> 00:01:18,959
Speaker 3: They're at five hundred and fifteen dollars a week.

27
00:01:19,440 --> 00:01:23,480
Speaker 1: Nikola tell us how do those prices compared to other

28
00:01:23,520 --> 00:01:25,080
Speaker 1: states and other locations.

29
00:01:26,840 --> 00:01:30,120
Speaker 3: So Darwin is up there in terms of price points.

30
00:01:30,160 --> 00:01:32,640
Speaker 3: So in terms of houses, Darwin is the third most

31
00:01:32,640 --> 00:01:35,640
Speaker 3: expensive capital city to rent a house. Sydney is the

32
00:01:35,640 --> 00:01:38,280
Speaker 3: most expensive city, that's seven hundred dollars a week, and

33
00:01:38,319 --> 00:01:41,520
Speaker 3: then it's Canberra and Darwin. In terms of units it

34
00:01:41,600 --> 00:01:44,520
Speaker 3: comes in at the fourth most expensive. So for units

35
00:01:44,600 --> 00:01:46,319
Speaker 3: it is a bit more middle of the road when

36
00:01:46,319 --> 00:01:49,639
Speaker 3: you do that comparison across all the other different cities,

37
00:01:49,640 --> 00:01:52,040
Speaker 3: and again you can probably pick which city is the

38
00:01:52,040 --> 00:01:54,520
Speaker 3: most expensive or a unit is Sydney.

39
00:01:55,000 --> 00:01:58,040
Speaker 1: Yeah, Sydney seems to be astronomically high. I mean, in

40
00:01:58,080 --> 00:02:00,240
Speaker 1: the seven hundreds. Jeez, that's a lot of money, isn't

41
00:02:00,240 --> 00:02:02,160
Speaker 1: it for you? Weekly sort of expenses.

42
00:02:03,640 --> 00:02:07,280
Speaker 3: Sydney is just far superior in terms of price point

43
00:02:07,280 --> 00:02:10,960
Speaker 3: compared to other capital cities. And it's interesting this quarter

44
00:02:11,040 --> 00:02:14,120
Speaker 3: it's the first time since twenty eighteen that Sydney is

45
00:02:14,160 --> 00:02:17,120
Speaker 3: the most expensive city to rent a house and a

46
00:02:17,280 --> 00:02:21,480
Speaker 3: unit to It actually overtook rental prices in Canberra over

47
00:02:21,520 --> 00:02:25,720
Speaker 3: the most recent quarter for house house rents, and Camera's

48
00:02:25,800 --> 00:02:29,320
Speaker 3: up there too in terms of what renters are paying

49
00:02:29,760 --> 00:02:32,880
Speaker 3: higher average wage, though in Camera Darwin also has that

50
00:02:33,400 --> 00:02:35,799
Speaker 3: we do have to consider that when a city has

51
00:02:35,800 --> 00:02:39,440
Speaker 3: a higher than average wage compared to the other cities,

52
00:02:39,760 --> 00:02:42,280
Speaker 3: that also can feed into higher rental prices.

53
00:02:42,320 --> 00:02:44,600
Speaker 2: Also, Yeah, that was going to be my next question.

54
00:02:44,680 --> 00:02:46,800
Speaker 1: Why is it that a place like Darwin, you know,

55
00:02:46,880 --> 00:02:48,920
Speaker 1: from the research that you've done, why is it that

56
00:02:49,000 --> 00:02:51,120
Speaker 1: our rent seem so high? Because I guess when you

57
00:02:51,120 --> 00:02:54,359
Speaker 1: look at our population, you know, we're probably more comparative

58
00:02:54,360 --> 00:02:56,799
Speaker 1: to a place like Townsville or cans or some more

59
00:02:56,840 --> 00:03:00,240
Speaker 1: regional parts of Australia. But when it comes to our

60
00:03:00,280 --> 00:03:03,800
Speaker 1: rents and our living expenses, they're right up there with

61
00:03:03,840 --> 00:03:05,160
Speaker 1: the other capitals.

62
00:03:05,840 --> 00:03:08,240
Speaker 3: They certainly are. And I do think that the element

63
00:03:08,320 --> 00:03:12,240
Speaker 3: of a higher average wage does feed into higher rental prices.

64
00:03:12,240 --> 00:03:14,200
Speaker 3: And there is an element that Darwin does have a

65
00:03:14,200 --> 00:03:16,960
Speaker 3: bit of a transient nature to its population, and I think,

66
00:03:17,240 --> 00:03:19,960
Speaker 3: you know, if people are moving and relocating. You know,

67
00:03:19,960 --> 00:03:22,560
Speaker 3: they're willing to maybe pay that a little bit more

68
00:03:23,000 --> 00:03:25,400
Speaker 3: for a more premium home, and you know, six fifty

69
00:03:25,400 --> 00:03:28,720
Speaker 3: a week for a house is a significant amount of money.

70
00:03:28,760 --> 00:03:32,000
Speaker 3: But I think mainly here it's a lack of rental

71
00:03:32,040 --> 00:03:35,200
Speaker 3: supply and that's really been the case across Australia. So

72
00:03:35,240 --> 00:03:38,800
Speaker 3: the vacancy rate currently in Darwin is zero point six percent.

73
00:03:38,960 --> 00:03:42,400
Speaker 3: Now that is very low, and a balanced rental market

74
00:03:42,520 --> 00:03:45,560
Speaker 3: has a vacancy rate between two and three percent. So

75
00:03:46,040 --> 00:03:49,000
Speaker 3: Darwin is sitting at zero point six I think, you know,

76
00:03:49,040 --> 00:03:51,160
Speaker 3: the silver lining or the good news that we have

77
00:03:51,320 --> 00:03:54,520
Speaker 3: found is that that vacancy rate is starting to nudge higher,

78
00:03:54,800 --> 00:03:56,560
Speaker 3: and I think that's why we started to see a

79
00:03:56,600 --> 00:03:59,440
Speaker 3: little bit more of a stability coming out of particularly

80
00:03:59,720 --> 00:04:02,760
Speaker 3: house rent calls rather than unit rentals. Unit rentals have

81
00:04:02,760 --> 00:04:05,080
Speaker 3: struggled a little bit in Darwin. There not at a

82
00:04:05,120 --> 00:04:07,120
Speaker 3: record high. Even though we did see a bit of

83
00:04:07,160 --> 00:04:11,720
Speaker 3: an increase. They still remain lower than the record high

84
00:04:11,760 --> 00:04:14,880
Speaker 3: for unit rent that was achieved back in twenty fourteen

85
00:04:15,000 --> 00:04:15,840
Speaker 3: for Darwin units.

86
00:04:16,880 --> 00:04:18,720
Speaker 2: Now tell me do you expect obvious?

87
00:04:18,760 --> 00:04:22,000
Speaker 1: So we saw the interest rates remain steady this week,

88
00:04:22,080 --> 00:04:24,720
Speaker 1: But do you expect that we could see some changes

89
00:04:24,760 --> 00:04:27,360
Speaker 1: when it comes to rents, and it could get worse

90
00:04:27,760 --> 00:04:30,800
Speaker 1: if we see further interest rate hikes.

91
00:04:31,279 --> 00:04:35,279
Speaker 3: So I think we're starting to see rental conditions turn

92
00:04:35,320 --> 00:04:38,000
Speaker 3: a corner. I actually think we're starting to see them improve,

93
00:04:38,080 --> 00:04:41,120
Speaker 3: and I mean in favor of tenants. That the tide

94
00:04:41,160 --> 00:04:44,919
Speaker 3: is shifting because we have seen overall supply start to

95
00:04:45,040 --> 00:04:48,120
Speaker 3: lift and that's coming out in our vacancy rates which

96
00:04:48,160 --> 00:04:51,440
Speaker 3: is now edging higher across all of our capital cities

97
00:04:51,440 --> 00:04:54,760
Speaker 3: and even into regional Australia as well. And when you

98
00:04:54,839 --> 00:04:58,000
Speaker 3: have a look at the latest the latest home loan

99
00:04:58,120 --> 00:05:02,240
Speaker 3: data from Australian bureau Stistic loans to investors are now

100
00:05:02,360 --> 00:05:05,479
Speaker 3: starting to increase too. So if we continue to see that,

101
00:05:05,600 --> 00:05:08,800
Speaker 3: that should translate into additional rental stocks. So I think,

102
00:05:09,160 --> 00:05:10,920
Speaker 3: you know, I call it the pressure cooker. It has

103
00:05:10,960 --> 00:05:14,040
Speaker 3: been a pressure cooker of a rental market over last year.

104
00:05:14,040 --> 00:05:16,000
Speaker 3: In the very early part of this year, I think

105
00:05:16,040 --> 00:05:18,400
Speaker 3: we're seeing a little bit of steam being released.

106
00:05:18,839 --> 00:05:19,760
Speaker 2: And it's interesting too.

107
00:05:19,839 --> 00:05:21,720
Speaker 1: I guess you know, you spoke about the lack of

108
00:05:22,120 --> 00:05:25,680
Speaker 1: rental supply, but we spoke to the to the Shadow

109
00:05:25,680 --> 00:05:28,680
Speaker 1: Treasurer Angus Taylor yesterday who talked about the fact that

110
00:05:28,720 --> 00:05:32,120
Speaker 1: you know, in terms of new builds and in terms

111
00:05:32,160 --> 00:05:35,520
Speaker 1: of really increasing that housing supply, people are a bit gunshy.

112
00:05:35,560 --> 00:05:37,920
Speaker 1: I suppose at this point with those interest rates.

113
00:05:38,800 --> 00:05:42,719
Speaker 3: It's absolutely challenging. The construction industry has really experienced some

114
00:05:43,040 --> 00:05:47,040
Speaker 3: unprecedented headwinds and it's created this industry wide slowdown, which

115
00:05:47,080 --> 00:05:48,760
Speaker 3: means we've seen a drop in the number of new

116
00:05:48,800 --> 00:05:51,960
Speaker 3: homes being built. And this all feeds into it is challenging.

117
00:05:52,200 --> 00:05:56,320
Speaker 3: It's hard to make projects feasible for the construction industry,

118
00:05:57,160 --> 00:05:59,360
Speaker 3: so you know it is and that's going to remain

119
00:05:59,440 --> 00:06:02,360
Speaker 3: challenging because I think you know, while we saw interest

120
00:06:02,440 --> 00:06:06,120
Speaker 3: rate pause, we're still expecting the cash rate to have one,

121
00:06:06,240 --> 00:06:11,480
Speaker 3: maybe two more rate hikes before that period of stability,

122
00:06:11,680 --> 00:06:14,760
Speaker 3: and you know, the market is actually pricing in interest

123
00:06:14,880 --> 00:06:19,200
Speaker 3: rate cuts towards the middle part now of next calendar year.

124
00:06:19,400 --> 00:06:21,560
Speaker 3: So I mean the outlook is still it's going to

125
00:06:21,600 --> 00:06:26,280
Speaker 3: take a large shift in terms of increasing in rental supply.

126
00:06:26,800 --> 00:06:30,840
Speaker 3: So across Australia we're actually predicting or are we've estimated

127
00:06:30,920 --> 00:06:34,479
Speaker 3: that today we need to double the amount of rental

128
00:06:34,520 --> 00:06:37,800
Speaker 3: stock that is currently available to make Australia overall a

129
00:06:37,839 --> 00:06:41,120
Speaker 3: balanced rental market. Now that is not something that, yeah,

130
00:06:41,440 --> 00:06:45,080
Speaker 3: is a quick fix, so you know, these are you know,

131
00:06:45,160 --> 00:06:47,279
Speaker 3: need to be kind of longer term solutions. But what

132
00:06:47,360 --> 00:06:50,600
Speaker 3: I would say is we have started to see a

133
00:06:50,640 --> 00:06:54,120
Speaker 3: glimmer of a change in terms of increase investment and

134
00:06:54,160 --> 00:06:57,960
Speaker 3: activity in a slight increase in the overall availability of

135
00:06:58,000 --> 00:07:01,240
Speaker 3: rentals across Australia, but also in well.

136
00:07:01,160 --> 00:07:04,719
Speaker 1: Chief of Research with Domain doctor Nikola Powell. I really

137
00:07:04,760 --> 00:07:06,960
Speaker 1: appreciate your time this morning. Thanks so much for having

138
00:07:07,000 --> 00:07:09,840
Speaker 1: a chat with us. Thank you, thank you,