1 00:00:00,240 --> 00:00:03,160 Speaker 1: Well, Australian house prices have continued to rise over the 2 00:00:03,160 --> 00:00:06,520 Speaker 1: past month. That is, according to new data, the average 3 00:00:06,600 --> 00:00:10,399 Speaker 1: dwelling values climbed by zero point five percent in August. 4 00:00:10,760 --> 00:00:14,400 Speaker 1: It's the nineteenth consecutive monthly increase in house prices tracked 5 00:00:14,400 --> 00:00:18,400 Speaker 1: by core Logics Home Value Index. But different states and 6 00:00:18,560 --> 00:00:22,960 Speaker 1: cities obviously have seen different growth rates, and some locations 7 00:00:23,000 --> 00:00:26,200 Speaker 1: like Darwin Well, there have been declines. Now joining us 8 00:00:26,200 --> 00:00:28,800 Speaker 1: on the line is Tim Lawless, who is Call Logics 9 00:00:28,880 --> 00:00:34,440 Speaker 1: executive research Director. Good morning, Tim, Katie. Great to have 10 00:00:34,479 --> 00:00:36,840 Speaker 1: you on the show. Tim, can you talk me through 11 00:00:36,920 --> 00:00:39,640 Speaker 1: which parts of the country saw growth. 12 00:00:41,280 --> 00:00:45,320 Speaker 2: Yeah, there's a real split in growth rates here, a 13 00:00:45,320 --> 00:00:49,519 Speaker 2: real diversity. You've got markets like Perth, Adelaide, Brisbane all 14 00:00:49,640 --> 00:00:52,720 Speaker 2: rising and value by more than one percent month on months. 15 00:00:53,560 --> 00:00:55,480 Speaker 2: In a market like Perth it's rising at two percent 16 00:00:55,520 --> 00:00:58,360 Speaker 2: month on month. That's adding about fifteen thousand dollars to 17 00:00:58,400 --> 00:01:01,920 Speaker 2: the typical value be home every month. It's a significant 18 00:01:01,960 --> 00:01:06,040 Speaker 2: level of growth. But outside of those three mid sized capitals, 19 00:01:06,240 --> 00:01:09,560 Speaker 2: you've got Melbourne that's six months into a downturn, Sydney's 20 00:01:09,600 --> 00:01:13,520 Speaker 2: losing momentum, Hobart's about twelve percent below it's peaked back 21 00:01:13,520 --> 00:01:17,080 Speaker 2: in twenty two, so there's a real diversity around the market. 22 00:01:17,920 --> 00:01:21,319 Speaker 2: Darwin has been relatively flat, even though we saw values 23 00:01:21,360 --> 00:01:24,760 Speaker 2: fall a bit last month and last quarter last year, 24 00:01:24,760 --> 00:01:27,200 Speaker 2: we've seen values across Darwin increased by about one and 25 00:01:27,200 --> 00:01:31,480 Speaker 2: a half percent. So it's quite a mid range and 26 00:01:31,680 --> 00:01:34,679 Speaker 2: certainly a relatively soft market, but also a very affordable 27 00:01:34,680 --> 00:01:36,440 Speaker 2: market when you compared to the other capitals. 28 00:01:36,560 --> 00:01:39,360 Speaker 1: Yeah, Tim, do we know what's sort of causing some 29 00:01:39,560 --> 00:01:44,280 Speaker 1: locations to see that increase and continued increase and what's 30 00:01:44,280 --> 00:01:47,000 Speaker 1: sort of seeing the decline then in other locations. 31 00:01:47,840 --> 00:01:51,080 Speaker 2: Yeah, this is all about the fit between supply and demand. 32 00:01:51,160 --> 00:01:53,600 Speaker 2: So the markets that are really strong purpose is the 33 00:01:53,600 --> 00:01:57,480 Speaker 2: best example. We're seeing really strong rates of interstate migrations 34 00:01:57,520 --> 00:02:00,280 Speaker 2: of people coming from other states to move wa looking 35 00:02:00,280 --> 00:02:04,000 Speaker 2: for housing, a very strong investment trend, as well as 36 00:02:04,040 --> 00:02:07,160 Speaker 2: more investors flock into that market, chasing the capital gains 37 00:02:07,280 --> 00:02:12,200 Speaker 2: and generally higher yields. Against Against that strong demand, there's 38 00:02:12,440 --> 00:02:15,040 Speaker 2: very low levels of supply, Like listings in the market 39 00:02:15,240 --> 00:02:18,200 Speaker 2: in Perth are about forty five percent below the five 40 00:02:18,240 --> 00:02:21,520 Speaker 2: year average, so homes are selling where they quickly. Buyers 41 00:02:21,600 --> 00:02:24,000 Speaker 2: have this I guess sense of urgency that they need 42 00:02:24,040 --> 00:02:26,800 Speaker 2: to get into the market quickly, whereas it's the opposite 43 00:02:26,840 --> 00:02:30,880 Speaker 2: in a market like Melbourne or Hobart. Idristate migration is negative. 44 00:02:31,440 --> 00:02:36,200 Speaker 2: You've got falling overseas migration, you've got affordability challenges that 45 00:02:36,280 --> 00:02:39,760 Speaker 2: are becoming less less of an influence now but they 46 00:02:39,800 --> 00:02:42,040 Speaker 2: have been in the past. And you've also got less 47 00:02:42,040 --> 00:02:45,000 Speaker 2: investment activities, so the demand side pressures are much lower. 48 00:02:45,320 --> 00:02:48,240 Speaker 2: And we've seen in the accumulation of advertised stock levels 49 00:02:48,240 --> 00:02:50,800 Speaker 2: in those markets as well. And Melbourne got about thirty 50 00:02:50,800 --> 00:02:53,679 Speaker 2: percent more listings than normal for this time of the year, 51 00:02:53,720 --> 00:02:56,120 Speaker 2: which means buyers have a lot of choice and they 52 00:02:56,120 --> 00:02:57,400 Speaker 2: can negotiate pretty hard. 53 00:02:57,800 --> 00:02:59,840 Speaker 1: Yeah. So when you look at a place like dar 54 00:03:00,160 --> 00:03:03,840 Speaker 1: I mean like, are there quite a large number of listings, 55 00:03:03,880 --> 00:03:07,919 Speaker 1: what's the demand like? And not only for Darwin, I guess, 56 00:03:07,960 --> 00:03:10,360 Speaker 1: but for the whole of the Northern territory. 57 00:03:11,520 --> 00:03:15,520 Speaker 2: Yeah, it's a really interesting situation in Darwin and regional 58 00:03:15,520 --> 00:03:18,480 Speaker 2: int but mostly our springs where listing numbers are actually 59 00:03:18,560 --> 00:03:22,080 Speaker 2: really low. We're seeing I use Darwin as the best example, 60 00:03:22,680 --> 00:03:25,720 Speaker 2: listings are tracking about eighteen percent lower than a year ago. 61 00:03:25,919 --> 00:03:28,600 Speaker 2: At the moment in Darwin they're down about thirteen percent 62 00:03:28,680 --> 00:03:32,400 Speaker 2: on average levels across regional mt that they're even lower 63 00:03:32,440 --> 00:03:35,760 Speaker 2: than that. So there's definitely a lack of supply in 64 00:03:35,800 --> 00:03:39,440 Speaker 2: this marketplace. But what's really driving the relatively soft conditions 65 00:03:39,600 --> 00:03:41,920 Speaker 2: is there's also what seems to be quite a distinct 66 00:03:42,000 --> 00:03:45,839 Speaker 2: lack of demand as well. So interstate migration coming into 67 00:03:45,880 --> 00:03:49,960 Speaker 2: the NT has never been this load the last twelve months, 68 00:03:50,000 --> 00:03:51,600 Speaker 2: well at least up to the end of last year, 69 00:03:52,360 --> 00:03:56,000 Speaker 2: interstate migration was negative to a about four thousand people. 70 00:03:56,560 --> 00:03:59,000 Speaker 2: The data goes back to ninety seven, nineteen eighty seven, 71 00:03:59,160 --> 00:04:01,880 Speaker 2: and we've never seen it migration this week across the 72 00:04:01,880 --> 00:04:05,720 Speaker 2: INNT before Overseas migration is pretty strong. It's kind of 73 00:04:05,760 --> 00:04:10,080 Speaker 2: canceling out that interstate flow outflow, but that's the easing 74 00:04:10,160 --> 00:04:12,400 Speaker 2: now as well, and most of that demand from overseas 75 00:04:12,400 --> 00:04:16,320 Speaker 2: flows into rental conditions anyway, so rather than producing conditions. 76 00:04:16,680 --> 00:04:20,200 Speaker 2: So for Darwin, this says mostly these relatively soft conditions 77 00:04:20,200 --> 00:04:23,000 Speaker 2: are mostly around the demand side, where there's not as 78 00:04:23,080 --> 00:04:26,160 Speaker 2: many people looking to buy a home across the market. 79 00:04:26,400 --> 00:04:29,159 Speaker 2: But maybe the silver lining here is, you know, we 80 00:04:29,200 --> 00:04:33,400 Speaker 2: are seeing fresh home buyer levels quite elevated across the NT. 81 00:04:33,520 --> 00:04:35,480 Speaker 2: They are about thirty one percent of mortgage demand, so 82 00:04:35,520 --> 00:04:37,919 Speaker 2: a bit above average and above the national average as well, 83 00:04:38,279 --> 00:04:41,880 Speaker 2: and that's a real reflection of just the affordability improvements 84 00:04:41,920 --> 00:04:44,680 Speaker 2: we've seen in the marketplace over the past decade or. 85 00:04:44,680 --> 00:04:47,080 Speaker 1: So, Tim, can you give us a bit more detail 86 00:04:47,120 --> 00:04:49,599 Speaker 1: about the medium value of a home in the Northern 87 00:04:49,680 --> 00:04:53,120 Speaker 1: Territory comparatively to some of those other locations around Australia. 88 00:04:54,200 --> 00:04:57,240 Speaker 2: Yeah, it's really low. So if you look at Darwin's 89 00:04:57,279 --> 00:05:00,000 Speaker 2: medium dwelling value, it's five hundred and four thousand dollars. 90 00:05:00,080 --> 00:05:02,840 Speaker 2: That's by far the lowest of any capital city. If 91 00:05:02,880 --> 00:05:05,120 Speaker 2: you go to the other extreme somewhere like Sydney, he's 92 00:05:05,160 --> 00:05:07,839 Speaker 2: got a medium dwelling value of nearly one point two million, 93 00:05:07,880 --> 00:05:10,839 Speaker 2: some more than double Darwin. If you look at just 94 00:05:10,920 --> 00:05:14,360 Speaker 2: houses specifically, so those figures were for combined houses and 95 00:05:14,440 --> 00:05:18,000 Speaker 2: units together, it's a really similar trend. You've got Darwin 96 00:05:18,080 --> 00:05:20,400 Speaker 2: with a median house value of about five hundred and 97 00:05:20,440 --> 00:05:24,560 Speaker 2: ninety thousand dollars, Sydney's at nearly one point five million. Now, 98 00:05:24,800 --> 00:05:28,520 Speaker 2: Melbourne's about nine hundred and thirty thousand, Brison's about nine 99 00:05:28,600 --> 00:05:31,719 Speaker 2: hundred and sixty five thousand. So to my point is 100 00:05:31,800 --> 00:05:34,360 Speaker 2: that this is a really affordable market. In fact, if 101 00:05:34,400 --> 00:05:37,280 Speaker 2: you look at values over the past ten years in Darwin, 102 00:05:37,320 --> 00:05:39,840 Speaker 2: they're still lower than what they were a decade ago. 103 00:05:40,000 --> 00:05:42,400 Speaker 2: In fact, the market went through record highs all the 104 00:05:42,400 --> 00:05:46,000 Speaker 2: way back in twenty fourteen May twenty fourteen, and the 105 00:05:46,040 --> 00:05:49,200 Speaker 2: market's still six percent lower than that peak level. So 106 00:05:49,839 --> 00:05:52,040 Speaker 2: just gives you a bit of context. And I spoke 107 00:05:52,080 --> 00:05:54,320 Speaker 2: the longer term growth cycle that Darwin has been quite 108 00:05:54,320 --> 00:05:55,040 Speaker 2: a mild one. 109 00:05:55,279 --> 00:05:57,159 Speaker 1: Yeah, it has, and I guess we've sort of known 110 00:05:57,200 --> 00:05:59,800 Speaker 1: that for a while and know that we need to 111 00:05:59,800 --> 00:06:02,080 Speaker 1: be is our population. But I guess in order to 112 00:06:02,120 --> 00:06:04,200 Speaker 1: do that, we've got to get industry going as well 113 00:06:04,240 --> 00:06:06,919 Speaker 1: and get some of those major projects up and running. 114 00:06:06,960 --> 00:06:10,120 Speaker 1: I know over the years that's that's sort of that 115 00:06:10,200 --> 00:06:12,800 Speaker 1: has had a big impact on the real estate market 116 00:06:13,000 --> 00:06:16,039 Speaker 1: in the Northern Territory. I'm assuming that that's something that's 117 00:06:16,080 --> 00:06:18,560 Speaker 1: been seen by you guys over the years. 118 00:06:19,640 --> 00:06:22,880 Speaker 2: Yeah. Absolutely. If you go back to the times when 119 00:06:22,920 --> 00:06:25,040 Speaker 2: when the day and market was very strong, it was 120 00:06:25,240 --> 00:06:29,400 Speaker 2: in the midst of massive infrastructure projects off the Port 121 00:06:29,400 --> 00:06:32,240 Speaker 2: of Darwin there and the natural gas sector yep. And 122 00:06:32,320 --> 00:06:35,599 Speaker 2: of course big infrastructure projects have a real multiplier effect 123 00:06:35,680 --> 00:06:39,400 Speaker 2: on a local economy. They create jobs, they create more 124 00:06:39,480 --> 00:06:42,880 Speaker 2: spending and consumption. They bring population growth, which of course 125 00:06:43,839 --> 00:06:46,680 Speaker 2: is a company by housing demand. So yeah, I couldn't 126 00:06:46,680 --> 00:06:49,480 Speaker 2: agree more Keatie that the more sort of the economy 127 00:06:49,960 --> 00:06:53,120 Speaker 2: becomes more buoyant, and big infrastructure projects are a good 128 00:06:53,120 --> 00:06:56,279 Speaker 2: way to get that kick started. That's probably the key 129 00:06:56,279 --> 00:06:58,800 Speaker 2: to unlocking a stronger housing market performance. 130 00:06:58,960 --> 00:07:01,679 Speaker 1: Yeah, and tim are I mean of those interest rates 131 00:07:01,680 --> 00:07:04,680 Speaker 1: having an impact as well? Well? 132 00:07:04,760 --> 00:07:07,760 Speaker 2: Yeah, absolutely, interest rates are obviously very high. It looks 133 00:07:07,760 --> 00:07:10,280 Speaker 2: like that they're probably not going to go any higher, 134 00:07:10,320 --> 00:07:12,280 Speaker 2: which is good news. But the timing of any rate 135 00:07:12,320 --> 00:07:15,280 Speaker 2: cuts is still highly uncertain. But my money is on 136 00:07:15,280 --> 00:07:18,160 Speaker 2: February next year we start to see rates coming down, 137 00:07:18,200 --> 00:07:20,520 Speaker 2: but that's going to be a really gradual trend anyway. 138 00:07:21,120 --> 00:07:23,520 Speaker 2: So I think beyond interest rates, which are just one 139 00:07:23,560 --> 00:07:26,160 Speaker 2: of the influencers on housing markets, you've also got the 140 00:07:26,200 --> 00:07:29,000 Speaker 2: demand and supply trends. We just talked about the labor 141 00:07:29,040 --> 00:07:33,680 Speaker 2: market solutioning up. Outside of Darwin affordability pressures, it's generally 142 00:07:33,800 --> 00:07:37,360 Speaker 2: a big challenge as well, and maybe this is the 143 00:07:37,400 --> 00:07:40,520 Speaker 2: silver lining of Darwin. Another performance is that the very 144 00:07:40,560 --> 00:07:45,080 Speaker 2: low healthy levels of affordability and really higher rental yields 145 00:07:45,120 --> 00:07:48,400 Speaker 2: in Darwin will probably shine through eventually and start to 146 00:07:48,440 --> 00:07:51,760 Speaker 2: attract more people into that marketplace. But having an affordable 147 00:07:51,800 --> 00:07:53,880 Speaker 2: housing price is just one thing. Obviously you need a 148 00:07:53,960 --> 00:07:57,960 Speaker 2: job as well, and that's the magic recipe here of 149 00:07:57,960 --> 00:08:01,760 Speaker 2: a strong economy, strong jobs market, low housing prices will 150 00:08:01,800 --> 00:08:04,320 Speaker 2: definitely attract more people into the NTS. 151 00:08:04,560 --> 00:08:08,200 Speaker 1: Yes on any other interesting data you know across the 152 00:08:08,280 --> 00:08:11,600 Speaker 1: nation that could be gleaned or that our listeners might 153 00:08:11,640 --> 00:08:13,240 Speaker 1: be keen to know a little more about. 154 00:08:14,280 --> 00:08:17,040 Speaker 2: Yeah, yeah, I reckon. There's two other really interesting things. 155 00:08:17,080 --> 00:08:19,280 Speaker 2: If I break the Darwin market down into some of 156 00:08:19,280 --> 00:08:23,200 Speaker 2: the smaller areas, the subregions, you can see that some 157 00:08:23,280 --> 00:08:25,640 Speaker 2: of the outer fringes are forming a little bit better. 158 00:08:25,760 --> 00:08:28,600 Speaker 2: So markets like Parniston for example, have seen values rise 159 00:08:28,680 --> 00:08:31,280 Speaker 2: about four percent over the past twelve months, Litchfield's up 160 00:08:31,280 --> 00:08:34,760 Speaker 2: three point eight percent, so stronger markets sort of once 161 00:08:34,760 --> 00:08:36,680 Speaker 2: you get out to the more sort of outer fringe 162 00:08:36,720 --> 00:08:40,160 Speaker 2: areas where there's more space and probably less supplying as well. 163 00:08:40,559 --> 00:08:42,959 Speaker 2: The other thing would come back to rental markets and 164 00:08:43,520 --> 00:08:46,920 Speaker 2: Darwin rental markets have generally been pretty flat. We're just 165 00:08:47,000 --> 00:08:49,480 Speaker 2: starting to see a little bit of growth return to 166 00:08:49,760 --> 00:08:53,280 Speaker 2: rental markets as well after there's been a bit of 167 00:08:53,280 --> 00:08:55,320 Speaker 2: an air. But maybe that comes back to again just 168 00:08:55,800 --> 00:08:58,720 Speaker 2: a lack of investment coming into that marketplace. Rental supplies 169 00:08:58,800 --> 00:08:59,680 Speaker 2: generally pretty low. 170 00:09:00,640 --> 00:09:02,840 Speaker 1: Well, Tim, it is always good to catch up with you. 171 00:09:02,880 --> 00:09:05,640 Speaker 1: I always appreciate your time and talking us through you know, 172 00:09:05,800 --> 00:09:08,440 Speaker 1: the research that you guys do. I think it's really interesting. 173 00:09:08,480 --> 00:09:10,240 Speaker 1: I mean, when you look at your home, for a 174 00:09:10,240 --> 00:09:12,240 Speaker 1: lot of people, it's the biggest asset, one of the 175 00:09:12,280 --> 00:09:15,160 Speaker 1: biggest assets they're ever going to have, and you know, 176 00:09:15,320 --> 00:09:17,880 Speaker 1: want to make sure that it if they're looking to 177 00:09:18,000 --> 00:09:20,640 Speaker 1: sell or looking to buy, it's of even more interest 178 00:09:20,679 --> 00:09:21,920 Speaker 1: to them at this point in time. 179 00:09:22,880 --> 00:09:25,400 Speaker 2: Yeah. Absolutely, Katie, It's always a pleasure to have a chat. Thanks. 180 00:09:25,400 --> 00:09:26,480 Speaker 2: Thanks for writing me on the show.