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Speaker 1: Now, Darwin's housing market is reportedly heating up, with house

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Speaker 1: prices now at their highest level in nearly a decade.

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Speaker 1: Domain's latest house price report shows that Darwin's house prices

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Speaker 1: rose five point three percent in the September quarter. That

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Speaker 1: is up more than thirty three thousand dollars, bringing the

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Speaker 1: median to nearly six hundred and fifty seven thousand. It

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Speaker 1: is part of a national trend. Now joining us on

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Speaker 1: the line to talk more about this is DOMAIN senior

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Speaker 1: economist doctor Joel Bowman. Good morning to you.

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Speaker 2: Joel, good morning, thank you for having me.

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Speaker 1: Yeah, lovely to have you on the show. Joel tell us,

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Speaker 1: we'll talk us through the numbers. First off, the house

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Speaker 1: price increases and then the units.

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Speaker 2: Yeah, So in terms of the house prices, as you

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Speaker 2: mentioned for Darwin, upper staggering five point three percent in

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Speaker 2: the September quarter alone to each six hundred and fifty

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Speaker 2: seven thousand, So that's the highest level in over a decade.

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Speaker 2: So house price is now just three percent below the

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Speaker 2: twenty thirteen peak. And for unit prices they jump even stronger,

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Speaker 2: so six point five percent in the September quarter to

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Speaker 2: reach a median of three hundred and eighty nine thousand dollars,

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Speaker 2: so that's upper saggering twelve percent over the year, but

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Speaker 2: that still remains about twenty percent below it's twenty and

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Speaker 2: sixteen peak.

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Speaker 1: What's behind the momentum in the top ends market at

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Speaker 1: the moment.

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Speaker 2: Look, I think overall, if we have seen a big

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Speaker 2: pickup in momentum across Australia's capital cities, so across house

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Speaker 2: prices across Australia's combined capital cities are rising at the

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Speaker 2: fastest pace in nearly four years. With the last quarter

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Speaker 2: nearly every capital city saw price gains for both houses

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Speaker 2: and units except for the unit market in Canberra. So

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Speaker 2: I think overall what's supporting that big pickup in momentum

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Speaker 2: is the three RBA interest rate cuts this year and

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Speaker 2: prospects of more to come, rising consumer confidence, low levels

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Speaker 2: of supply are all driving house in unit price across Australia.

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Speaker 2: Some of those factors are a little bit even even

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Speaker 2: stronger in the Darwin market. So particularly on the supply front,

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Speaker 2: listings are down and staggering thirty percent compared to the

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Speaker 2: same time last year, so there's just not a lot

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Speaker 2: of supply out there. There's more buyers that are becoming

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Speaker 2: more active, and so all of that is resulting in

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Speaker 2: pretty strong price growth.

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Speaker 1: So down thirty percent that supply. Is that just for

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Speaker 1: Darwin or is that sort of in other more regional

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Speaker 1: parts as well, or do you just look at it

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Speaker 1: more from the territory perspective, So that.

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Speaker 2: Is that that is just for Darwin alone, for just

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Speaker 2: comparing so the month of September listings are down about

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Speaker 2: thirty percent compared to the same time last year. So

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Speaker 2: there's not a lot of supply at the moment. No.

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Speaker 1: I mean, if you're an avid real estate watcher, and

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Speaker 1: I do like to look on real estate dot Com,

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Speaker 1: I'm not ashamed to say to have a good look

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Speaker 1: at what's around, but there is not a lot for sale,

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Speaker 1: particularly sort of standalone houses. And then when you look

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Speaker 1: at those prices as as you've said, and as the

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Speaker 1: figures show, they're definitely on the rise. Yeah.

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Speaker 2: Absolutely, So it is challenging for you know, you know,

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Speaker 2: home buyers that are looking to get their foot on

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Speaker 2: the ladder. Is very challenging, and it's also challenging for

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Speaker 2: renters as well, and I think that's that's being a

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Speaker 2: big draw card as well for potentially investors in the

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Speaker 2: Darwin markets. So the vacancy rates still remain very low,

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Speaker 2: and I think overall, the yields, which means that ren's

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Speaker 2: relative to home prices is quite attractive in Darwin relative

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Speaker 2: to some of the other kind of capital cities. So

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Speaker 2: I think that's potentially drawing in more more interstate investors.

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Speaker 1: Yeah, well, that was going to be my next question.

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Speaker 1: Do you reckon we are seeing people from interstate wanting

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Speaker 1: to snap up property here in the NT.

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Speaker 2: Yeah, I mean it's certainly hard to get good timely

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Speaker 2: reads on it, but I wouldn't be surprised. So if

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Speaker 2: we're looking at just those those yields alone, so again

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Speaker 2: that just is your rent's relative to your home prices.

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Speaker 2: It's about six percent in for houses seven point eight

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Speaker 2: percent in Darwin, and that's really high compared to what

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Speaker 2: you get in the combined capitals where it typically is

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Speaker 2: sits closer to that three and five percent level, respectively.

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Speaker 2: So if you know, for investors looking for a more

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Speaker 2: kind of cash flow, Darwin looks very attractive relative to

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Speaker 2: other cities.

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Speaker 1: And so then when you look at those unit prices

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Speaker 1: rising sort of even faster than the houses at the moment.

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Speaker 1: Are we seeing a shift in buyer behavior with those

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Speaker 1: affordability pressures as well?

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Speaker 2: Yeah, absolutely so we're definitely seeing that in some other

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Speaker 2: pockets as well as such as Brisbane. So we're seeing

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Speaker 2: stronger price gains in a unit market compared to the

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Speaker 2: compared to the home price market. So, as you mentioned,

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Speaker 2: affordability constraints are becoming a lot more pressing and I

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Speaker 2: think that's increasingly kind of shifting buyers to the more

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Speaker 2: affordable properties, which tend to be you know, more of

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Speaker 2: the units supplies not picking up in a material way,

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Speaker 2: and so that's resulting in yeah, more more competition essentially

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Speaker 2: for the more affordable properties, and I think units are

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Speaker 2: benefiting from that.

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Speaker 1: Yeah, Joel, I know this is probably a tough question

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Speaker 1: to answer. You don't have a crystal ball, but are

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Speaker 1: we expecting Darwin's growth to continue in twenty twenty six

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Speaker 1: or do we think that there is going to be

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Speaker 1: a bit of a slow down on the horizon.

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Speaker 2: Look, I mean that's a good one. So I think

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Speaker 2: in terms of the sharp rises that we've seen in

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Speaker 2: September quarter alone, I think it's going to be really

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Speaker 2: hard to sustain that. But I think Overall, some of

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Speaker 2: those drivers of those strong price price games over the

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Speaker 2: last year, I think they're likely to be sustained over

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Speaker 2: the next year or so. So, as I mentioned with

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Speaker 2: interest rate cuts, there's prospects of more to come, rising

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Speaker 2: consumer confidence and that low levels of supply. In addition

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Speaker 2: to that, you've also got the expansion of some of

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Speaker 2: the first home first home buyers schemes, particularly the home

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Speaker 2: guarantee scheme, so people can get in with a five

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Speaker 2: percent deposit without needing to pay for that expensive lender's

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Speaker 2: mortgage insurance. So I think all of that will result

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Speaker 2: in more first time buyers potentially going through open home.

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Speaker 2: So big increase in first time buyers. Supply is not

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Speaker 2: going to pick up in a big way in the

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Speaker 2: near term, and so I think that will add to

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Speaker 2: some of the price pressures over the next year or so.

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Speaker 1: Yeah, we've had a lot of discussion as well on

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Speaker 1: this show over recent weeks about the first home buyers

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Speaker 1: because for us here in the NT that cap is

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Speaker 1: at six hundred thousand. But now you know, we've got

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Speaker 1: the median house price at the moment, as your figures

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Speaker 1: have shown at six hundred and fifty seven and then

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Speaker 1: we're talking about you know, those supplies, like the supply

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Speaker 1: being quite low, it will make it difficult, you would

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Speaker 1: suspect for first time buyers to be able to access

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Speaker 1: that scheme or to enter the market. The way that

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Speaker 1: things are tracking.

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Speaker 2: Look sir, that's definitely that the meeting, and I think

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Speaker 2: in terms of having that threshold slightly below the meeting

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Speaker 2: is something that we typically see in a lot of

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Speaker 2: the other other cities as well. So I think, thank

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Speaker 2: you're still by lunch, is still a good proportion of

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Speaker 2: properties that people can still get in under that price cap,

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Speaker 2: particularly and in the unit market as well, So I

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Speaker 2: suspect that there will be a lot of competition for

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Speaker 2: properties under those price cap.

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Speaker 1: Yeah, for sure. Well, Domain Senior Economists, Doctor Joel Bowman,

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Speaker 1: I was about to call you, Darwin Senior Economists, Domain

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Speaker 1: Senior Economist, Joel lovely to speak to you this morning, mate,

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Speaker 1: Thanks so much for your time.

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Speaker 2: Thanks for having me. Thank you