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Speaker 1: We know that DOMAIN have released their twenty twenty three

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Speaker 1: end of year Wrap and twenty twenty four outlook report.

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Speaker 1: The outlook for the property market next year will be

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Speaker 1: shaped by several factors including supply shortfall, strong population growth

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Speaker 1: and nationwide and of course interst rates those high interest rates.

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Speaker 1: Now joining me on the line to tell us more

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Speaker 1: is Domain's chief of Research and Economics, doctor Nicola Powell.

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Speaker 1: Nicola Powell, I should say good morning to you, Nikola,

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Speaker 1: good morning, Thank you so much for your time. Now,

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Speaker 1: before we get into twenty twenty four, how has the

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Speaker 1: market fared for twenty twenty three?

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Speaker 2: Twenty twenty three has been that really interesting market dynamics

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Speaker 2: because what we saw was a short full of housing

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Speaker 2: supply across Australia really collide with rapid population growth. We

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Speaker 2: also had a very strange construction sector, and of course

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Speaker 2: we had the tightest rental market on record, and we've

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Speaker 2: still got Australia's vacancy rate at a record low. And

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Speaker 2: when you have a look across our different capitals scene

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Speaker 2: is we've pretty much got all of them moving into

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Speaker 2: a recovery mode, which means prices arising, and we've got

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Speaker 2: some of our capital cities at a record end in

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Speaker 2: the year with a record high price, and.

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Speaker 1: So you reckon because I suppose there are some people

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Speaker 1: that are maybe thinking, if the interest rates rise yet

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Speaker 1: again early next year, then it's going to have a

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Speaker 1: big impact, and I suppose a real sort of hit

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Speaker 1: to the housing market. What are your thoughts on that.

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Speaker 2: Yeah, Look, I think it's been highly unusual, I suppose

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Speaker 2: because what you would expect is that higher interest rates

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Speaker 2: would weigh in negatively on price growth, and it actually hasn't.

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Speaker 2: And for me, I think twenty twenty three really showcases

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Speaker 2: the underlying short full of housing supply probably runs far

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Speaker 2: deeper than we initially anticipated. I mean, it's also that

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Speaker 2: timely reminder that interest rates are obviously a factor that

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Speaker 2: drive demand for housing. It it dictates how much you

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Speaker 2: can borrow, but there are many other factors, and population

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Speaker 2: growth is one of those key ones that drives demand

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Speaker 2: for housing. And we all need a roof over head.

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Speaker 2: So it's really understandable to see why we've seen this

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Speaker 2: recovery at a time where we have actually experienced strong

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Speaker 2: rates of population growth.

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Speaker 1: And I know for us in the end, population really

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Speaker 1: hasn't grown over the last year or so, but we

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Speaker 1: still are experiencing that housing shortage as well.

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Speaker 2: Look, that is true, and I think you know, the

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Speaker 2: population dynamics in the Northern Territory are slightly different compared

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Speaker 2: to other cities. And you know, one of the demographic

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Speaker 2: trends is that move away from the Northern Territory to

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Speaker 2: other states and territories does create a drain away from

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Speaker 2: from housing demand. We have got Dalwin prices moving into recovery,

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Speaker 2: but their house prices are still four percent below their

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Speaker 2: previous price peak. It's slightly different for unit prices. Unit

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Speaker 2: prices overall are well below their previous price peak. But

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Speaker 2: you know, the houses absolutely we have seen them moving

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Speaker 2: to that recovery in about four percent below price peak,

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Speaker 2: currently sitting at just under six hundred and fifty thousand.

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Speaker 1: Yeah, right, And so I mean, what's the outlook then,

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Speaker 1: or what are we thinking is going to be the

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Speaker 1: case for next year? How are we thinking that the

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Speaker 1: market is sort of going to go in twenty twenty four?

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Speaker 2: So what we are forecasting for prices over twenty twenty

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Speaker 2: four is an increase. We're expecting prices to rise, but

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Speaker 2: nowhere near boom time scenario. So what we forecast for

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Speaker 2: the calendar year of twenty twenty four is an increase

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Speaker 2: between five and seven percent in house prices Australia wide

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Speaker 2: and the increase between two and four percent in unit prices.

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Speaker 1: So we are expecting that bit of an increase. Now,

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Speaker 1: tell me as well, I suppose again just for us

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Speaker 1: here in the Northern Territory. And I touched on this

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Speaker 1: a moment ago. While the population hasn't grown, we are

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Speaker 1: all hoping and I know that there's been a big

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Speaker 1: push to try and bring more international students into the

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Speaker 1: Northern Territory. We are also thinking that we're going to

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Speaker 1: need to, know to bolster the workforce in a number

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Speaker 1: of different industries. I guess everybody is wondering where are

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Speaker 1: these people going to live? So what impact could that

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Speaker 1: then have on the market.

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Speaker 2: Yeah, absolutely, And this is one of the things is

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Speaker 2: you know, population growth is very easy to switch back on,

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Speaker 2: and it you know, weighs heavily into rental demong and

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Speaker 2: also in the sales market also, and I actually think

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Speaker 2: it really places into the spotlight the undersupply and the

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Speaker 2: real need for the government to meet that housing a

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Speaker 2: Card target of delivering one point two million homes over

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Speaker 2: the next five years. So it does meet and that

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Speaker 2: we need to see two hund forty thousand homes delivered

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Speaker 2: across Australia every single year for the next five years.

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Speaker 2: So I do think it really does place the need

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Speaker 2: for not only housing, but affordable housing into the feltlighte.

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Speaker 1: Yeah, you are so right, and it's something we've spoken

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Speaker 1: about on the show before. I know we've spoken to

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Speaker 1: the different social housing sectors as well and affordable housing

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Speaker 1: sectors about that. And again I suppose for us, so

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Speaker 1: again we're wondering, you know, we've got we do have

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Speaker 1: a great strong workforce, but making sure that we've got

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Speaker 1: the people here to be able to build them and

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Speaker 1: to be able to you know, to get those houses

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Speaker 1: into the market or not the market so much, but

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Speaker 1: people into them. Yeah.

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Speaker 2: Absolutely, And look this is a bit of the catch

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Speaker 2: twenty two because you know, we do need more skills

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Speaker 2: in terms of actually being able to help deliver the

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Speaker 2: homes that are needed. But on the flip side, that

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Speaker 2: also creates demand for housing and you see that come in.

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Speaker 2: And what's interesting, we've picked a part some of the

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Speaker 2: main drivers of price cycles and housing demand and population

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Speaker 2: growth in itself has a much more longer collective effect

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Speaker 2: on price cycles and demand for homes. And that makes sense,

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Speaker 2: doesn't it in terms of your moving through the cycles

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Speaker 2: of the stages of life, meaning that you need different

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Speaker 2: things from housing. And you know, we've seen record levels

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Speaker 2: of overseas net overseas migration, and most overseas migrants tend

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Speaker 2: to rent, but the longer you stay, the much more

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Speaker 2: likely you are to then make a purchase, so we're

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Speaker 2: still going to be feeling those impacts on the demand

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Speaker 2: side within our housing markets.

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Speaker 1: Well, doctor Nikola Pal, it is always wonderful to speak

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Speaker 1: to you. I really appreciate your time. I find this

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Speaker 1: stuff quite fascinating and it's really good to speak to you.

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Speaker 1: All thet for twenty twenty four, no doubt we'll talk

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Speaker 1: to you again soon.

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Speaker 2: And to you, thanks very much.

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Speaker 1: Thank you,