1 00:00:00,160 --> 00:00:02,960 Speaker 1: We do know that interest rates in Australia have risen 2 00:00:03,360 --> 00:00:06,600 Speaker 1: to a nine year high, putting extra pressure on mortgage holders, 3 00:00:06,880 --> 00:00:09,680 Speaker 1: and the cash rate has risen by a quarter of 4 00:00:09,680 --> 00:00:13,320 Speaker 1: the percent yesterday, which is lower than what was expected. 5 00:00:13,800 --> 00:00:16,439 Speaker 1: Now the Reserve Bank is warning that soaring inflation will 6 00:00:16,480 --> 00:00:19,240 Speaker 1: lead to further increases. To tell us more about the 7 00:00:19,280 --> 00:00:23,040 Speaker 1: impacts is Aswhend Silver from the Real Estate Institute of 8 00:00:23,079 --> 00:00:26,759 Speaker 1: Australia's Northern Territory branch. Good morning to you, Aswen. 9 00:00:27,480 --> 00:00:28,800 Speaker 2: Good morning to your kid. How are you? 10 00:00:29,040 --> 00:00:32,519 Speaker 1: Yeah, really well, thank you so much for your time. Now, asmen, 11 00:00:32,920 --> 00:00:36,280 Speaker 1: what was your reaction to the latest interest rate rise? 12 00:00:37,840 --> 00:00:40,800 Speaker 2: Yeah, you were You are correct. We were expecting a 13 00:00:40,800 --> 00:00:46,800 Speaker 2: fifty basis point in case twenty five from that perspective 14 00:00:47,520 --> 00:00:52,519 Speaker 2: was good. But going forward that cash rate is expected 15 00:00:52,520 --> 00:00:58,880 Speaker 2: to reach three point three five by December January twenty 16 00:00:58,960 --> 00:01:03,560 Speaker 2: twenty three, in line with inflationary increases expected from the 17 00:01:03,600 --> 00:01:07,480 Speaker 2: current six point one to seven percent, but saying that 18 00:01:08,600 --> 00:01:12,520 Speaker 2: the rental years with that increase will be under pressure 19 00:01:13,360 --> 00:01:17,640 Speaker 2: obviously because particularly from first term bias point of view, 20 00:01:18,120 --> 00:01:22,560 Speaker 2: their ability to access funding from banks will reduce. With that, 21 00:01:22,560 --> 00:01:25,319 Speaker 2: the vacancy rates also could come down. 22 00:01:26,319 --> 00:01:29,280 Speaker 1: And so I mean, I guess you've pointed to a 23 00:01:29,280 --> 00:01:31,000 Speaker 1: bit of it there, But how do you think that 24 00:01:31,080 --> 00:01:34,000 Speaker 1: then that is going to sort of impact us here 25 00:01:34,040 --> 00:01:37,480 Speaker 1: in the Northern Territory and impact mortgage holders. 26 00:01:39,120 --> 00:01:42,919 Speaker 2: It will have an impact on the mortgage holder, particularly 27 00:01:43,920 --> 00:01:47,039 Speaker 2: the mortgage holders who are currently on a variable rate. 28 00:01:48,080 --> 00:01:50,800 Speaker 2: The people who have fixed the rate won't have an 29 00:01:50,800 --> 00:01:56,000 Speaker 2: impact up until the fixed contract ends be SEP particularly 30 00:01:56,040 --> 00:01:59,640 Speaker 2: as I told you first first entrance to the market, 31 00:02:00,440 --> 00:02:07,440 Speaker 2: the younger folks, because their ability to access funding will 32 00:02:07,480 --> 00:02:13,519 Speaker 2: be that much more limited unless we get the apartments, 33 00:02:13,680 --> 00:02:18,679 Speaker 2: the units construction going. We have had challenges, the construction 34 00:02:18,800 --> 00:02:24,600 Speaker 2: costs have have the increase, We have had supply chain issues, 35 00:02:24,680 --> 00:02:27,440 Speaker 2: they have been labor issues. So it's a whole gamut 36 00:02:27,480 --> 00:02:31,760 Speaker 2: of things needs to be addressed sooner rather than later. 37 00:02:31,960 --> 00:02:34,359 Speaker 1: And as from what are you finding in the territory 38 00:02:34,400 --> 00:02:37,480 Speaker 1: at the moment, like, as these mortgage rates change and 39 00:02:37,520 --> 00:02:39,720 Speaker 1: as they increase, what are you finding that it's sort 40 00:02:39,720 --> 00:02:41,920 Speaker 1: of doing here in the territory when it comes to 41 00:02:41,960 --> 00:02:43,200 Speaker 1: the housing market. 42 00:02:45,040 --> 00:02:50,880 Speaker 2: Well, the median house prices, we have thus far come 43 00:02:50,919 --> 00:02:56,640 Speaker 2: out unscathed compared to all jurisdictions nationally primarily because of 44 00:02:56,800 --> 00:03:00,040 Speaker 2: there have been corrections taking place from two thousand and 45 00:03:00,080 --> 00:03:06,320 Speaker 2: fifteen onwards, whereas in other states the house pricing have 46 00:03:06,400 --> 00:03:11,520 Speaker 2: been rapidly increasing. We were there was two volanteers we 47 00:03:11,639 --> 00:03:15,960 Speaker 2: had in twenty twenty and twenty nineteen specifically, so we 48 00:03:16,000 --> 00:03:20,080 Speaker 2: could see the median house prices that are currently at 49 00:03:21,080 --> 00:03:27,000 Speaker 2: five hundred and ten thousand approximately, could see those medium 50 00:03:27,000 --> 00:03:30,360 Speaker 2: prices coming down towards first cott and xt year. 51 00:03:31,760 --> 00:03:34,480 Speaker 1: So they could be so obviously they could be. I'm 52 00:03:34,520 --> 00:03:36,120 Speaker 1: assuming that it means that it could be a good 53 00:03:36,120 --> 00:03:38,880 Speaker 1: thing for those that are wanting to enter the housing market. 54 00:03:39,520 --> 00:03:42,240 Speaker 2: Correct correct as long as you get the timing right. 55 00:03:43,800 --> 00:03:47,200 Speaker 2: But the only thing is if you're if you're looking 56 00:03:47,200 --> 00:03:51,320 Speaker 2: at a financial institution, then you're borrowing at a higher rate. 57 00:03:51,840 --> 00:03:55,160 Speaker 1: Yeah, And so as wean talk us through, then does 58 00:03:55,200 --> 00:03:58,640 Speaker 1: it have an impact I suppose, like you know, on 59 00:03:58,680 --> 00:04:02,080 Speaker 1: the I neither. It obviously doesn't impact those that are renters, 60 00:04:02,120 --> 00:04:04,280 Speaker 1: but does it have sort of that flow on impact 61 00:04:04,360 --> 00:04:07,360 Speaker 1: to the rental market as well more generally because there 62 00:04:07,440 --> 00:04:09,480 Speaker 1: is that change to those that own their homes. 63 00:04:10,960 --> 00:04:16,680 Speaker 2: Yeah, definitely will have an impact, particularly because as the 64 00:04:17,160 --> 00:04:21,800 Speaker 2: yields go up currently it's at five point eight percent 65 00:04:21,839 --> 00:04:24,200 Speaker 2: for a two bed unit and about five point one 66 00:04:24,240 --> 00:04:28,640 Speaker 2: for three bed housing. When the yields go up, the 67 00:04:28,680 --> 00:04:32,520 Speaker 2: rental market will be under stress and the rentals will 68 00:04:32,560 --> 00:04:38,440 Speaker 2: go up unless we have the constructions going the supply 69 00:04:38,760 --> 00:04:39,880 Speaker 2: in line with the demand. 70 00:04:41,040 --> 00:04:43,440 Speaker 1: So as what's the message I mean at the moment, 71 00:04:44,040 --> 00:04:46,600 Speaker 1: I guess everybody can see what's going on with the 72 00:04:46,920 --> 00:04:49,279 Speaker 1: mortgage right everybody knows that it's pretty tough going if 73 00:04:49,320 --> 00:04:52,400 Speaker 1: you've got a mortgage and your interest rates are variable. 74 00:04:53,160 --> 00:04:56,200 Speaker 1: But then what's the message I suppose for the government 75 00:04:56,279 --> 00:04:58,960 Speaker 1: or for the powers that be? You know, when it 76 00:04:58,960 --> 00:05:01,719 Speaker 1: comes to the housing market. Right now, we understand the 77 00:05:01,720 --> 00:05:03,960 Speaker 1: mortgage rates are changing, but by the sounds of it, 78 00:05:04,040 --> 00:05:07,160 Speaker 1: the cost to construct a new home is going up. 79 00:05:07,200 --> 00:05:09,320 Speaker 1: It's getting tougher and tougher for people to enter the 80 00:05:09,360 --> 00:05:10,080 Speaker 1: housing market. 81 00:05:11,760 --> 00:05:16,720 Speaker 2: Yeah, So basically, from a housing wearying point of view, 82 00:05:17,160 --> 00:05:19,440 Speaker 2: we need to fast track some of these plans where 83 00:05:19,480 --> 00:05:23,840 Speaker 2: you have to have affordable housing, more affordable housing. We 84 00:05:23,880 --> 00:05:26,960 Speaker 2: need to have the labor issues sorted out. It's easier 85 00:05:27,000 --> 00:05:31,960 Speaker 2: said than done, is all term measures. Fast tracking is 86 00:05:32,000 --> 00:05:36,040 Speaker 2: not easy. But government definitely has some plans in terms 87 00:05:36,080 --> 00:05:41,240 Speaker 2: of looking at both development, looking at technology improvements. With that, 88 00:05:41,800 --> 00:05:45,520 Speaker 2: hopefully there would be influx of people coming in. As 89 00:05:45,920 --> 00:05:49,880 Speaker 2: that happens, the retail market could also boost, So we 90 00:05:50,000 --> 00:05:54,520 Speaker 2: need to bear in mind how we cater to these 91 00:05:55,120 --> 00:05:58,560 Speaker 2: people are coming in interstate. But saying that, if you 92 00:05:58,640 --> 00:06:01,320 Speaker 2: really look at the population of NTY over the last 93 00:06:01,320 --> 00:06:05,719 Speaker 2: ten years, it does not increased, so primarily because there's 94 00:06:05,760 --> 00:06:10,560 Speaker 2: an offset coming the people live in the territory and 95 00:06:10,600 --> 00:06:15,440 Speaker 2: going interstate. So from an economy point of view, it's 96 00:06:15,600 --> 00:06:23,839 Speaker 2: very important that we retain the population here by creating 97 00:06:24,040 --> 00:06:29,839 Speaker 2: employment opportunities and with that the infrastructure and housing is 98 00:06:29,839 --> 00:06:33,520 Speaker 2: a definitely very important component of that infrastructure. 99 00:06:33,839 --> 00:06:36,080 Speaker 1: Yeah, you spot on. I mean it's something that we 100 00:06:36,120 --> 00:06:38,600 Speaker 1: talk about so often. Even when we talk about places 101 00:06:38,640 --> 00:06:42,919 Speaker 1: like Catherine and retaining and getting teaching staff and for 102 00:06:43,040 --> 00:06:46,880 Speaker 1: other different industries as well, housing is so often part 103 00:06:46,920 --> 00:06:47,839 Speaker 1: of that discussion. 104 00:06:49,240 --> 00:06:53,880 Speaker 2: Absolutely, Catherine Alice Springs is all included. Yeah, it has 105 00:06:53,920 --> 00:06:59,880 Speaker 2: to be a broad based development taking place. So it's 106 00:07:00,080 --> 00:07:03,159 Speaker 2: it's not a one singular thing that can impact housing. 107 00:07:03,240 --> 00:07:06,320 Speaker 2: It's it's it's whole gamut of hole. There are lots 108 00:07:06,320 --> 00:07:10,000 Speaker 2: of variables. Will we will come into play. Of course, 109 00:07:10,440 --> 00:07:13,800 Speaker 2: as we started by talking about the interest rates, we 110 00:07:13,840 --> 00:07:16,720 Speaker 2: need to keep an eye on the rates and possibly 111 00:07:18,600 --> 00:07:21,520 Speaker 2: enter the market at the right time. There are some 112 00:07:21,880 --> 00:07:27,119 Speaker 2: properties which are still going which at an affordable level comparatively, 113 00:07:27,720 --> 00:07:33,680 Speaker 2: so timing what's what's in the interest rates up until 114 00:07:33,680 --> 00:07:37,520 Speaker 2: about first quarter next year, if we are looking at 115 00:07:37,560 --> 00:07:40,960 Speaker 2: another possibly a seventy five or a one hundred basis 116 00:07:40,960 --> 00:07:46,000 Speaker 2: point increase, so we need to we need to, you know, 117 00:07:46,400 --> 00:07:48,840 Speaker 2: keep an eye on all these variables. 118 00:07:48,960 --> 00:07:52,480 Speaker 1: Yeah, one hundred percent. Well askwend Silver. I really appreciate 119 00:07:52,480 --> 00:07:54,440 Speaker 1: your time this morning. Thank you so very much for 120 00:07:54,440 --> 00:07:55,440 Speaker 1: having a chat with us. 121 00:07:56,520 --> 00:07:57,480 Speaker 2: Pleasure is all mine. 122 00:07:57,600 --> 00:07:58,520 Speaker 1: Thank you.