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Speaker 1: And we'll get straight into it because we know that

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Speaker 1: Australian dwelling values rose another zero point five percent in May,

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Speaker 1: taking the national index well one point seven percent higher

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Speaker 1: over the first five months of the year. The gains

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Speaker 1: were broad based, with every capital city posting a rise

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Speaker 1: of at least zero point four percent through the month.

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Speaker 1: Now joining me on the line to talk more about

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Speaker 1: the change in dwelling values is Cotalities head of Research,

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Speaker 1: Eliza Owen. Good morning to you, Eliza.

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Speaker 2: Good morning, thanks for having me.

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Speaker 1: Yeah, lovely to have you on the show. Now, Eliza,

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Speaker 1: can you talk me through the value changes across our

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Speaker 1: capital cities.

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Speaker 2: Sure? So, as you mentioned, over the month of May,

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Speaker 2: we saw a point five percent increase in home values

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Speaker 2: nationally and it was a broad based uplift, with each

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Speaker 2: capital city rising at least zero point four percent in

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Speaker 2: the month. Darwin actually stood out as the top four

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Speaker 2: am in the month of May, with values rising a

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Speaker 2: whopping one point six percent, leaving them about five percent

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Speaker 2: or sorry, six percent higher since the start of the year.

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Speaker 2: So at this stage it kind of looks like Darwin

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Speaker 2: is actually leading the pack when it comes to our

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Speaker 2: capital city market.

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Speaker 1: Wow, I mean that's good news for us if you're

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Speaker 1: a home owner, I guess if you're in the market

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Speaker 1: wanting to buy a home, it might be a little

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Speaker 1: bit tougher to hear. But what's behind that momentum that

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Speaker 1: we're seeing in the Northern territory firs se So.

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Speaker 2: It's coming off the back of a pretty subdued period,

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Speaker 2: I would say for the Darwin market. Darwin is really

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Speaker 2: the only market of the capital cities that is still

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Speaker 2: down from Hives back in twenty fourteen, which was associated

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Speaker 2: with sort of the rise of the Chinese economy and

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Speaker 2: the iron ore boom and the resources boom. So I

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Speaker 2: think it's coming off a low base than a slower

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Speaker 2: piece of growth historically. And that also means that while

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Speaker 2: other capital city values have been pushed up significantly in

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Speaker 2: recent years, Darwin has remained one of the relatively affordable capitals,

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Speaker 2: with a median dwelling value of about five hundred and

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Speaker 2: twenty six thousand dollars. So what it does mean though,

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Speaker 2: so just was going to add that, as you say,

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Speaker 2: it kind of flips the script for first term buyers

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Speaker 2: or people who are looking to get back into ownership

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Speaker 2: because now it's rising, so rapidly. We've seen a substantial

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Speaker 2: increase ince the start of this year.

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Speaker 1: Yeah, right, So obviously those values are going up. But

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Speaker 1: when you talk about, you know, our home values comparatively

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Speaker 1: to some of the other capital cities around Australia in

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Speaker 1: terms of the actual price, we're we're still much more affordable,

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Speaker 1: aren't we than those other capitals cities.

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Speaker 2: Yeah, So to put it in perspective, the median house

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Speaker 2: value across the capital city markets is currently one million

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Speaker 2: and twenty five thousand, So it's not just Sydney that's

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Speaker 2: a million dollar market anymore. It's pretty common to find

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Speaker 2: million dollar properties across the capitals. But for Darwin the

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Speaker 2: median house value is six hundred and thirteen thousand at

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Speaker 2: the end of May. So for people who are looking

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Speaker 2: to maybe retire and get the most out of the

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Speaker 2: sale from a home and purchase something out right, Darwin

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Speaker 2: looks really good. Or for people who just want kind

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Speaker 2: of the really unique and wonderful lifestyle that Darwin has

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Speaker 2: to offer. Property prices are relatively affordable compared to other

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Speaker 2: capital cities.

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Speaker 1: How big an impact has the right cut had and

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Speaker 1: potential of the right cuts, so I.

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Speaker 2: Think it's had a pretty substantial impact, particularly this month,

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Speaker 2: with the one point six percent growth rate being the

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Speaker 2: strongest increase for Darwin so far this year, and this

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Speaker 2: is coming off the back of seven consecutive months of growth.

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Speaker 2: So when interest rates are cut, it makes housing look

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Speaker 2: more attractive because people can essentially get more access to finance.

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Speaker 2: It also makes it a good time for people to

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Speaker 2: sell their property because more buyers come into the market.

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Speaker 2: But I think there's an added layer here of interest

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Speaker 2: rate cuts in twenty twenty five signaling the end to

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Speaker 2: a high insallationary high interest rate period that has really

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Speaker 2: had a substantial boost in confidence for households and makes

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Speaker 2: them more confident in big ticket purchases like housing, Eliza.

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Speaker 1: In terms of Darwin and the stock that's available, do

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Speaker 1: we have a lot of stock ready to go on

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Speaker 1: the market or are we quite limited?

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Speaker 2: Well, I think think at the moment we are seeing

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Speaker 2: stock levels rise a little bit, so the flow of

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Speaker 2: new listings has started ticking up. But longer term, the

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Speaker 2: level of total listings on the market has gradually been

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Speaker 2: tightening because it was such a slow market for such

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Speaker 2: a long time. So no doubt with this pickup in

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Speaker 2: growth we'll start to see more sellers decide to put

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Speaker 2: their properties on the market, And.

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Speaker 1: In terms of like, looking at those annual trends, how

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Speaker 1: are we tracking and even with our prices, you know,

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Speaker 1: comparatively to what we might have seen ten years ago.

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Speaker 2: So property prices over the past twelve months across Darwin

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Speaker 2: it's been a little more of a kind of subdued

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Speaker 2: growth rate, so sitting at about four percent. Mind you,

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Speaker 2: that is higher than the national figure, which is an

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Speaker 2: annual growth rate of three percent. But obviously this is

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Speaker 2: quite different to the boom and bus conditions of the

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Speaker 2: early to mid twenty tens, where it wasn't uncommon to

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Speaker 2: see you know, double digit growth in a single year

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Speaker 2: and then followed by a really wrong period of decline

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Speaker 2: between twenty nineteen and twenty twenty.

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Speaker 1: Now, in terms of some of the standouts for the

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Speaker 1: Northern Territory, are you like, I'm not sure whether this

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Speaker 1: element of research looked into which suburbs or which areas

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Speaker 1: sort of doing the best at this point in time.

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Speaker 2: So we do measure different sub markets of the NT.

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Speaker 2: It is a small market, so it can be hard

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Speaker 2: to go month to month on some of those trends.

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Speaker 2: But if we look at say annual growth rates, the

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Speaker 2: highest performing region was Palmerston and that market has actually

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Speaker 2: come up almost nine percent in the past year. There's

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Speaker 2: also a big range, so on the other end of

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Speaker 2: the spectrum, you've got Alice Springs where values were down

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Speaker 2: six percent in a twelve month period. But even for

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Speaker 2: a market like Alice Springs which has shown weaker kind

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Speaker 2: of capital growth performance, we tend to see things like

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Speaker 2: rent yields are very high because there's a lot of

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Speaker 2: demand for rental properties. The purchasing price is quite cheap,

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Speaker 2: and with the reduction in interest rates, that might create

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Speaker 2: further interest in these markets from both an owner occupier

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Speaker 2: and investment perspective.

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Speaker 1: And what about across the rest of the Northern Territory

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Speaker 1: when you look at those rental yields.

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Speaker 2: So for the Darwin market, we're looking at a gross

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Speaker 2: rent yield of just under seven percent, which is huge

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Speaker 2: when you consider that the combined capitals is about three

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Speaker 2: and a half percent. For regional n T it's even

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Speaker 2: stronger just because you've got relatively cheap purchase prices. So

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Speaker 2: I think for investors there could be some incentive to

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Speaker 2: get back into the market, particularly because we're at a

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Speaker 2: point now where other capital cities have seen such strong

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Speaker 2: price increases that they may not see as much further

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Speaker 2: value add So I guess in a sense, the NT

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Speaker 2: has room to grow. And you've got really strong rent

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Speaker 2: yields of just under seven percent in Darwin and in

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Speaker 2: regional NT it's just under eight cent and Eliza.

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Speaker 1: When you look at other regional locations around Australia, I mean,

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Speaker 1: how does Darwin sort of compare or what's happening in

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Speaker 1: some of the regions. Are we seeing a bit more

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Speaker 1: growth than maybe what we've seen in previous years.

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Speaker 2: That's a great question, and I think it relates to

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Speaker 2: some of the appeal in the NT and Darwin market

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Speaker 2: as well. What we're seeing is that regional Australia has

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Speaker 2: generally seen better performance than the capital cities through the

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Speaker 2: start of twenty twenty five. So if we look at

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Speaker 2: the year to date, the combined capital's market is up

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Speaker 2: one point four percent, Regional Australia is up to point

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Speaker 2: six percent, so it's almost double the growth rate. I

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Speaker 2: think it's because, again coming back to price point, if

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Speaker 2: you look at the combined capital house market, we talked

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Speaker 2: about a median house value being over a million dollars.

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Speaker 2: For the combined regional market of Australia, a median house

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Speaker 2: value is only six hundred and ninety four thousand, and

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Speaker 2: of course, as we've discussed cheaper in the NT. Still

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Speaker 2: we're also seeing in migration trends less people are leaving

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Speaker 2: the regions, so that means you've got higher levels of

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Speaker 2: demand holding up in the NT in regional Australia as well.

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Speaker 1: So from your perspective, Aliza, what are the key takeouts

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Speaker 1: for our listeners today when you look at all these

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Speaker 1: numbers and when you look at what's happening for the

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Speaker 1: Northern territor.

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Speaker 2: Tray, So, the Northern Territory is kind of re emerging

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Speaker 2: as quite a decent growth market after a long period

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Speaker 2: of relatively subdued performance. That means if you're interested in

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Speaker 2: selling your property, it could be a good time to

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Speaker 2: start following the market of course, talking to local real

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Speaker 2: estate professionals in your area and maybe thinking because this

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Speaker 2: could be a good opportunity to sell. I think it's

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Speaker 2: also a reflection of people seeing the kind of value,

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Speaker 2: the great lifestyle that Darwin has to offer and ultimately

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Speaker 2: how more affordable markets tend to benefit in the current

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Speaker 2: environment of reduced interest rates well catalities.

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Speaker 1: Head of Research, Eliza Owen. Great to speak with you

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Speaker 1: this morning. Thanks so much for joining us on the show.

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Speaker 2: Of course, thanks for having me.

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Speaker 1: Thanks, thanks, you two