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Speaker 1: This podcast is brought to you by Domain Summer's coming

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Speaker 1: constant refreshing or juggling tabs. Finding your next home made easy.

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Speaker 1: is the Daily OS.

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Speaker 2: This is the Daily ohs oh now it makes sense.

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Speaker 1: Good morning and welcome to the Daily OS. It's Sunday,

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Speaker 1: the nineteenth of October. I'm Zara Sidler, I'm Sam Kazlowski.

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Speaker 1: Every week it feels like there's another headline about the

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Speaker 1: housing market in Australia.

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Speaker 2: We are in the groups of a housing crisis, with rents.

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Speaker 1: For units and houses hitting record levels. On today's episode,

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Speaker 1: we're going to unpack what the numbers actually tell us

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Speaker 1: about the state of Australia's rental market and the innovative

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Speaker 1: way young ossies are approaching the affordability the issue.

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Speaker 3: Now, Zara, just before we jump into this, This explainer

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Speaker 3: has been produced with support from Domain Yeah. As always,

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Speaker 3: TDA has independently written and produced all editorial content for

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Speaker 3: this podcast without any other editorial influence, so Zara, why

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Speaker 3: don't we start this chat with my TikTok feed.

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Speaker 1: It's a natural starting point.

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Speaker 3: It's full of it's got some AFL highlights, there's a

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Speaker 3: bit of live music, but there's also videos of people

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Speaker 3: around the country in hours long waiting lines waiting to

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Speaker 3: see rentals. It's particularly bad in the capital cities like Sydney.

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Speaker 3: Is the rental market the worst it's ever been? Or

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Speaker 3: is that just the social media perception of the rental market.

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Speaker 1: Yeah, it's a really interesting question and a good place

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Speaker 1: to start this explanation, and it's not just your algorithm.

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Speaker 1: I have been seeing those videos everywhere and it does

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Speaker 1: feel like it's, you know, the worst it's ever been.

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Speaker 1: The interesting thing, though, is that rental prices actually haven't

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Speaker 1: gotten worse. In fact, there's new data from Domain that

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Speaker 1: shows that national rental prices have actually plateawed.

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Speaker 3: Right which stayed the same.

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Speaker 1: Yeah, which I was really shocked by because when you

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Speaker 1: see video after video, you kind of build this perception

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Speaker 1: in your mind. The report that I'm talking about from

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Speaker 1: Domain says that the market's entered what it calls a

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Speaker 1: new phase, and Domain's chief of research and economics names.

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Speaker 1: Doctor Nikola Powell said it offers rents a rare moment

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Speaker 1: of stability, and she's called it a much needed pause.

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Speaker 1: So this idea of what we're seeing of, you know,

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Speaker 1: rental prices being at record highs and continuing to grow,

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Speaker 1: what we're saying is the evidence actually shows us we're

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Speaker 1: staying at the same level.

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Speaker 3: The information is really surprising to me because everyone I

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Speaker 3: talked to is really struggling to find an affordable place

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Speaker 3: to live. So it's kind of calnterintuitive.

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Speaker 1: It is, really and I was going to say that

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Speaker 1: the trend that the report finds does need to be

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Speaker 1: understood within a broader context. We're not jumping on this

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Speaker 1: mic and telling you everyone who wants to rent a home,

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Speaker 1: it's really available, it's really affordable, and it's all in

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Speaker 1: your head. That's absolutely not the case. Rents are still

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Speaker 1: at record levels across most of the country and there

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Speaker 1: are millions of ausies, I'm sure, many of whom are

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Speaker 1: listeners who are still struggling to afford rent. Cost of living,

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Speaker 1: of course, has also gone up overall, and that influences

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Speaker 1: the rental market as well. We've had a sustained period

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Speaker 1: of really high rental prices, and so I guess what

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Speaker 1: I just want to make clear is that this report

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Speaker 1: is basically saying that in the September quarter. So my

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Speaker 1: brain doesn't work in quarters, So I'm just going to

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Speaker 1: explain what that means. That means between July and September,

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Speaker 1: during that time, we saw a stabilization of those prices

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Speaker 1: rather than a further increase. So that doesn't change the

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Speaker 1: fact that we still went through that period of really

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Speaker 1: sudden and quite you know, significant increases. So we are

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Speaker 1: operating at a really high level here.

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Speaker 3: It feels really abstracts all talk about the decreases and

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Speaker 3: increases and this idea of stabilization when we don't actually

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Speaker 3: know the numbers we're talking about. Yeah, talk me through

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Speaker 3: some of the average weekly rents so I can get

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Speaker 3: a sense of what people around the country are.

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Speaker 1: Paying right now. Obviously Australia is a big country. I

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Speaker 1: don't need to tell anyone that, and rent price has

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Speaker 1: changed depending on where you live. There is no prize

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Speaker 1: for guessing the most expensive capital city. It is Sydney.

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Speaker 1: We feel it here every single day, the media and

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Speaker 1: asking price across all age groups for a rental apartment

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Speaker 1: in Sydney in the September quarter was seven hundred and

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Speaker 1: fifty dollars. That is up just ten dollars from seven

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Speaker 1: hundred and forty in the June quarter. Where do you

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Speaker 1: think the second most expensive city for a rental unit

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Speaker 1: in Australia is?

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Speaker 3: Well, I feel like if I go to my algorithm,

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Speaker 3: I feel like it's Melbourne.

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Speaker 1: Your algorithm is letting you down here. Yeah, it's actually Brisbane, right,

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Speaker 1: I was quite shocked by that. The median unit rental

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Speaker 1: price in bris Vegas in the last quarter was six

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Speaker 1: hundred and thirty dollars. Again, just make clear that's one

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Speaker 1: hundred dollars more than one hundred dollars behind Sydney, but

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Speaker 1: it is second. Yeah, and Melbourne was next on the

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Speaker 1: list at five hundred and seventy five dollars, which was

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Speaker 1: the same price as the previous quarter.

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Speaker 3: So talk me through them. The other end of the spectrum,

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Speaker 3: where is it the cheapest to rent in Australia.

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Speaker 1: Yes, so that would be in Hobart Tazzy, where you're

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Speaker 1: looking at a median rental asking price of about four

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Speaker 1: hundred and ninety dollars, which is actually lower than it

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Speaker 1: was the previous quarter. Great news for our tazzy listeners.

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Speaker 3: And I know there will be listeners as well who

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Speaker 3: live in sharehouses and they're not in the unit market.

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Speaker 3: I spent three or four of my best use of

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Speaker 3: my life in an eight bedroom sharehouse.

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Speaker 1: We have some excellent memories in that house.

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Speaker 3: What's the state of play for those larger properties that

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Speaker 3: are being rented.

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Speaker 1: Yeah, so, look, it's basically the same picture of stability

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Speaker 1: of those prices remaining where they were. So if we

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Speaker 1: look at rental prices for houses, prices have an increased

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Speaker 1: quarter on quarter in Sydney, Melbourne, Adelaide, Perth or Camera.

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Speaker 1: So instead of those historically huge increases, we are just

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Speaker 1: seeing way more steadiness.

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Speaker 3: Let's get out the crystal ball. I know that's always

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Speaker 3: a bit of a risky exercise. Are we expecting those

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Speaker 3: rental prices to remain stable now in the future.

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Speaker 1: Yeah, Look, it is obviously impossible to predict where we'll go.

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Speaker 1: I don't know that anyone quite predicted where we would

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Speaker 1: be right now. Again, drawing from doctor Nicola Powell from Domain,

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Speaker 1: she makes the point that it's possible that we could

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Speaker 1: see an easing off of rental demand as more people

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Speaker 1: transition into home ownership.

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Speaker 3: Which is again kind of counterintuitive to the narrative that's

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Speaker 3: out there about how easy it is for people to

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Speaker 3: buy homes.

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Speaker 1: It is, but Powell is saying that because of something

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Speaker 1: else we've spoken about on this podcast, which is that

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Speaker 1: the government has made it possible for first home buyers

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Speaker 1: to buy a home with a five percent deposit. And

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Speaker 1: so basically what she's saying is looking into the future,

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Speaker 1: we're not saying right now there's going to be an

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Speaker 1: immedia change, but looking into the future, it is likely

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Speaker 1: that more people will be able to break into the

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Speaker 1: housing market because you can get in with a five

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Speaker 1: percent deposit for some people, and that that could ease

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Speaker 1: rent demand over time, right, And so the idea is that,

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Speaker 1: you know, hopefully that eases the kind of pressure that

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Speaker 1: we're seeing in those very long lines where there's not

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Speaker 1: enough properties for the number of people who need a home.

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Speaker 3: So let's have a think about the state of play.

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Speaker 3: We've come off a period of rental prices increasing and

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Speaker 3: we're hopefully.

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Speaker 1: Really significantly increasing.

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Speaker 3: Yeah, but we're hopefully entering this new period of more

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Speaker 3: stable prices with if there's more people buying houses, demand

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Speaker 3: could then be a bit easier and those lines could

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Speaker 3: get a bit shorter.

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Speaker 1: You can't see it, but we're crossing fingers. Yes this

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Speaker 1: is the limitation of an audio platform, but yes, crossing

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Speaker 1: fingers that that is what happens.

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Speaker 3: But even with crossed fingers, the point here is really

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Speaker 3: also that those prices are stabilizing at a really high point.

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Speaker 1: Yeah, it's really important to really make clear here. We

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Speaker 1: can't look at these figures in isolation and just see

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Speaker 1: that kind of in line start to plateau. They exist

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Speaker 1: in a really important context, which is that the rental

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Speaker 1: market has been incredibly unaffordable for so many Australians for

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Speaker 1: so long. Now. We have some figures on that from

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Speaker 1: social advocacy group Anglicare Australia, whose latest report found that

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Speaker 1: essential workers are essentially being priced out of the rental

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Speaker 1: market nationwide. That rental Affordability Snapshot analyzed more than fifty

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Speaker 1: thousand rental listings against sixteen jobs and it basically found

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Speaker 1: that rental affordability has gone backwards across much of the country,

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Speaker 1: with nurses, tradees and hospo workers now locked out of

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Speaker 1: most rentals. So it found that less than two percent

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Speaker 1: of available listings were affordable for an aged care worker,

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Speaker 1: a nurse, or an early childhood educator. And I think

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Speaker 1: that that's just an important bit of context to add

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Speaker 1: to any discussion about prices. It's not abstract for so many,

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Speaker 1: it is the reality, and we need to understand what

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Speaker 1: that looks like and what that feels like in context.

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Speaker 3: I think that's a really interesting perspective to be highlighting

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Speaker 3: in this conversation. It's not often we cut up this

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Speaker 3: sort of housing data by profession. I think it's a

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Speaker 3: valuable way to look at it. I'm left wondering about

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Speaker 3: young Australians and how they're approaching this situation. Yeah, that's

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Speaker 3: now really enshrined in the psyche of young lossies.

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Speaker 1: Yeah. Look, one interesting thing that I've seen coming up

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Speaker 1: a lot, and just to bring this full circle back

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Speaker 1: to our for you pages, is this concept of a

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Speaker 1: financial gap year.

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Speaker 3: You'll see I know I haven't had.

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Speaker 1: We have different algorithms, but essentially it's this idea of

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Speaker 1: moving away from major cities to a regional or a

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Speaker 1: rural place, gotcha with more affordable housing and a lower

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Speaker 1: cost of living, essentially to be able to save money.

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Speaker 1: So you know, gap years traditionally have been like go overseas,

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Speaker 1: spend all your money. This is turning it on its

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Speaker 1: head and it's basically what a lot of people did

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Speaker 1: during COVID, you know, when work from home became a thing,

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Speaker 1: people moved out of the capital cities. But it now

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Speaker 1: has this you know gen z name to a financial

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Speaker 1: gap year. There are a bunch of people who have

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Speaker 1: talked about their experiences doing this on the internet. One

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Speaker 1: who caught my eye. You might be familiar with him.

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Speaker 1: His name's Tim Abbots. Of course. Yeah, he's really taken

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Speaker 1: people along on this journey. So he moved from Sydney

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Speaker 1: to outback Queensland. He swapped his corporate job in digital

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Speaker 1: marketing for working on a farm where the closest town

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Speaker 1: has five hundred residents. A bit of a change of pace.

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Speaker 3: And he's really open about his numbers, right he is.

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Speaker 1: He says that, you know, he made the move for

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Speaker 1: financial reasons, and he says before he left there was

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Speaker 1: a three year period where his rent in Sydney doubled, doubled,

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Speaker 1: and he said that since moving, his cost of living

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Speaker 1: expenses have decreased by seventy five to eighty percent. Yeah,

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Speaker 1: so look I don't know if this is going to

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Speaker 1: be a trend that we see across our cohort. I

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Speaker 1: don't know if this is just a few people who

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Speaker 1: are trialing something, but it is interesting to consider, like

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Speaker 1: would you take a financial gap year.

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Speaker 3: I think I'm very much wedded to my beautiful city

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Speaker 3: of Sydney. But what I have had more conversations about

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Speaker 3: with my friends is whether we would be open to

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Speaker 3: living with another couple so far.

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Speaker 1: I was actually listening to a podcast about this this morning.

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Speaker 3: Yeah, I think it's becoming more and more common to

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Speaker 3: look at ways in which to bring down the prices

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Speaker 3: in the big cities, even when the traditional milestones of

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Speaker 3: the Australian dream is that if you're in a serious relationship,

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Speaker 3: I just got married.

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Speaker 1: I don't know if we can keep saying just it was.

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Speaker 3: I know, it's quite a while. It feels like yesterday

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Speaker 3: that weather we would consider living with friends, Yeah, even

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Speaker 3: you know, considering living with more than one other couple. Yeah,

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Speaker 3: and I find that really really interesting.

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Speaker 1: Yeah, look, it's really interesting. There are lots of really

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Speaker 1: innovative ways that young Australians are dealing with what is

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Speaker 1: a very hard set of circumstances. But I guess just

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Speaker 1: around out this chat, there is this like silver lining

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Speaker 1: that we are seeing, which is that we are experiencing,

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Speaker 1: at least for now, some stability, and I think that's

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Speaker 1: pretty welcome news for anyone that has tried to crack

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Speaker 1: into the rental market anywhere across this country.

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Speaker 3: I really got that date on where things are situated

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Speaker 3: for Australian renters. Zara, thanks so much, thank you, and

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Speaker 3: that's all we've got time for on this special Sunday

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Speaker 3: edition of The Daily Ods. We're going to be back

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Speaker 3: in your ears tomorrow morning. Until then, have a beautiful

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Speaker 3: end to the weekend.

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Speaker 1: This podcast was brought to you by Domain and today

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Speaker 1: I'm joined by domains chief of Research and Economics, doctor

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Speaker 1: Nicola Powell. Doctor Powell, thank you for joining TDA. Why

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Speaker 1: is it that we are seeing rental prices stabilize now?

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Speaker 2: I think it really does demonstrate that rental affordability ceilings

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Speaker 2: have been reached. I think ultimately we have seen rents

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Speaker 2: escalate at record pace over the past few years, far

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Speaker 2: greater than what we've seen in wage growth. And I

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Speaker 2: think that many households just simply can't keep up and

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Speaker 2: I think we've naturally hit that price ceiling. I think

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Speaker 2: as well, within the rental space, it's a really interesting

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Speaker 2: dynamic when you look at household formation as well. I

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Speaker 2: think that what we are seeing and more people are

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Speaker 2: coupling up or they're getting a housemate going into a

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Speaker 2: house share, so we're seeing household sizes actually increase, and

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Speaker 2: I think there's some probably some extreme examples where some

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Speaker 2: people have just moved back into the family home because

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Speaker 2: it's just become so expensive. But I think as well,

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Speaker 2: one of the interesting dynamics that has really been something

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Speaker 2: quite poignant this year is we have seen an increase

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Speaker 2: in investment activity. So ultimately what that is helping to

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Speaker 2: do is increase vacancy rates slightly. They still remain very competitive,

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Speaker 2: but I think all of those dimensions together are really

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Speaker 2: helping to stabilize rent prices.

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Speaker 1: I guess my follow up to that for all of

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Speaker 1: our young listeners listening on in Hope is are you

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Speaker 1: expecting this stabilization to continue or do you think that

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Speaker 1: this is just a blip.

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Speaker 2: I do think that we are going to continue to

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Speaker 2: see a better outlook in the rental space. It's interesting

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Speaker 2: because we've already got some suburbs that are pulling back

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Speaker 2: in asking rents, and my advice would be for anybody

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Speaker 2: looking to find a lease is to explore other suburbs.

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Speaker 2: Because we have uneven growth now across Australia's rental market

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Speaker 2: and even within capital cities, I think we're likely to

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Speaker 2: see investors still play a big role in housing dynamics.

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Speaker 2: So I do think we're going to continue to see

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Speaker 2: rental supply increase. But one of the most important new

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Speaker 2: policies or expanded policies, I should say, is the home

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Speaker 2: Guarantee scheme that is going to help some tenants transition

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Speaker 2: to being homeowners and in essence take away an element

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Speaker 2: of demand. So there are lots of factors going on

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Speaker 2: that I think are going to continue to help Australia's

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Speaker 2: rental market balance out. My name is Lily Madden and

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Speaker 2: I'm a proud Arunda Bunjelung Calcottin woman from gadigl Country.

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Speaker 2: The Daily oz acknowledges that this podcast is recorded on

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Speaker 2: the lands of the Gadigol people and pays respect to

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Speaker 2: all Aboriginal and Torres Strait Island and nation. We pay

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Speaker 2: our respects to the first peoples of these countries, both

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Speaker 2: past and present,