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Speaker 1: But in some good news. Home prices have hit a

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Speaker 1: record high in March. That's according to the latest home

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Speaker 1: price index data by prop Track and Aria Group. Nationally,

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Speaker 1: home prices rose zero point two seven percent, putting them

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Speaker 1: three point nine one percent higher than a year ago.

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Speaker 1: Darwin saw monthly growth of zero point three four percent,

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Speaker 1: with annual growth sitting around three point seven eight percent.

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Speaker 1: Joining us on the line to break it down further

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Speaker 1: is Aria Group senior economist and Flattery. Good morning to.

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Speaker 2: You, Anne, good morning, lovely.

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Speaker 1: To have you on the show now, and tell us

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Speaker 1: a little bit more about this data. What do the

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Speaker 1: latest home value figures mean for Darwin.

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Speaker 2: Well, it's good news for people who own a home

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Speaker 2: in Darwin. We did see those home values hit a

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Speaker 2: new record high this month. We've seen really quite strong

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Speaker 2: growth over the months. Darwin's actually been one of the

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Speaker 2: best performing capital cities right.

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Speaker 1: So talk us through some of those numbers and what

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Speaker 1: areas have done a little bit better.

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Speaker 2: So the areas that have done the best tend to

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Speaker 2: be those slightly more affordable suburbs, areas that are sort

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Speaker 2: of further away from the inner city Darwin area. So,

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Speaker 2: for example, suburbs like Mulden and Gray and Woodrock have

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Speaker 2: seen double digit growth. Mulden's actually been the best performing

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Speaker 2: suburb over the year. We've seen prices there rise by

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Speaker 2: a staggering twenty percent year on year.

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Speaker 1: Yeah. Right, And then I suppose those those Palmerston areas

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Speaker 1: look ause they've gone up quite a bit. Then you

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Speaker 1: go into the single figures as you as you head

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Speaker 1: a little closer to town, Stuart Park for example, up

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Speaker 1: eight point three percent.

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Speaker 2: Yeah, that's right. So we've seen really very strong growth

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Speaker 2: across the board. I think one of the reasons why

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Speaker 2: we're seeing some of those more affordable areas record even

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Speaker 2: stronger price growth is to do with affordability. Of course,

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Speaker 2: even though Darwin's relatively affordable compared to a lot of

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Speaker 2: other capitals, we are seeing increasing number of home buyers,

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Speaker 2: particularly first home buyers, who are being priced out of

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Speaker 2: a greater range of suburbs. And what that means is

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Speaker 2: we're seeing a greater percentage of the total bier pool

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Speaker 2: actually competing for homes in suburbs that are still a

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Speaker 2: bit more affordable. And then of course that increases demand,

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Speaker 2: which pushes the price growth up higher in those areas.

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Speaker 1: So an tell us a little bit more about what

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Speaker 1: these latest home value figures mean, you know, for Darwin

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Speaker 1: and the Greater Darwin area.

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Speaker 2: Well, I think what it's showing is that with prices

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Speaker 2: hitting a new record high, you know, one of the

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Speaker 2: reasons we're seeing this is that the population growth we've

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Speaker 2: seen in Darwin has actually exceeded the speed at which

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Speaker 2: we're building new homes. If we look at the last

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Speaker 2: two years alone, across the Northern Territory as a whole,

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Speaker 2: we built less than half the homes that we needed

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Speaker 2: over a two year period. So what that means is

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Speaker 2: that we're seeing relatively more competition for those homes that

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Speaker 2: are coming up for sale or are being developed, and

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Speaker 2: of course that's what's really pushing those prices to rise

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Speaker 2: so quickly.

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Speaker 1: Yeah, right, because it doesn't feel for us here in

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Speaker 1: Darwin like there's been a massive population growth, you know,

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Speaker 1: And I think that point that you're making about there

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Speaker 1: not being a huge amount of stock on the market

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Speaker 1: or homes not being built at the level that they

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Speaker 1: might be required, that's like, that is a really interesting

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Speaker 1: thing to take into account.

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Speaker 2: Absolutely, and just spot on the population growth in Darwin

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Speaker 2: hasn't been anywhere close to what we've seen in a

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Speaker 2: few of our other capital cities, particularly Perth and Melbourne.

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Speaker 2: But even when you see a little bit of population growth,

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Speaker 2: you do need that housing supply to pick up in

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Speaker 2: line with that. And even with the level of growth

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Speaker 2: we've seen in Darwin's population, as I said, less than

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Speaker 2: half the homes that we need have been built over

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Speaker 2: the past two years. So in a market that's relatively

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Speaker 2: smaller like Darwin, that can have a massive impact.

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Speaker 1: Yeah, Now in terms of the unit market, how are

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Speaker 1: things going in that space?

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Speaker 2: Look, units have underperformed houses over the past twelve months. Predominantly,

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Speaker 2: we do see the vast bulk of demand for houses

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Speaker 2: across Darwin. Having said that, we're really starting to see

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Speaker 2: unit price growth pickup, and I think one of the

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Speaker 2: reasons for that is that at the moment, it's very

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Speaker 2: expensive to develop new housing. It tends to be more

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Speaker 2: feasible for developers to build houses in the current market,

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Speaker 2: so we're not really seeing the same supply of new

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Speaker 2: unit being built, especially those units that are priced at

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Speaker 2: the affordable end. So a lot of those unit projects

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Speaker 2: aren't sustainable and that means that for those buyers who

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Speaker 2: have been priced out of purchasing a house. The supply

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Speaker 2: of affordable units is actually quite minimal compared to the

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Speaker 2: demand that's out there, and I think that could drive

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Speaker 2: a bit of a stronger performance in the unit market

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Speaker 2: over the coming year.

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Speaker 1: So when it comes to some of the challenges that

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Speaker 1: are impacting the market in Darwin at the moment, what

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Speaker 1: are they look.

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Speaker 2: I think it's just building enough new homes to meet

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Speaker 2: population growth. It really comes down to that, and I

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Speaker 2: think that there's a few issues there. First of all,

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Speaker 2: building costs still extremely high. We have a labor shortage,

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Speaker 2: and the result of that is that because of where

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Speaker 2: prices are sitting in due and often for developers, a

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Speaker 2: project might not be feasible to build with building costs

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Speaker 2: currently where they are. So the under supply that we've

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Speaker 2: seen in new development activity, I think it's going to worsen,

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Speaker 2: and I think that that points that even higher property

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Speaker 2: prices throughout the remainder of this year.

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Speaker 1: Yeah, right, So I guess if you're a seller, that's

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Speaker 1: good news, But if you're looking to purchase a home,

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Speaker 1: it's going to make it much more difficult.

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Speaker 2: Well, that's right, And you know, often when people are selling,

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Speaker 2: they're buying in the same market, so we tend to

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Speaker 2: see that. You know, unless you're someone who's looking to downsize,

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Speaker 2: it doesn't necessarily make too much of a difference. I think,

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Speaker 2: you know, there's certainly a strong level of demand out there,

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Speaker 2: so for someone who is looking to sell, you know,

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Speaker 2: it's not a bad time at all. But then, of

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Speaker 2: course if prices go even higher, you know, for some

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Speaker 2: people they might think it might be worth waiting a

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Speaker 2: little longer. But of course, as I said, it's really

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Speaker 2: difficult to time in the market, and in a sense

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Speaker 2: it's not really worth it if you're someone who's looking

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Speaker 2: to sell and then buy something else, because of course

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Speaker 2: you're competing in the same market conditions.

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Speaker 1: And I know you've sort of touched on some of

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Speaker 1: the other locations around Australia, but how are we really

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Speaker 1: comparing when you look at those house prices to other

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Speaker 1: parts of Australia, particularly some of those capital cities. But

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Speaker 1: then I suppose some of those locations it might be

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Speaker 1: a little bit more regional that are around our population size.

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Speaker 2: That's right. Look, as far as capital cities go, Darwin

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Speaker 2: is the most affordable city in Australia. So the median

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Speaker 2: home price across Greater Darwin is five hundred and twenty thousand.

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Speaker 2: That's for houses and units combined. The next most affordable

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Speaker 2: city is Hobart, where prices are sitting at about six

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Speaker 2: hundred and set, so a much higher level compared to Darwin.

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Speaker 2: If we compare Darwin to say some of the bigger

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Speaker 2: regional centers around the country, that's more where you're seeing

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Speaker 2: pretty similar figures. But even then, I think that a

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Speaker 2: lot of those regional centers, particularly in places like New

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Speaker 2: South Wales and Queensland and Victoria, the medians are still

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Speaker 2: sitting higher there than Darwin. So from a buyer's perspective,

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Speaker 2: there is a lot of value in the Darwin market.

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Speaker 2: And from an investors perspective as well, the rents that

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Speaker 2: you get in Darwin are actually very high relative to

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Speaker 2: the cost of buying, so there's a lot of opportunity

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Speaker 2: in the Darwin market.

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Speaker 1: Well, Aria Group, senior economists and Flattery, it's lovely to

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

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Speaker 1: and your insight.

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Speaker 2: Thank you for having me.

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Speaker 1: Thank you