Formerly the “Property Planner, Buyer and Professor” podcast
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Show notes
1. Home Value Index Results
National Price Growth Slows: The annual growth rate has slipped to 6.7%, with all cities bar Darwin posting weaker increases than the previous month. Are we witnessing the start of a market-wide cooldown?
Perth’s hot market has cooled, with monthly growth dropping from 2% to 1.6%—the first slowdown in months. Is this the beginning of the end for Perth’s growth streak? The Trio ponder whether it’s listing numbers, tightening household savings, or interest rate pain that is contributing.
How long can the three top performers maintain this strength? And are they at their peak? Perth’s annualised growth is currently sitting at 24.4%, which is significant by any historical measures.
Source: CoreLogic
2. Listings
Taking the Reserve Board’s monthly press releases into account is important. Until we return our inflation numbers to a figure within the target band, our interest rate pain is likely to remain.
Property listings have surged, now tracking 8.8% above the 5-year average. Will this sudden influx of supply cool off the market even further, or is something else at play?
Net overseas migration is down 19% from record highs posted in 2023, while listings soar. Could this combination of factors reshape the market—and what does it mean for buyers, sellers and renters? The Trio overlay the listing figures that are amplifying the supply/demand imbalance.
3. Mean Reversion
Mike and Cate chat about mean reversion and some of the weaknesses of this popular argument. Just because Darwin hasn’t performed well over many years, does not mean that Darwin’s ‘turn’ is next. There is more to mean reversion than just labelling a slow performer ‘the next one’.
Source: CoreLogic
4. Rents
Rents Drop to 4-Year Low: Rental prices have tumbled in cities like Sydney, Brisbane and Canberra. What’s driving this shift and could this signal the end of the rental crisis or are we in for more turbulence ahead?
What could explain Hobart’s pattern? Rents have all come off the boil with the exception of Hobart. Cate has some insider insights….
Will pressure on rents continue to ease? As Dave mentions, household formation rates are playing a powerful role in the rental numbers also. Cate ponders the impact of student numbers and the effect on market segments, specifically inner-city apartments.
Source: Westpac Melbourne Institute
7. Lending Indicators
Investor loan commitments have surged to the highest levels since January 2022. But with Perth potentially slowing, are investors betting on the right markets?
And we’ve hit the highest number of new investor lending commitments Dave points out, “That was back when the cash rate was just 0.1%.”
Are first homebuyers getting enough support?
Shared equity… yeah/nah? The Trio chat about some of the government led initiatives that offer some support to first homebuyers.
Source: ABS
Gold Nuggets
Cate Bakos’s gold nugget: The rate of change of rental growth is easing and it will be interesting to see how this filters through into political policies.
David Johnston’s gold nugget: “Markets are cyclical. No market is always flying or always struggling. Have a long term plan when you’re buying property.”
Mike Mortlock’s gold nugget: When it comes to first homebuyer activity, it seems that we’re addicted to stimulatory stuff. But we don’t tend to have many policies that help with supply.
Resources
And if you’ve enjoyed this show, take a listen to these eps:
- 6 – What determines your Property Strategy
- 10 – Why your approach and assessment of risk is paramount to property success!
- 12 – Property Cycle Management – why now is always the best time to buy if it suits your personal economy and you have a long-term property plan
- 18 – When to hold and when to fold!
- 60 – Why established properties outperform
