Latest / 360 with Katie Woolf / Katie Woolf spoke with REINT CEO Quentin Killian regarding the increase in sales and rentals

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Katie Woolf spoke with REINT CEO Quentin Killian regarding the increase in sales and rentals · 360 with Katie Woolf

• 0:00
  Speaker 1: Have you heard much about people struggling to get into
• 0:03
  Speaker 1: the rental market at the moment? Or you know what
• 0:06
  Speaker 1: are you being told when it comes to sort of
• 0:08
  Speaker 1: buying and selling, or are you in the market for
• 0:11
  Speaker 1: buying a home and are you finding a little bit
• 0:13
  Speaker 1: more difficult than what you maybe did six months ago. Well,
• 0:16
  Speaker 1: joining us on the line to talk more about this
• 0:19
  Speaker 1: is the Real Estate Institute of the Northern Territory CEO
• 0:22
  Speaker 1: Quentin Killian.
• 0:23
  Speaker 2: Good morning, Quentin, Morning, Katie. Quentin.
• 0:25
  Speaker 1: I tell you what, there's a lot of discussion at
• 0:28
  Speaker 1: the moment, anecdotally about people struggling to get into the
• 0:32
  Speaker 1: rental market or struggling to find a rental Is this
• 0:36
  Speaker 1: just sort of hearsay or what are you you know,
• 0:39
  Speaker 1: what are you finding.
• 0:40
  Speaker 3: At the moment? Really that the market has changed very
• 0:43
  Speaker 3: dramatically and very quickly, pretty much since we opened the
• 0:48
  Speaker 3: borders up. So we've moved from a vacancy rate of
• 0:52
  Speaker 3: almost eight percent at the start of the year, so
• 0:54
  Speaker 3: it was around seven point eight seven point nine to
• 0:57
  Speaker 3: a vacancy rate that at our last report was around
• 1:02
  Speaker 3: about two percent, but anecdotally I'm hearing is probably more
• 1:06
  Speaker 3: likely to be at one percent. Or slightly under. So
• 1:09
  Speaker 3: we've basically turned around the entire rental market, and not
• 1:14
  Speaker 3: just the rental market, but the sales market within the
• 1:19
  Speaker 3: half year period of the pandemic, largely due to people. Well,
• 1:26
  Speaker 3: there's a lot of people returning, so a lot of
• 1:28
  Speaker 3: Territorians have decided they don't want to be down south
• 1:31
  Speaker 3: during this pandemic, so they've come home. But as the
• 1:35
  Speaker 3: Chief Minister pointed out, we're getting something akin to about
• 1:38
  Speaker 3: three hundred people a week that are coming across the
• 1:41
  Speaker 3: border doing their quarantine and then staying.
• 1:44
  Speaker 1: Wow.
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  Speaker 3: Now, when you put those sort of numbers into a
• 1:49
  Speaker 3: relatively small environment, because we're still talking a housing market
• 1:54
  Speaker 3: here with seventeen to twenty thousand properties under management, that
• 2:01
  Speaker 3: soaks up the stock very very quickly.
• 2:05
  Speaker 1: It certainly does Quentin. I mean, it would be unbelievable,
• 2:10
  Speaker 1: or it is quite unbelievable. I suppose for some of
• 2:12
  Speaker 1: us to think that the population has grown that much
• 2:16
  Speaker 1: in the last six months, but I guess who knows
• 2:19
  Speaker 1: what people's behavior is during a pandemic, could at all?
• 2:22
  Speaker 3: Well, there was a media story came out the other
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  Speaker 3: day that one of the venues around here was celebrating
• 2:28
  Speaker 3: one hundred thousand marked. The official number from the government
• 2:33
  Speaker 3: is that since July seventeen or whenever it was we
• 2:36
  Speaker 3: opened up the borders, we've had one hundred thousand people
• 2:39
  Speaker 3: come across the border. Now, what would be good is
• 2:44
  Speaker 3: to keep those people. I don't know if that's a
• 2:47
  Speaker 3: reality or whether they're likely to return back to Melbourne
• 2:50
  Speaker 3: or to wherever they've come from once the coronavirus issue
• 2:55
  Speaker 3: is gone, but it would be fabulous if they found
• 3:00
  Speaker 3: that the lifestyle and the territory was what they were
• 3:02
  Speaker 3: looking for and that they could work remotely or do
• 3:05
  Speaker 3: what they want to do from up here.
• 3:07
  Speaker 1: Now. Quentin, obviously you know that's talking rentals. When you
• 3:12
  Speaker 1: talk sales wise, how are things going at the moment.
• 3:16
  Speaker 3: It's the busiest market we've had in pretty close to
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  Speaker 3: five years. Again, if you try to nail the absolute
• 3:25
  Speaker 3: reason why, I don't think anybody can put their finger
• 3:28
  Speaker 3: on it. But what we are finding is that the
• 3:31
  Speaker 3: lower interest rates, in particular that you're now getting mortgages
• 3:35
  Speaker 3: that start with a two rather than a three or four.
• 3:39
  Speaker 3: The opportunity to get incentives through government tax, stamp duty
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  Speaker 3: rebates and so forth is a real incentive for first
• 3:49
  Speaker 3: home buyers to have a look at the market. I
• 3:51
  Speaker 3: think they're realizing also that the price point isn't going
• 3:54
  Speaker 3: to stay where it is at the moment. That the
• 3:56
  Speaker 3: price point, with the interest that we're getting from down
• 3:59
  Speaker 3: South in particular through investors and people looking at the
• 4:02
  Speaker 3: property market here, is starting to push the median price up.
• 4:06
  Speaker 3: So what we're seeing is a lot of first time
• 4:08
  Speaker 3: buy has been very sensible and saying it's time to
• 4:11
  Speaker 3: get into the market before it moves.
• 4:13
  Speaker 2: All right, so let's talk numbers.
• 4:15
  Speaker 1: Obviously, you've said with the vacancy rate when it comes
• 4:18
  Speaker 1: to rentals, did you say less than one percent at
• 4:21
  Speaker 1: the moment?
• 4:22
  Speaker 3: That's how anecdotal evidence. We're actually compiling the September quarter
• 4:27
  Speaker 3: statistics at the moment, so we don't have any quantifiable
• 4:31
  Speaker 3: data to back that up. But if you go back
• 4:33
  Speaker 3: to the previous quarter, which was the June quarter, we
• 4:38
  Speaker 3: were already at a round about two percent vacancy rate
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  Speaker 3: by then, and we've had a lot more activity over
• 4:45
  Speaker 3: the September quarter. So my best guess, my best estimate
• 4:50
  Speaker 3: is that we're going to be at one percent or below.
• 4:52
  Speaker 1: All right, let's talk sales then, when it comes to
• 4:55
  Speaker 1: those numbers. How are we going sales wise for Darwin
• 4:59
  Speaker 1: and the to Darwin and Palmerston Regents.
• 5:02
  Speaker 3: Well quite dramatically. Again, we're still waiting on the absolutely
• 5:07
  Speaker 3: quantifiable data to be produced for our September quarter data,
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  Speaker 3: but what we've seen from sites like real estate dot
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  Speaker 3: com dot au, we've seen it the numbers in the
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  Speaker 3: market dropped from something akin to around about eighteen hundred
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  Speaker 3: available properties down to around four or five hundred, so
• 5:29
  Speaker 3: we've seen a lot of the stock moving very very rapidly,
• 5:33
  Speaker 3: and anecdotally talking to our members, we're seeing properties moving
• 5:38
  Speaker 3: on the market within a week to two weeks of
• 5:41
  Speaker 3: being on the market. Whereas they used to take ninety
• 5:44
  Speaker 3: to one hundred and twenty days to move, they're down
• 5:48
  Speaker 3: to essentially buyers coming in, liking it, putting an offer
• 5:52
  Speaker 3: in and the property's gone within the week.
• 5:54
  Speaker 2: Goodness me. And are those prices going up.
• 6:00
  Speaker 3: Again? I need to wait for the September dollars to
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  Speaker 3: be absolutely sure. That in the Dune quarter we did
• 6:05
  Speaker 3: see around about a one point six percent increase in
• 6:08
  Speaker 3: the median price, and I suspect that we will see
• 6:12
  Speaker 3: an increase in the median price in September by how much.
• 6:15
  Speaker 3: I couldn't honestly tell you, I don't think it's going
• 6:18
  Speaker 3: to leap up, but certainly there is upward pressure on
• 6:21
  Speaker 3: that pricing now that the stock is coming down and
• 6:25
  Speaker 3: the demand is back in the market, that will automatically
• 6:29
  Speaker 3: start pushing pricing up.
• 6:31
  Speaker 1: Now, Quintin, I guess the you know, the other side
• 6:34
  Speaker 1: of this, or the flip side of this, as we
• 6:36
  Speaker 1: sort of touched on, is that, you know, it's keeping
• 6:39
  Speaker 1: these people that are that are maybe in the territory
• 6:41
  Speaker 1: at the moment and taking a rental property or buying
• 6:45
  Speaker 1: a home, it's keeping them here.
• 6:48
  Speaker 2: What you know.
• 6:49
  Speaker 1: I guess I'm kind of thinking what concerns will we
• 6:52
  Speaker 1: have if we all of a sudden had developers or
• 6:55
  Speaker 1: others thinking all right, well, I'm going to build I'm
• 6:57
  Speaker 1: going to build some more units.
• 6:58
  Speaker 2: Do you think that we'd end up with an the sort.
• 7:00
  Speaker 1: Of potential glut where those people then leave and it's
• 7:06
  Speaker 1: a bit of a false market.
• 7:08
  Speaker 3: That is a real risk because we saw that happen
• 7:11
  Speaker 3: with the IMPETX boom, where developers took a punt. Because
• 7:15
  Speaker 3: you're going to remember that somebody coming in to build
• 7:18
  Speaker 3: a housing development for instance, has to crystal ballgaze two
• 7:22
  Speaker 3: or three years into the future. By the time they've
• 7:24
  Speaker 3: got the plans through DCA, dug the hole, built the building,
• 7:28
  Speaker 3: they've got to speculate that in that time frame ahead,
• 7:33
  Speaker 3: we're going to have a static market that is going
• 7:35
  Speaker 3: to absorb that, and that the demand is going.
• 7:38
  Speaker 2: To be there.
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  Speaker 3: So I suspect that developers may hold off until they
• 7:46
  Speaker 3: sort of see what's happening with the marketplace down south,
• 7:49
  Speaker 3: as far as COVID nineteen goes, to see whether we
• 7:52
  Speaker 3: are likely to get that outturn of people again once
• 7:56
  Speaker 3: travel opens up and once we all get a jab
• 7:59
  Speaker 3: and things change. Unfortunately, if they do hold off, the
• 8:04
  Speaker 3: catch twenty two is that that keeps our supply held
• 8:10
  Speaker 3: very tightly because there's no real new stock coming into
• 8:13
  Speaker 3: the market. So in order to open up the supply again,
• 8:16
  Speaker 3: we need new stock to come in. But if we
• 8:19
  Speaker 3: bring that new stock in and we do get an
• 8:21
  Speaker 3: exodus of people out, then yes, we jump back up
• 8:24
  Speaker 3: to very high vacancy rates again.
• 8:26
  Speaker 1: Yeah. Absolutely, it's a difficult juggled by the sounds of things.
• 8:29
  Speaker 3: It is. It's a very very delicate balance. But I'm
• 8:33
  Speaker 3: really keen that hopefully the fact that the territories had
• 8:38
  Speaker 3: such good press during COVID nineteen that this actually opens
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  Speaker 3: up a whole new vista for people to go, Hey,
• 8:46
  Speaker 3: we'd never even thought about that. Now that we're here,
• 8:48
  Speaker 3: we do love it. We're going to stay.
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  Speaker 2: Yeah, I hope the same, Quentin, I really do. Mate.
• 8:54
  Speaker 2: Lovely to talk to you this morning. Thank you so
• 8:56
  Speaker 2: very much for your time.
• 8:58
  Speaker 3: Always a pleasure, Gadie, thank you.
• 9:00
  Speaker 1: That is Quentin Killian there, the Real Estate Institute of
• 9:03
  Speaker 1: the Northern Territory CEO, And yeah, I tell you what,
• 9:08
  Speaker 1: talking through some of those anecdotal numbers, but also even
• 9:11
  Speaker 1: talking through the most recent numbers that they've got, it
• 9:15
  Speaker 1: seems as though those vacancy rates at the moment are
• 9:18
  Speaker 1: incredibly low. Lots of people in the territory, those taking
• 9:22
  Speaker 1: those rental properties or utilizing or getting into those rental properties,
• 9:26
  Speaker 1: I suppose is probably the right way of saying things.
• 9:28
  Speaker 1: And also the number of houses and units up for sale,