Latest / 360 with Katie Woolf / Domain’s Chief of Research Dr Nicola Powell explains why the time it takes to save for a home or unit in Darwin is the lowest in the country

Transcript

Domain’s Chief of Research Dr Nicola Powell explains why the time it takes to save for a home or unit in Darwin is the lowest in the country · 360 with Katie Woolf

• 0:00
  Speaker 1: We do know that Domains and Your First home Buyer
• 0:03
  Speaker 1: report has revealed that Darwin is the best city for
• 0:06
  Speaker 1: the first home buyers looking for an entry priced house,
• 0:10
  Speaker 1: with the fastest saving time at three years and six months.
• 0:14
  Speaker 1: It's also found that units in Darwin have the second
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  Speaker 1: fastest saving time, being two years and three months. Now
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  Speaker 1: joining me is Domain's chief of Research and Economics, doctor
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  Speaker 1: Nicola Powell. Good morning to you.
• 0:29
  Speaker 2: Good morning or almost good afternoon.
• 0:31
  Speaker 1: It is well for you, yes, still early for us. Nikola.
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  Speaker 1: Now now let me ask you. I know that obviously
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  Speaker 1: there has been this report released. Can you talk us
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  Speaker 1: through the findings for homes in Darwin.
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  Speaker 2: Absolutely. So, it's almost like a time machine has been
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  Speaker 2: given to first home buyers in Darwin because we have
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  Speaker 2: seen property or entry level property prices all in Darwin,
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  Speaker 2: both for houses and for units. We've also got hiring
• 1:00
  Speaker 2: interest rates, So what that means is people are finding
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  Speaker 2: that interest rates on savings are higher than what they were.
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  Speaker 2: And we've also seen a bit of wages growth. So
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  Speaker 2: all of those three things together have aligned to reduce
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  Speaker 2: the time it takes to save for an entry level
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  Speaker 2: deposit in Darwin. And actually most of our capital cities
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  Speaker 2: did see a decline in the time to say so
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  Speaker 2: it is based on a couple, and we're based it
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  Speaker 2: on an average age of that couple aged between twenty
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  Speaker 2: five and thirty four years old. They're really kind of
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  Speaker 2: prime in that kind of first journey of trying to
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  Speaker 2: save for a deposit and by their first time and
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  Speaker 2: it is good news. You know, we saw the time
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  Speaker 2: it takes to save for an entry house depositing Darwin
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  Speaker 2: decline by nine months compared to this time last year,
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  Speaker 2: and even for units it was down by two months
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  Speaker 2: over the last year. So a bit of good news
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  Speaker 2: for first time bias.
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  Speaker 1: And so is that really the trend here? Is that
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  Speaker 1: sort of why we are in a situation? I suppose
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  Speaker 1: we're we're for Darwin, we're bucking the trend. I guess yeah. Look,
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  Speaker 1: I think the biggest.
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  Speaker 2: Thing reducing this time to save has really been the
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  Speaker 2: fall in property prices. And really, you know, the best
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  Speaker 2: outcome for first time buyers is when you do see
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  Speaker 2: property prices pull back, because what that means is saving
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  Speaker 2: that all important twenty percent deposit is much less. So
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  Speaker 2: it means that journey time of saving that lump sum
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  Speaker 2: deposit is shorter, and you know we are. We have
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  Speaker 2: seen prices pullback over the last twelve months. The only
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  Speaker 2: city that did truly buck the trend was Adelaide, where
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  Speaker 2: we did see an increase in the time it takes
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  Speaker 2: to save for a house unit deposit in Adelaide, and
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  Speaker 2: that really does reflect the stronger market conditions there.
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  Speaker 1: Yeah, right, And so how do we compare in Darwin.
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  Speaker 1: I guess to some of those other locations. As you've said,
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  Speaker 1: Adelaide bucking the trend, but how do we compare it
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  Speaker 1: to some of the other capital cities.
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  Speaker 2: Absolutely so, Darling really wins the trophy for the best
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  Speaker 2: market for first time buyers. It has the quickest time
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  Speaker 2: to take. It takes to save for an entry house
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  Speaker 2: deposit three years. In six months, I'm going to go
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  Speaker 2: to the other end of the spectrum, which is our
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  Speaker 2: longest journey time to save. We can probably all guess
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  Speaker 2: which city that is. It is Sydney six years and
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  Speaker 2: eight months to save for an entry level house to
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  Speaker 2: posit in, So you know, someone is almost hard. You
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  Speaker 2: know that roughly about half that some our other cities.
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  Speaker 2: For the second longest time it takes to save is
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  Speaker 2: good old camera you know, the nation's capital six years
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  Speaker 2: to save for an entry house to posit in camera
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  Speaker 2: some of our more affordable or I Stal wouldn't therefore,
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  Speaker 2: all some of our other cities that have the shortest
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  Speaker 2: savings time, Darwin is number one and in at number
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  Speaker 2: two is Perth at three years seven months. Or remember
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  Speaker 2: Darwin is three years and six months, and.
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  Speaker 1: So what about when it comes to units, so.
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  Speaker 2: Darwin is also up there. It doesn't have the quickest
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  Speaker 2: time to save out of all of our capitals. Perth
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  Speaker 2: takes out that crown at two years and three months,
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  Speaker 2: but Darwin is very close two years and six months.
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  Speaker 2: So it's certainly one of our quiter market entrants in
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  Speaker 2: terms of you know, this is really about gaining access
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  Speaker 2: to the market. How quickly does it take me to
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  Speaker 2: save for that all important twenty percent deposit person Darwin?
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  Speaker 2: The houses and units are up there our more expensive
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  Speaker 2: cities such as Sydney and Melbourne. For unit, it takes
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  Speaker 2: four years and seven months to save for an entry
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  Speaker 2: unit deposit in Sydney, so you know, again roughly about
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  Speaker 2: half the time in Darwin. So really positive news I
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  Speaker 2: think for prospective first time buyers in Darwin.
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  Speaker 1: And Nicola. How long has it been since we sort
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  Speaker 1: of saw entry prices well for houses with the fastest
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  Speaker 1: saving time at this rate in Darwin.
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  Speaker 2: Look, Darwin always seems to kind of come out a
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  Speaker 2: little bit up top in terms of trumping the other
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  Speaker 2: cities in terms of fastest journey time. You know. I
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  Speaker 2: think in recent years anyway, Sydney and Melbourne are always
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  Speaker 2: the ones that are the longest, tend to be the
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  Speaker 2: longest journey times. Canberra has really risen up the rank
• 5:00
  Speaker 2: in recent years in terms of we've really seen an
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  Speaker 2: escalation of house price there. But I think the new
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  Speaker 2: thing we do this report annually. The difference this year
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  Speaker 2: compared to last year is we look at mortgage serviceability,
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  Speaker 2: but we also look at the time it takes to save.
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  Speaker 2: And I think the biggest turnaround here is the fact
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  Speaker 2: that we have seen a shortening in the time it
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  Speaker 2: takes to save for an entry level deposit. We still
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  Speaker 2: have got the time it takes to save higher now
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  Speaker 2: in Darwin compared to pre pandemic, it's one month longer
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  Speaker 2: than it took back in March of twenty twenty, and
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  Speaker 2: it's two months longer compared to five years ago. What
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  Speaker 2: I would say though, is Darwin is offering a much
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  Speaker 2: more stable environment for first home buyers and you look
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  Speaker 2: to more double cities and I'm going to pick out
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  Speaker 2: an extreme here and that is Hobard. Hobart's time to
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  Speaker 2: take to save has blown out by seventeen months compared
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  Speaker 2: to pre pandemic levels. Wow, and that's comparison, It doesn't
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  Speaker 2: it really show that Darwin offers that much more stable environment.
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  Speaker 2: So it means that first time buys have a much
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  Speaker 2: better chance of keeping up with pockety market dynamics in Darwin.
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  Speaker 1: Well, Nicola Pale, we always appreciate your time. Thank you
• 6:13
  Speaker 1: very much for coming on the show this morning and
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  Speaker 1: just having a bit of a chat to us about
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  Speaker 1: the annual First Home Buyer Report.
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  Speaker 2: Absolute pleasure, Thank you, thank you, Thanks so much,