Latest / What the Flux / In Conversation with Eliza Owen - Property winners, losers and cities set to boom in 2026

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In Conversation with Eliza Owen - Property winners, losers and cities set to boom in 2026 · What the Flux

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Speaker 1: This is what the flux i'mb and It's Wednesday, the
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Speaker 1: twenty ninth of October. Today, Brett and Justin will be
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Speaker 1: doing a deep dive interview with Eliza Owen, head of
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Speaker 1: research Atqautality formerly known as core Logic, to talk about
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Speaker 1: all things property in twenty twenty five, the first home
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Speaker 1: guarantee scheme, and her topics in twenty twenty six. But
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Speaker 1: before that, here are the three top business news stories
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Speaker 1: from Australia and around the world. The Australian Competition and
0:26
Speaker 1: Consumer Commission, also known as a trible C, is suing
0:29
Speaker 1: Microsoft in the federal court for allegedly misleading millions of
0:32
Speaker 1: customers into paying significantly more for Copilot, Microsoft's AI platform.
0:37
Speaker 1: The ah Triple C alleges that Microsoft concealed the option
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Speaker 1: to reduce or stay on a less expensive plan that
0:42
Speaker 1: does not include Copilot. In other news, Audi sales jumped
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Speaker 1: by one billion dollars last year and paid out a
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Speaker 1: five hundred million dollar dividend to its Austrian parent company.
0:51
Speaker 1: And finally, Amazon has announced they will be cutting thirty
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Speaker 1: thousand corporate jobs, which is nearly ten percent of their
0:56
Speaker 1: corporate workforce. It will be Amazon's largest layoff since cutting
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Speaker 1: twenty seven thousand jobs in twenty twenty two. That's it
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Speaker 1: from me today. I'll pass it over to Breton Justin
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Speaker 1: for the insightful conversation with Eliza Owen.
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Speaker 2: Thanks b. Today we're joined by Eliza Owen, head of
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Speaker 2: research at Cotality formerly known as core Logic, and Eliza
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Speaker 2: is widely regarded as one of Australia's sharpest minds in
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Speaker 2: the property game. She's the go to guru when it
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Speaker 2: comes to decoding housing trends, spotting shifts in the market,
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Speaker 2: and also helping us understand what all those charts and
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Speaker 2: numbers actually mean for every day Aussies. So anyone unfamiliar
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Speaker 2: with Cotality, it's the country's leading property data and analytics company.
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Speaker 2: They track every sale, every suburb and every shift in
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Speaker 2: the market. So Eliza's here today to help us unpack
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Speaker 2: the wild ride that's been twenty twenty five's housing market
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Speaker 2: and also maybe crystal ball with some predictions into twenty
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Speaker 2: twenty six as well. So Eliza, welcome to what the
1:45
Speaker 2: flux in conversation.
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Speaker 3: Great to be here. Thank you so much for having me.
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Speaker 2: So if you had to sum up twenty twenty five
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Speaker 2: in property so far. What sort of year has it
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Speaker 2: been for Australia's housing market.
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Speaker 3: Oh, it might sound a bit weird, but I feel
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Speaker 3: like this year in the property market has been like
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Speaker 3: an old car that you're trying to start up on
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Speaker 3: a cold morning. She's taken a while to warm up.
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Speaker 3: And through the first half of the year we were
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Speaker 3: seeing the monthly growth in home values across Australia was
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Speaker 3: averaging about half a percent, but through the start of
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Speaker 3: spring it's really started to ramp up, with growth now
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Speaker 3: tracking atzero point eight percent through September and August. I
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Speaker 3: think it comes down to the fact that over the
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Speaker 3: course of the year you've had three interest rate reductions
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Speaker 3: leading into the spring selling season, but you also had
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Speaker 3: a little bit of recovery in confidence that was smashed
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Speaker 3: through April with the Trump tariff turmoil. You had some
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Speaker 3: geopolitical uncertainty as well, and housing markets, especially Australia's housing
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Speaker 3: market is generally pretty resilient to that kind of thing,
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Speaker 3: but you do need time for that confidence to recover,
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Speaker 3: and I think it's taken a little while for buyers
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Speaker 3: and sellers to warm up, come back to the market
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Speaker 3: and we're starting to see that momentum.
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Speaker 2: Now the engine's raving again.
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Speaker 3: That's right, We've gotta going, Eliza.
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Speaker 2: We love talking about winners and losers across everything in
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Speaker 2: the property in finance world. So have we seen any
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Speaker 2: clear winners or losers this year so far? If it's
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Speaker 2: like different cities who came out on top and who struggled.
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Speaker 3: So interestingly, it is those kind of mid size capitals
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Speaker 3: that continue to lead growth in Australia's property market. So
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Speaker 3: if we look through the year to date results ending
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Speaker 3: September thirty, the strongest rates of capital growth have been
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Speaker 3: across Brisbane up seven point four percent, and that was
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Speaker 3: followed closely by Perth, which has risen just under seven
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Speaker 3: percent over the course of the year. The big standout
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Speaker 3: is Darwin. Darwin has had this extraordinary uplift of over
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Speaker 3: thirteen percent in the year to date. Amazing, it is wild,
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Speaker 3: but it's coming off the back of quite a few
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Speaker 3: years of underperformance. Obviously, there was a big downturn in
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Speaker 3: values between twenty fourteen and twenty twenty, so I think
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Speaker 3: this could almost just be the result of having room
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Speaker 3: to grow. Investors in particular seeing the capital growth opportunity
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Speaker 3: there and we've really seen a big uplift almost or
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Speaker 3: over over the past year, investor alone secured across the
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Speaker 3: territory have more than doubled and so that's one of
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Speaker 3: the clear drivers of capital growth across that market.
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Speaker 2: Fascinating And in terms of the East Coast of Australia,
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Speaker 2: are there any standout suburbs.
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Speaker 3: That you've seen, Well, I'm a Sydney cider, so I
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Speaker 3: tracked the data pretty closely there and Sydney is kind
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Speaker 3: of hampered by the fact that it's Australia's least affordable market.
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Speaker 3: The in dwelling value is about one point two mil,
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Speaker 3: medium house value is now over one point five mil.
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Speaker 3: So really growth has been most concentrated in the outer
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Speaker 3: suburbs of Sydney, cheaper markets of Sydney where people can
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Speaker 3: still get a house for under a mill, and also
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Speaker 3: areas that are subject to development. So some of the
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Speaker 3: biggest increases or biggest sales that we've seen over the
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Speaker 3: course of the year so far have been in suburbs
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Speaker 3: like Saint Mary's where there's a lot of up zoning
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Speaker 3: and anticipation of the airport metro line, and also Sydney's
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Speaker 3: Metro West, where you've got areas like Burwood, Strathfield, Concord
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Speaker 3: seeing a lot of up zoning and development as well.
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Speaker 2: And what about Melbourne, You've seen any top performing suburbs there.
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Speaker 3: So it's kind of a similar story in Melbourne. Some
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Speaker 3: of the western suburbs have been the fastest growing over
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Speaker 3: the course of the year. Melbourne as a whole has
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Speaker 3: been on the weaker side. I hesitate to call it
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Speaker 3: a loser because I feel like this has been we
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Speaker 3: get it. I love Melbourne. It is such a cool city.
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Speaker 3: And not only that, but this has been a pretty
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Speaker 3: broad based uplift through twenty twenty five because you've had
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Speaker 3: blunt tools like interest rate reductions, higher real wages growth
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Speaker 3: as inflation is falling. So that's also supported to turn
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Speaker 3: around in the Melbourne market, which is up about three
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Speaker 3: percent year to date, but obviously it's smaller than other capitals.
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Speaker 3: And in terms of suburbs to look out for, obviously
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Speaker 3: we've got the expansion of the first Home guarantee, which
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Speaker 3: is probably going to unlock a little bit more demand
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Speaker 3: to the outer northern suburbs. So areas like Epping, for example,
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Speaker 3: where you've got properties that are still under the price
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Speaker 3: thresholds for the scheme, but not quite in those more attractive,
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Speaker 3: pricier northern suburbs.
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Speaker 4: And Eliza, Wo'd love to ask you about younger buyers, say,
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Speaker 4: those in their twenties or their thirties. Have we seen
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Speaker 4: them cracking into the market yet or has affordability continued
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Speaker 4: to keep first home buyers out of the market.
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Speaker 3: Yeah, so it might be surprising to learn that the
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Speaker 3: average age of a first home buyer is closer to
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Speaker 3: thirty four, or at least that was the latest data
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Speaker 3: reported by the ABS in twenty nineteen for buyers in
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Speaker 3: their twenties. I think you have to be really savvy
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Speaker 3: or really wealthy to crack into the property market. Unfortunately,
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Speaker 3: affordability is still such a challenge, but the expansion of
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Speaker 3: the first home guarantee could work out in the favor
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Speaker 3: of many individual first home buyers if they can qualify
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Speaker 3: for both the scheme and the loan. I think as
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Speaker 3: an individual, it could definitely make sense to take advantage
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Speaker 3: of that, especially if you are in the rental market,
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Speaker 3: which has just become so expensive over the past five years.
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Speaker 3: Generally speaking, if you look at new housing loans secured
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Speaker 3: first home buyers make up a little under a fifth
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Speaker 3: of the market nationally, so there's still a relatively small
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Speaker 3: segment of the market that gets priced out quite a bit.
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Speaker 4: Interesting and the First Home Owner Guarantee, it's been quite
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Speaker 4: a big talking point. It's obviously officially live. Now, would
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Speaker 4: you be able to explain to our this and is
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Speaker 4: what the scheme is and from your perspective, how much
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Speaker 4: impact you think it'll actually have.
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Speaker 2: Yes.
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Speaker 3: So, the First Home Guarantee, it was actually first introduced
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Speaker 3: back in twenty twenty as the first Home Loan Deposit scheme,
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Speaker 3: and what it does is for eligible borrowers and participating lenders,
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Speaker 3: you can get a home loan with as little as
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Speaker 3: a five percent deposit, but the government will guarantee you
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Speaker 3: up to twenty percent of the loan. Doesn't mean they're
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Speaker 3: paying that gap for you. It just means you can
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Speaker 3: take out more debt. But the government kind of goes
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Speaker 3: guarran tor and what that means is that you can
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Speaker 3: avoid paying lenders mortgage insurance and what that or otherwise
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Speaker 3: known as el am I, and that's a cost saving
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Speaker 3: of tens of thousands of dollars essentially on your upfront cost.
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Speaker 3: So some people put that lender's mortgage insurance on the
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Speaker 3: loan as well, but essentially it's a bit of a
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Speaker 3: leg up over the deposit hurdle. But you also need
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Speaker 3: to remember that the flip side of that is you're
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Speaker 3: taking on more debt, so it can be very beneficial
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Speaker 3: in terms of the savings on the rental market, the
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Speaker 3: savings online. There's mortgage insurance, but you will be paying
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Speaker 3: more interests over the life of the loan. The difference
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Speaker 3: between that initial first homelane deposit scheme that we saw
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Speaker 3: in twenty twenty and what we're seeing over the past
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Speaker 3: month is that the government has essentially unleashed the scheme
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Speaker 3: a bit more so. It used to be that you
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Speaker 3: could only take advantage if you were earning up to
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Speaker 3: one hundred and twenty five thousand as an individual two
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Speaker 3: one hundred and fifty thousand as a couple. Those income
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Speaker 3: caps gone. It used to be that there were only
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Speaker 3: up to thirty five thousand places a year for the
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Speaker 3: first home buy a guarantee. That limit gone. So the
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Speaker 3: only cap left on the scheme now is the price
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Speaker 3: points of this scheme, and they've pretty much been set
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Speaker 3: to median house values in each city. So to your question,
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Speaker 3: bred in terms of how popular will it be, how
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Speaker 3: much impact will it actually have? I think it will
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Speaker 3: be very popular. So Westpac put out a housing report
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Speaker 3: in April estimating that there could be around four hundred
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Speaker 3: thousand people who would qualify for the scheme. But just
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Speaker 3: because you qualify for the scheme doesn't mean you qualify
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Speaker 3: for the mortgage. You still have to show that you
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Speaker 3: can service that loan. You still have to show you
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Speaker 3: can service a loan if interest rates go up by
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Speaker 3: three percentage points, So that might filter out a lot
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Speaker 3: of people who apply for the scheme that don't actually
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Speaker 3: end up qualifying for the mortgage.
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Speaker 4: That's really interesting. So I suppose in your view, do
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Speaker 4: you think programs like this are going to actually help
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Speaker 4: young buyers or are they being drowned out because of
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Speaker 4: the rising prices of the scheme.
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Speaker 3: Yeah, So the problem with this scheme is really that
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Speaker 3: it's adding to housing demand. It's opening up more access
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Speaker 3: to finance. Whatever scheme you have that does that is
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Speaker 3: ultimately going to push up housing values. So you might
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Speaker 3: be able to utilize this scheme up to the value
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Speaker 3: of say a million dollars in Sydney, but what you
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Speaker 3: get for a million dollars is then probably going to
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Speaker 3: reduce because it's going to be driving up demand to
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Speaker 3: the price thresh hold of this scheme. The other issue
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Speaker 3: is that you're encouraging young people to take on more debt.
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Speaker 3: And again, if you're an individual in the rental market,
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Speaker 3: that could still work out because you might pay more
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Speaker 3: on the life of the loan and interest, but you
11:14
Speaker 3: might save years in a really expensive rental market. So
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Speaker 3: I guess the answer is, Look, if you're an individual
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Speaker 3: who qualifies for the scheme and the mortgage, it's going
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Speaker 3: to work out well for you. But society from a
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Speaker 3: societal perspective, From a systematic perspective, I don't think it
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Speaker 3: really addresses housing affordability interest.
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Speaker 2: Eliza has totality done any research around what the forecast
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Speaker 2: could look like or the impact from this scheme.
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Speaker 3: I think it's really hard to know what the impact
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Speaker 3: might look like because we don't know how many people
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Speaker 3: are going to be qualifying for the scheme and the mortgage.
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Speaker 3: But our guess is that it will push up demand
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Speaker 3: to the value of the caps on the scheme on
11:54
Speaker 3: the prices associated with this scheme.
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Speaker 2: So in Sydney that's what one point five meli, in
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Speaker 2: Melbourne that's nine point fifty. So you think prices will
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Speaker 2: be pushed to those caps because there's obviously that guarantee
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Speaker 2: around it.
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Speaker 3: Yes, that's right. So in Sydney it's gone up to
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Speaker 3: one point five mil and that's that's the highest cap
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Speaker 3: associated with the cities and regions.
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Speaker 2: It's a decent amount.
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Speaker 3: Yeah, so it's pretty much the median house value across Sydney.
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Speaker 3: But it's interesting because I mean, the market moves quite quickly,
12:23
Speaker 3: fiscal policy doesn't tend to be as dynamics, so I
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Speaker 3: wonder how long it'll be before Housing Australia has to
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Speaker 3: get these thresholds updated again to help more people get
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Speaker 3: into the housing market.
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Speaker 2: So let's turn to twenty twenty six. Pull out the
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Speaker 2: crystal ball. What are your expectations of twenty twenty six
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Speaker 2: and do you see any particular markets that are priming
12:42
Speaker 2: right now to accelerate and boom in twenty next year.
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Speaker 3: That's a great question. So I feel like for twenty
12:48
Speaker 3: twenty six you've got slightly more headwinds for the market
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Speaker 3: just because we're not going to see the continuation of
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Speaker 3: rate reductions, even with recent inflation data, that's been thrown
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Speaker 3: a little more into uncertainty the kind of final landing
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Speaker 3: of the cash rate. So twenty twenty five, falling interest
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Speaker 3: rates meant more borrowing capacity, meant rising values, that's not
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Speaker 3: a certain in twenty twenty six. Added to that are
13:15
Speaker 3: affordability constraints as housing values have continued to rise, and
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Speaker 3: so the markets will probably see thrive or shine in
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Speaker 3: that context. Maybe are those ones that have been a
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Speaker 3: little bit undervalued in the past few years, So Melbourne
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Speaker 3: where prices is still below their record highs. Yeah, and
13:35
Speaker 3: Hobart as well. So Hobart home values are still about
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Speaker 3: ten percent below their highs from twenty twenty two, and
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Speaker 3: that underperformance could actually be its affordability advantage in twenty
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Speaker 3: twenty six.
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Speaker 2: And are there any particular cities or suburbs that you're
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Speaker 2: willing to make a big caller.
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Speaker 3: I think yeah, from the city perspective, probably more Hobart,
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Speaker 3: Darwin and Melbourne, just because they're low record highs and
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Speaker 3: have mail room to grow. From a suburb perspective, I
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Speaker 3: guess maybe just a continuation of what we've seen in
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Speaker 3: the past. You know looking out for those areas that
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Speaker 3: are benefiting from up zoning. Usually in the short term
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Speaker 3: what you see is an uplift in house and land value,
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Speaker 3: in particular because of the uplifting yield that up zoning creates.
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Speaker 3: So I think again for the West of Sydney it's
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Speaker 3: going to be that kind of aeratropolis that continues to
14:29
Speaker 3: benefit from that.
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Speaker 2: Awesome Eliza, thanks so much for all of your insights.
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Speaker 2: It's always great to hear from the property gurus themselves
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Speaker 2: and looking forward to a big twenty twenty six from
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Speaker 2: Melbourne Hobart Darwin and for the Flush family as well.
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Speaker 2: Hearing about the first Homeowner Guarantee is really really interesting
14:46
Speaker 2: because I think it's going to be impactful for a
14:48
Speaker 2: lot of our community. So a big thank you for
14:50
Speaker 2: coming on the show. We'll definitely have to check in
14:52
Speaker 2: with you next year.
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Speaker 3: Thanks guys all the best, Thanks for having me.