Latest / 360 with Katie Woolf / REINT CEO Aswin DeSilva on why Darwin house prices keep going up

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REINT CEO Aswin DeSilva on why Darwin house prices keep going up · 360 with Katie Woolf

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  Speaker 1: And we know that Darwin's house prices have continued to
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  Speaker 1: grow during the April quarter. That's despite the fact that
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  Speaker 1: we've seen slumps in larger jurisdictions around the country over
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  Speaker 1: the past three months. Now we know that core Logic
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  Speaker 1: have released some figures this week and it does show
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  Speaker 1: that dwelling prices in Darwin climb two point two percent
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  Speaker 1: in the three months to May one and have increased
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  Speaker 1: eight point seven percent for the year. Now, joining me
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  Speaker 1: on the line to tell us a little bit more
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  Speaker 1: about what we are seeing here in the Northern Territory
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  Speaker 1: is and in Darwin, of course, is the CEO of
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  Speaker 1: the Real Estate Institute of the Northern Territory, Ashwan da Silva.
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  Speaker 1: Good morning to you, good bye, how are you very well?
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  Speaker 1: Thank you so much for your time this morning. Now, Ashwan,
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  Speaker 1: I know that these figures obviously released by core Logic,
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  Speaker 1: and I'm sure that the Real Estate Institute probably has
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  Speaker 1: some figures of their own as well. But what is
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  Speaker 1: driving the continued growth in house prices in the territory?
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  Speaker 2: Ah, there are several factors. I mean, the demand has
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  Speaker 2: been quite buoyant. If you see twenty twenty one was
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  Speaker 2: a very good year for Darwin, and it sort of
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  Speaker 2: flowed into the first quarter of this year. So, I mean,
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  Speaker 2: it's an organic demand growth as compared to the capital
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  Speaker 2: cities Darwin and the one other capital city that I've
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  Speaker 2: moved upwards. But you'll see the other major capital cities
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  Speaker 2: either a plateauing or even coming down marginally.
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  Speaker 1: And so are they I mean, are there reasons why
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  Speaker 1: it continues to go up here? Is it the fact
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  Speaker 1: that we just don't have as many houses for sale,
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  Speaker 1: or is it the fact that, you know, it doesn't
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  Speaker 1: seem as though the population's growing. So I'm just wondering
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  Speaker 1: what factors are really apply.
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  Speaker 2: Are they of interstate travel? The key key element is
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  Speaker 2: what you had exactly said. I mean, it's a question
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  Speaker 2: of affordable housing. We need to have the necessary infrastructure
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  Speaker 2: to commensurate with the demand, the land allocations, the construction,
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  Speaker 2: et cetera. And also the fact that the construction costs
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  Speaker 2: have been going up, as you which is inflationally driven.
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  Speaker 1: Yeah, we are going to talk about new home construction
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  Speaker 1: after ten o'clock this morning. We'll catch up with the
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  Speaker 1: master builders and talk a bit more about it. But
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  Speaker 1: there does seem to be a shortage of houses for territories,
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  Speaker 1: whether you're talking about renting or whether you are talking
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  Speaker 1: about purchasing, What is that demand like for us in
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  Speaker 1: the inta at the moment.
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  Speaker 2: Yeah, so you'll you'll see the demand being maintained or
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  Speaker 2: even been you know, accelerating. But the key element here, Katie,
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  Speaker 2: is the interest rate hikes. See, we have seen the
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  Speaker 2: first increase of interest rate hikes exactly a month ago.
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  Speaker 2: These rates I expected to go up the cash set
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  Speaker 2: point three to five, which I expect you to go
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  Speaker 2: up to one point six, which is a significant jump.
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  Speaker 2: So there are two vulnerable segments here, firstly the first
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  Speaker 2: term bias. Secondly the segment which I've never seen an
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  Speaker 2: interest rate hike, So you know, keeping that in mind,
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  Speaker 2: you wouldn't see, I wouldn't imagine the demand for outright
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  Speaker 2: purchases of houses going up come third or fourth quarter.
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  Speaker 2: But you see on the other side of the coin,
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  Speaker 2: the rental wheels being under pressures. We've seen in rental
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  Speaker 2: wheels for a two bedroom you need tracking at about
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  Speaker 2: six point five and about five percent for housing. So
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  Speaker 2: you'll see that rental pressures coming into focus, primarily because
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  Speaker 2: of the person's ability to borrow money to buy, buy dwellings, houses,
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  Speaker 2: a mixed change and so.
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  Speaker 1: Ash And are there any areas obviously if you've spoken
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  Speaker 1: about some of the warriores there, particularly with those interest
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  Speaker 1: rate hikes, and I think that a lot that is
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  Speaker 1: really being felt along with the cost of living for
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  Speaker 1: so many people right around Australia, but particularly here in
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  Speaker 1: the territory. But are there any places around the Northern
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  Speaker 1: Territory where we are seeing those prices really rise the most?
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  Speaker 1: Any suburbs which have become sort of increasingly expensive or popular,
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  Speaker 1: however you want to look at it.
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  Speaker 2: If we really look at across the suburbs, I mean
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  Speaker 2: you take Inner North Coast, Northeast, North palmerste so all
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  Speaker 2: these areas the increase have been I mean fairly even.
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  Speaker 2: There are certain suburbs that have gone up a little
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  Speaker 2: bit more. But by and large, I think what we
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  Speaker 2: need to look at is how we cater to the debar,
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  Speaker 2: particularly younger folks, in terms of having the necessary affordable housing.
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  Speaker 2: There are most that have taken place. You look at
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  Speaker 2: the twin Towers in Twin Touch mean looked at privately
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  Speaker 2: Mitchell Street, So all that is good, but I think
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  Speaker 2: we need to fast track that to have housing that
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  Speaker 2: is much more available.
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  Speaker 1: Yeah, I agree with you. I think that we are
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  Speaker 1: in a situation where we do need to see some
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  Speaker 1: more affordable housing, particularly when we're talking about growing the
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  Speaker 1: population here in the Northern territory, because you tend to wonder,
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  Speaker 1: you know, if we get people to move here to
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  Speaker 1: work and to fill various jobs, where are they going
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  Speaker 1: to live?
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  Speaker 2: Absolutely, I mean the key critical if you're looking at infrastructure,
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  Speaker 2: I mean, if you're looking at roadmap for development, housing
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  Speaker 2: is probably the most important thing, and the affordability of
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  Speaker 2: it is the key element of that. See, we wouldn't
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  Speaker 2: want our young professionals even I mean you really look
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  Speaker 2: at the retires, those two looking at people moving into state.
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  Speaker 2: We have to ensure that this population is writtain here.
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  Speaker 2: Only then can the economic grow and their retail activity.
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  Speaker 2: I mean you look at whether it's whether it's a
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  Speaker 2: clothing outlet or a restaurant that will all do well
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  Speaker 2: if there there have people around it to walk into
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  Speaker 2: those stores, you know what I mean. And if if
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  Speaker 2: they don't have that affordability of dwelling affordability, then that
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  Speaker 2: has a cascading impact of the retail economy. So it's
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  Speaker 2: very important that we have we we look at we
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  Speaker 2: look at the movement in demand and the things that
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  Speaker 2: I told you about, things like the interest rates. We
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  Speaker 2: have to look at offering some grants, some relief to
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  Speaker 2: the people who find you find it difficult to go
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  Speaker 2: to a bank and get a mortgage, so that we
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  Speaker 2: we sort of retain them. And and it's across a
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  Speaker 2: Darwin uh More suburbs, Yeah.
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  Speaker 1: And Ashwan. Before I let you go, just very quickly,
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  Speaker 1: how is the market looking in the in the regional
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  Speaker 1: parts of the Northern territory. I the likes of Catherine
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  Speaker 1: and Dallas springs at the moment.
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  Speaker 2: Yeah, well, Catherine and Alice have also the entry wheels
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  Speaker 2: have got pretty well from going from last year to
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  Speaker 2: even this year, the house prices have been quite buoyant. Yeah.
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  Speaker 2: So it's it's it's it's quite conspicuous right across the territory.
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  Speaker 2: Quite unlike some of the major like Sydney and Melbourne.
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  Speaker 2: If we look at the last few months and Melbourne
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  Speaker 2: has siven flat or even a marginals drop, Sydney has
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  Speaker 2: a dropped against the trend earth and Darwin has done
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  Speaker 2: pretty well. So has a led to some extent so,
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  Speaker 2: but to sustain that the buoyancy, it's the critical things
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  Speaker 2: are The two critical ones are the affordability aspect and
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  Speaker 2: the relief that you've been offered to mortgage holders who
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  Speaker 2: will find it difficult to service their facilities.
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  Speaker 1: Yeah right, oh well, Astrolanz. Yeah, it certainly sounds like
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  Speaker 1: there is a more broader discussion that needs to be
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  Speaker 1: had in this space. We really appreciate your time this morning.
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  Speaker 1: Great to have you on the show. Thanks, thank you.