# The Property Game Has Changed | Wilson Monthly Market Update EP 5 May

An episode of [Money Mentor Podcast™](https://invisiblenetwork.ai/podcast/1632604767), 23 May 2026, 1 h 03 min.

Audio: https://episode.flightcast.com/ul6wlcfgyjuy7rsvnwvl9yj9.mp3

Negative gearing changes. Interest rates up. Rents rising.Confidence slowing. But the fundamentals haven’t changed: Australia still has a housing shortage. This month’s Wilson Monthly breaks down: • What the Federal Budget means • What happens next for investors • Why apartments could surge • Where the opportunities are now The headlines create fear. The data creates opportunity. 📈Comment "FTB" and we’ll DM you a direct link to watch our FREE Infinity webinar 🚀 Check out our podcasts here: 👇 ▶ YouTube: https://www.youtube.com/@moneymentorau 🍏 Apple: https://bit.ly/4l1my0j 🟢 Spotify: https://bit.ly/4jNKovo Dr Andrew Wilson on LinkedIn: /dr-andrew

## Transcript

[0:05] Well, we are back for another Wilson monthly market update.
[0:09] And don't we have a lot to talk about?
[0:12] The federal budget has finally been announced.
[0:14] So everything that has been buzzing around can finally be put to rest because we know exactly what the government is doing from here.
[0:21] Lots of update on inflation data, RBA and employment.
[0:25] There is a lot for us to rip into.
[0:26] So we're going to get straight to it.
[0:28] Let's get into it, Doc.
[0:29] How are you?
[0:29] Yeah, good, Rachel.
[0:30] And it has been, it's a bit of an understatement to say it's been a really big month for the property market.
[0:35] Of course, we've had a sea change in the taxation position for property, for residential property.
[0:42] One of the biggest changes we've had for a while.
[0:44] Well, since the last big change, which was 25 years ago.
[0:47] And that's when we had the negative gearing discount introduced and also the other discount, which was the ability to negatively gear your property and also the discount on capital gains for investment properties, which was 50%.
[1:02] And that's all gone.
[1:05] There are some ifs and buts in terms of who it covers and when it's covered.
[1:10] It's a lot to navigate through the changes.
[1:12] Yeah, there is.
[1:12] It's not very black and white.
[1:14] And that's right.
[1:14] It hasn't just been, okay, that's it, all gone, see you later.
[1:18] There are some qualifications.
[1:20] And I think they're very important qualifications, not just the sort of grandfathering or semi-grandfathering for, you know, the policies so they're not actually right here and right now, which would be unfair, of course, for those that have already, you know,
[1:33] They made choices based on previous tax incentives.
[1:36] And have modelled their financial positions based on the tax relief that we've had for 25 years in property.
[1:45] And I think the biggest exception in terms of tax, and we'll talk about this in some depth, of course, is the exception for apartments.
[1:55] that new property, not just apartments, remains under the old regime.
[2:01] So that's a big incentive for that particular part of the market and for developers, of course, now have a real opportunity, I guess, to take a bite out of the market from those that are looking for those types of taxation relief, that type of taxation relief, and now we'll take a much closer look
[2:21] at new property, particularly apartments.
[2:24] So that's, you know, very interesting in terms of the implications for these changes.
[2:33] But also there's the old law of unintended consequences, right,
[2:38] It's always a cause and effect to everything.
[2:40] That's right, which you're not figuring out.
[2:42] Say, oh, we didn't know that.
[2:43] Gee whiz, how interesting.
[2:44] Oh, I don't know.
[2:45] Well, they're all smiles at the moment with their announcements.
[2:48] Yeah, but I think there's a bit of nervousness because we are in a position now where the market is just starting to ease.
[2:53] Now...
[2:54] Probably no surprise, obviously, given three interest rate increases in a row, which has taken back what was given a year ago, just over a year ago, with those three interest rate falls, which did supercharge the market.
[3:11] But now we're back to where we were at the beginning of 2025 in terms of mortgage rates, more or less.
[3:17] So in a sense, we're not really putting a break on the market compared to where we were a year ago because we've just given back what we've taken back, what we gave a year ago, the Reserve Bank.
[3:30] But we've had a period of very strong prices growth, no surprise, last year.
[3:34] So affordability was high.
[3:36] We sort of get to that position because we actually do have quite a controlled housing market in terms of house prices because most of us will purchase a property through a bank.
[3:45] When we go to the bank, there are very strict limits on what we can lend, as you would know, of course, particularly.
[3:51] And that's typically that 80-20 LVR level.
[3:54] and also you can't repay typically more than 30% of your gross income.
[3:58] Yeah, in your assessment buffers.
[3:59] Yeah.
[4:00] That's what the media tends to forget when they're talking to you.
[4:03] They think it's all like an open market.
[4:04] Yeah.
[4:04] Yeah, see you later.
[4:05] We can just keep pushing up prices.
[4:07] But you can't because once prices get to a certain level...
[4:11] You can't go to the bank and say, I'd like another hundred grand, please, Mr Bank Manager or Ms Bank Manager.
[4:18] They say, okay, that's fine.
[4:19] Are you earning any more?
[4:20] Well, no.
[4:22] And while we can't give you a lower interest rate at this stage.
[4:25] So that means you're constrained by your borrowing capacity.
[4:28] So when prices reach a certain period or a certain level over a period of time...
[4:33] that creates an affordability barrier because you can't afford, unless you've got a bigger income or a lower interest rate, to pay more.
[4:42] So that creates the cycle, all right?
[4:43] So all things being equal, which they never are, that means the market tops out.
[4:47] And that's what we saw, I guess, gathering momentum last year as prices increased quite strongly.
[4:53] National capital city house prices up by 10% over the year, which is a big rise.
[4:59] And we had some of the markets, Perth, Adelaide,
[5:02] and Brisbane were rising by more than 20% a year.
[5:05] So you can't keep doing that.
[5:07] In a way, those particular markets were catching up because their incomes weren't too far from the other big capital city markets, Melbourne and Sydney, so they had potential to pay more.
[5:17] They did because their median prices were lower, but not anymore.
[5:22] We've now got Perth as number two in terms of the major capital cities.
[5:26] It's overtaken Brisbane, just marginally.
[5:30] And Brisbane, of course, overtook Melbourne.
[5:32] And now we have Adelaide, which has overtaken Melbourne, which is now in the number five spot.
[5:37] But that's just the affordability advantages that those markets have had with lower interest rates.
[5:42] They've been able to catch up.
[5:43] The confidence has been high.
[5:45] So that's what they've done.
[5:45] Of course, they're under supplied markets as well, which is the big picture.
[5:49] So this is a very long-winded...
[5:51] As usual introduction.
[5:53] We haven't even got to any data yet, but we will.
[5:56] But I think it's, you know, it's a very interesting period for the market.
[5:59] As I said, the jeopardy with the Labor government is clearly that these new positions are being introduced, not just in a period where the cycle is naturally easing,
[6:12] but also when we've had higher interest rates, which is going to also impact affordability.
[6:17] And we are moving into the middle part of the year, which is typically the slowest season anyway.
[6:24] So, you know, it's all a confluence of negativity.
[6:27] And of course, it will be affected by already lower confidence with higher interest rates.
[6:34] Not just the real effects of higher interest rates, but the effects on the psyche of buyers and sellers.
[6:40] So I'm not sure how, you know, the government's going to respond if we do get an exacerbation, I guess, of, you know, an easing in the housing market.
[6:51] So – and I'm not sure that will encourage buyers who aren't affected to some degree by that affordability and such as first-home buyers, which a lot of these policies are designed to encourage, because won't they be saying, hey, the market's prices are easing, why should I buy now when I can wait –
[7:10] through winter and early spring, whatever, and buy at a lower price, you know.
[7:16] And the same with sellers.
[7:18] They say, well, why would I sell now, right, when the market, I don't have as many buyers around, so let's wait and see.
[7:24] So there's not as many choices of properties out there.
[7:26] Some first home buyers decide that they want to, especially if they're living at home with mum and dad, invest instead.
[7:31] And now we've taken away options for them to take advantage of the same tax policies previous investors had.
[7:37] That's right.
[7:38] And the other point is that first-time buyers might say, I just want to get out of the rental market or get out of my home.
[7:43] So I'll buy now.
[7:44] I'm not going to wait to see if it's better.
[7:45] But they've still got to pay three interest rate increases.
[7:48] So that's reduced their buying capacity in a sense.
[7:50] Maybe that balances out, you know, the lower price and makes it more attractive.
[7:55] Yeah.
[7:55] But I think, you know, we've still got to ask the question, are there more interest rate increases coming along?
[8:02] Today we'll look at the very latest unemployment data.
[8:04] Well, they announced at the Federal Budget they're going to see inflation go up to 5%.
[8:08] So you would think yes.
[8:10] They've got to do something.
[8:11] They can't just sort of whistle, oh, that's okay, don't worry about it, with 5%.
[8:15] Even though the statements from the Reserve Bank at the last meeting just a week or two ago were that, oh, they think, you know, the interest rates are set at a point now where they'll handle the situation –
[8:27] But what's the situation?
[8:28] Yeah.
[8:28] What do we know, you know, in terms of what's going to happen with the price of oil and the Middle East war?
[8:33] But they also called out government spending.
[8:35] Yeah, that's right.
[8:36] But this is a bit of a tax and spend sort of budget, wasn't it?
[8:41] Yeah.
[8:41] Let's spend and let's tax, you know, and it's a bit of the same old, same old going forward.
[8:46] But, you know, without trying to get political, and we try not to do that here, you know, we tread a fine line.
[8:52] But nonetheless, you've got to call it out when you do.
[8:55] I mean, this is a pretty blatant, you know, broken promise, isn't it?
[9:00] And it's not like that was in the last election cycle.
[9:03] No, no, no, we're in this sort of election period.
[9:06] And I think it was only a year or so ago that the government said, no, no, no, we're not going to touch negative gearing.
[9:10] So confidently.
[9:12] Oh, yeah.
[9:12] And it was, oh, that's really great.
[9:13] That would be ridiculous.
[9:14] And now they say, oh, you've got to blame the war.
[9:16] It's all about the war.
[9:18] Yeah, okay.
[9:19] The last time I looked, petrol was still below $2 a litre.
[9:23] So it's – yeah, and I know the government's subsidising that with, you know, reducing the tariff.
[9:27] It's only temporary though.
[9:28] And it is temporary, right?
[9:29] So we know – but look what happened with the subsidies on electricity.
[9:33] Yeah.
[9:33] No, that was temporary.
[9:34] And what happened?
[9:35] We've seen a surge.
[9:36] We saw, hey, it was great.
[9:37] It kept inflation lower.
[9:38] and people were getting a good benefit from that particular subsidy.
[9:43] But then when it was taken away, all of a sudden electricity prices have gone through the roof.
[9:47] Surprise, surprise, inflation.
[9:48] And inflation's gone through the roof and interest rates have gone up.
[9:51] So beware the law of unintended consequences.
[9:54] So we're going to have a...
[9:55] A bit of a look at that.
[9:55] So we better get going because father time is clicking away or mother time too.
[10:00] So shall we start?
[10:01] Let's get into it.
[10:02] And of course every month we do bring you all the latest information on the housing market, the new news and I guess the new news is what happens with interest rates particularly but also policies that are directed towards the housing market.
[10:18] But yeah, my housing market, we present our own opinions in conjunction with Infinity.
[10:23] It's all evidence-based insights and we have also our own data that we use as a basis.
[10:28] And so no third-party data here except from the ABS.
[10:33] And it's all about making informed decisions in regard to the property market.
[10:36] So we obviously take this very seriously because it's always a big event in your life when you're beginning involved with property, as we know.
[10:44] And Australians are very connected to...
[10:46] home ownership and home investment that's why i guess there's so much energy behind these recent announcements by the federal government in terms of tax changes and that we're very focused on what happens with interest rates so let's go forward in terms of um what we're going to present today so let's have a look at all that latest data we normally bring we bring you prices and rents the latest economic data and of course the latest news news which we've already uh i guess covered in spades to some degree but um
[11:14] So the latest housing market news, and as I said, we do prices, rents, vacancy rates, auction markets, which are important, and they change every month.
[11:22] They give us clear insights into the progress of prices and rents going forward, and also the underlying data in terms of supply and demand, building approvals, house building costs, and house building block costs, because that's one of the underlying drivers of our market, as we say every month, Rachel, is the fact that we don't have enough housing.
[11:42] property to go around.
[11:44] We're just not building enough and no sign of this.
[11:47] And yet this was supposed, the new government policies are supposed to help that.
[11:52] I'm not sure that they will, but we will see.
[11:54] I think they might help the apartment market.
[11:58] But, you know, given the long lead times that apartment markets have...
[12:02] planning you know uh the planning environment and the building environment but we also look at those house building costs as i said which is hasn't been great recently for the uh for home building and of course if the house building costs rise it makes it tougher
[12:17] to get a house out of the ground or a unit out of the ground.
[12:20] The economy, interest rates, the labour market, inflation and, of course, the federal budget we'll look at today.
[12:25] We've discussed that.
[12:27] And we'll look at some how housing market activity has gone over the longer term in terms of price changes on an annual basis.
[12:35] So the federal budget, as we've done to death, I guess I'm still dreaming about the budget every night.
[12:42] It was a very exciting night.
[12:44] I mean, there was a lot of...
[12:46] A lot of noise about the budget before we actually got into the actual evening.
[12:50] And there was a lot of talk about whether CGT would be scrapped altogether, if it would go down to 33%, and what would happen with negative gearing.
[12:58] But as you can see here, we've got – you can no longer claim negative gearing on your investment property.
[13:04] So you can still claim it against rental income, but you can't do it against your wages anymore.
[13:08] That's right.
[13:09] They've grandfathered that though, so anything prior will still benefit from the same incentives.
[13:15] So as we've got on the slide here, it does apply to property purchase after the 12th of May.
[13:19] So obviously from now, because people would have just, you know.
[13:23] But it does favour those with a sort of a higher income profile.
[13:27] Because some people will be okay to run those losses.
[13:30] Yeah, that's right.
[13:31] Yeah.
[13:32] And it's the offset between the losses on the, you know, income versus costs... Yeah.
[13:38] ...versus the capital growth.
[13:39] Yeah.
[13:40] So you say, well, I can take the losses but I don't care because... Well, you know, I can offset that with the capital growth... ...which has always been quite healthy, of course, in the Australian market... ...which we will look at shortly...
[13:50] So they'll weigh that up more than probably what they did before.
[13:53] Yeah.
[13:54] But it could also push investors more to the new builds, as you said.
[13:57] Absolutely.
[13:58] And it has to.
[13:59] That unit market could look a lot more favourable.
[14:01] And, of course, those that are looking for some sort of relief, taxation relief on higher incomes with a higher tax bracket will look at this a lot more closely.
[14:10] Because they want to get the deduction now.
[14:11] They think, hey, this looks pretty interesting.
[14:14] So they can, hey, let's do a deal with developers, you know, going forward.
[14:19] And I've had plenty of calls from developers looking to discuss the implications for this because they feel that it will bring more demand into that part of the market.
[14:30] Not so good for those that are looking at established properties because, of course, that's not going to apply.
[14:39] quarantine new properties.
[14:42] So, you know, it's interesting as particularly for the development market.
[14:46] And I think that's where they're projecting, the government's projecting more supply coming through.
[14:51] But their thoughts are also to try and help alleviate the competition for the first home buyers with those established homes.
[14:57] Yeah, well, that's true as well.
[15:00] But we've got some interesting data we're going to look at in terms of the history behind changes to...
[15:06] Because it's not the first time that they've done stuff like this.
[15:08] No, no, no.
[15:08] We can actually really closely look at something that similarly happened back around about a decade ago.
[15:16] So six or seven years ago.
[15:18] Yeah.
[15:18] Which gives us a bit of a signpost to what might happen this time.
[15:21] So also the capital gains tax discount has been abolished, as you know, of course.
[15:26] That will be replaced by a 30% minimum tax.
[15:30] But it will be real gains, so it will be discounted for the inflation rate.
[15:35] But it's still obviously a gain that you've made, but it's not the total gain.
[15:40] It's the inflation-adjusted gain.
[15:43] But the minimum 30% is interesting too because if you decide you're going to hold out until you're no longer earning a wage at a 30% tax bracket, regardless you're going to pay 30%.
[15:52] That's right.
[15:53] And it's only those that are on, I guess you could call, income-supported wages.
[16:01] tax positions, which there's not a lot of people there that own investment properties.
[16:05] So yeah, quite interesting.
[16:07] And of course, if you have a higher tax bracket, you'll pay your normal tax.
[16:12] You'll pay that anyway.
[16:12] Yeah, you'll pay that anyway.
[16:14] So quite interesting.
[16:14] But if the wait and hold was the strategy, you're still going to hit with 30%.
[16:18] Yeah.
[16:19] I mean, there's always been a view that there shouldn't be tax relief for property ownership, particularly in strong property markets like
[16:28] australians um i mean australia is one of the and i want to be too cheeky here but australia is one of the few um advanced economies that actually offer a capital gains free uh established or the family home for the family home so we don't get taxed on the family home it's most other advanced economies do tax the family home however most of those that tax the family home lets you discount your interest rates uh your interest payments on your mortgage so we don't have that
[16:57] But we also have stamp duty on every purchase.
[17:00] That's right.
[17:00] So it's, you know, a basket of goods, but you can't keep governments away from that pot of gold.
[17:06] If you buy and sell a property ten times, that's ten times worth of stamp duty.
[17:10] That's right.
[17:11] But, look, there are other issues here I think the government wants to...
[17:15] improve its bottom line in terms of its income.
[17:19] It has been under a little bit of pressure from generally the economy in terms of its deficit.
[17:24] So here's a way of which they've always sort of wanted to do because this is just a rerun of 2019.
[17:30] When they wanted to introduce that, they were upfront about it then.
[17:33] It was during the election campaign.
[17:35] Poor old Bill Shorten lost the unlosable election.
[17:39] But at least he fronted up to the electorate, didn't he?
[17:42] Yeah, didn't promise it and take it away.
[17:43] Take it away, right?
[17:44] Oh, no, forget about that.
[17:45] We've changed our minds, sorry.
[17:48] But, yeah, so it's a rerun of that and I guess the government feels it's in a strong position as well going into the next election.
[17:54] But, you know, I wouldn't be counting your chickens before they hatch in that sense.
[17:57] But, of course, you know, we need to see all those consequences.
[18:02] And the capital gains discount applies to property held after the 1st of July 2027.
[18:06] Yeah.
[18:08] Now the government says that's going to support an extra 7,500 first home buyers per year.
[18:15] In fact it's 75,000 over a decade.
[18:18] So that's a fishing exposition.
[18:20] But is that really putting a big dent in the need for the current first home buyers?
[18:25] We'll look at the numbers, the actual numbers that we have at the moment to put that into context.
[18:30] And as we've mentioned, new homes are exempt from the new rules.
[18:34] And, of course, that will support – I think that we will have an increase, certainly maybe a significant increase in demand for apartments because Australians are locked into the benefits, the financial benefits of –
[18:52] you know, being a property investor.
[18:54] And now it's like, well, if you want to do that, to the same degree under the previous regime, you've got to buy an investment property.
[19:03] Not exclusively, and that won't mean there won't be any purchases of established properties by investors, but it certainly should change the, you know, change the focus
[19:15] to some degree from established to new.
[19:18] And look, that's good news for investors because we had a lot of – sorry, for investors, but we had for the apartment market because we had a big surge in apartment approvals last year, particularly in Sydney and Melbourne and Brisbane.
[19:31] So that now gives the opportunity for developers to clear that stock and maybe move into, you know, other developments going forward.
[19:39] And that's probably what the government's thinking about –
[19:43] those extra developments.
[19:46] So let's have a little bit of a look, and this is a repeat of a slide we're going to look at later in terms of the home loan market.
[19:53] So let's have a look at the long-term series of buyer types.
[20:00] So this is for lending, right?
[20:02] So we can go back here to 2019.
[20:04] Now, as we discussed when we do talk about the housing market, we had a period just from 2016 to 2018 where the Reserve Bank was telling everybody the interest rates were going to rise.
[20:17] It didn't happen.
[20:17] They got it wrong big time.
[20:19] But the banks sort of caught on to that and said, okay, we're a bit worried here, a lot of investors in the market, we want to reduce lending to investors because we don't want to have all these defaults in case interest rates rise because they were worried about that because of the high level of investors.
[20:32] So they actually created a credit squeeze.
[20:35] And it did work because if you look there, the black line are investors.
[20:38] Well, look how investors were low during that period just after the credit squeeze.
[20:43] They actually fell substantially.
[20:45] In fact, as we'll look with the percentages, that was the lowest proportion of the home lending market that investors had ever had.
[20:56] So that credit squeeze worked to the point where it pushed down the number of investors in the market to the lowest proportion ever.
[21:05] And certainly that had an impact on a number of outcomes, particularly the rental market, which we'll look at shortly.
[21:12] But you can see how also as those investor numbers fell, the first home buyer numbers rose.
[21:19] And they actually rose to the highest proportion in the history of this particular series as well.
[21:25] But even though that says, okay, well, a lot fewer investors, a lot more first-home buyers, investors started to move back into the market anyway.
[21:33] Yeah.
[21:33] And then that started to push down first-home buyers.
[21:36] So it doesn't operate in a vacuum in that sense, but it did produce the same effect today.
[21:41] that these new tax changes are supposed to have on investors.
[21:45] Fewer investors, more first home buyers.
[21:47] But when we look at the actual numbers, right, so that shows you the relationship in that previous period where changes to interest rates actually affected investors
[22:00] investors and created a bump for first home buyers um but we do remember in that period in 2020 prices were lower because it was uh during that um uh post-covid period i mean how do you help the first home buyers with still the lending constraints yeah well that's right you still got an increase of interest rate that's right yeah exactly right and lower prices potentially you know and i mean that might help but then the first home buyer says okay i'm getting into the market
[22:24] But am I going to get the same sort of price growth that, you know, mum and grandpa had?
[22:30] They still want their property to go up.
[22:31] Of course.
[22:31] That's why they want to get into it.
[22:32] It's like, yeah, I don't have to pay rent.
[22:34] Yeah, I don't have to put up with mum and dad.
[22:35] But I still want to enjoy all those capital growth tax-free, you know, gains... ...that everybody has enjoyed, which I'll get.
[22:46] But if there's not as much in the growth...
[22:49] Well, it's not the intergenerational wealth rebalancing that the government has been espousing.
[22:54] But have we really even done anything to address that?
[22:58] We've grandfathered everything.
[22:59] Yeah, but if your prices are going to be lower, grandma and grandma are going, hey, I've made my money.
[23:04] It's all in the bank.
[23:05] Beautiful.
[23:06] I still don't have to pay on the family home.
[23:10] So I'm still okay because I've created wealth during the period of negative gearing and capital gains discounts as an investor.
[23:18] But that's no longer available to the next generation unless they buy a new property.
[23:25] So we'll see if the proportions of that work out.
[23:27] So that's why I sort of introduced that to give us that sense.
[23:31] So let's have a look at the numbers.
[23:33] So if we look at this year, all right, so we currently have a proportion of 40% of all home loans, residential home loans, of course, home loans, are investors, right?
[23:45] And 21% are first home buyers.
[23:48] Now, back in 2020, as I said, we had a record low number of investors, just 27.4% of the market.
[23:54] See that big shift?
[23:55] Yeah.
[23:55] Yeah.
[23:55] In the proportion of the market.
[23:57] And yet we had 26.2% was the proportion of first home buyers, which was a record high for first home buyers.
[24:06] But there's not a big difference between 21.4% and 26.2%.
[24:08] So we'll look at the actual numbers, right?
[24:13] So the actual numbers show that in 2026, you see the difference there between the number of first home buyers and number of investors, obviously showed a higher proportion.
[24:24] But in 2020, you see the difference is only from...
[24:29] From 2026 to 2020, you're only looking at around about 10,000 differences in property.
[24:36] So 5% increase in first home buyers during that period from 2020 to 2020.
[24:44] 2020 to 2026.
[24:46] So that's what the federal government's working on, that it will, because that's what it did in 2020, it increased first home buyers by 5%, with a similar type of tax imposts on investors, they're thinking the same thing will happen, right?
[25:02] that it'll be a 5% increase in the number of first home buyers on an annual basis, right?
[25:08] That gives you that increase of 6,000.
[25:12] So that's 6,000.
[25:14] Now, they're saying up to 7,500.
[25:16] So that's what they're working at.
[25:18] But at the moment, if you see 2026, to the year to March,
[25:25] we've had 120,000 first home buyers having loans.
[25:29] So they're going to increase that by 6%.
[25:33] So, you know, that's, as I said, that's a 5% increase.
[25:37] For all these, you know, reduction that we're going to have in the number of investors potentially is going to equate to a 5% increase per year in first home buyer numbers.
[25:46] That's not a big shift.
[25:48] Yeah, and we've already seen a decline in first home buyers as it is before these budget announcements.
[25:52] And that's because the market's, you know, softened.
[25:54] Exactly.
[25:55] You know, the same reason.
[25:56] And interest rates have increased, of course.
[25:58] Yeah.
[25:58] That's the other factor.
[25:59] You know, interest rates go up.
[26:00] Well, I'm sorry, I can't afford to take that loan.
[26:03] I'm going to have to save a little more until I can get my loan for my first.
[26:07] And this is in an environment where there's a lot of,
[26:10] a lot of giveaways, a lot of benefits for first-time buyers from the federal government and state government.
[26:15] So they're always giving a very good leg up and that has helped through last year, but it's not helping at the moment because it's being offset by higher interest rates, which...
[26:25] The 5% scheme's great but you still need to service the 95% debt against the home.
[26:31] That's right.
[26:32] And you've got the interest rate three in a row.
[26:34] Bang, bang, bang.
[26:35] You know.
[26:36] And, you know, we also have an economy which is not – wages are still growing but not as they were.
[26:44] According to the wage index data, we're growing around 3.5% but we were at 4%.
[26:49] you know, a year or so ago.
[26:51] So it's not as though, you know, there's that capacity to push up wages to offset higher interest rates as we had before.
[26:57] So I just thought that was an interesting, you know, for all this, we're going to get, you know, if we get seven and a half thousand, it's a small proportion of the total first home buyer numbers that are in the marketplace.
[27:09] Is it really, you know, to offset what are clearly negatives?
[27:13] And the biggest negative, in my opinion, is the rental market.
[27:17] So if we look at listings versus rents, all right, so if you can see the background major series, which are listings, right, so that shows your rental listings, right?
[27:32] You see how rental listings fell away following the credit squeeze in 2020?
[27:37] See how that's the underlying trend line?
[27:39] See how that trend line has fallen away?
[27:41] Because we had fewer investors.
[27:43] You see, we had that lowest number of investors.
[27:45] It makes sense.
[27:45] You just pull the investors out of the market.
[27:48] Where do I rent?
[27:49] right?
[27:49] Because that's what's happened.
[27:51] That's a clear indication of what happened to rental listings through that period following the credit squeeze, right?
[27:58] And look at the black chart, rents.
[28:02] Look at having a rent.
[28:03] So down, down, down go the listings, up, up, up, up, up, go the rents.
[28:07] And the rents went through the roof.
[28:09] And you can actually see
[28:10] As we started to get a recovery in the number of rental properties in 2024, because that's when the credit squeeze started to ease, you can see how the rentals just sort of flatlined through 2024.
[28:22] Then we had a falling away of rental listings.
[28:26] In 2025, we started to see rents picking up again.
[28:29] But as we've seen, you can see rents flatlined last – sorry, listings flatlined last year.
[28:34] So did rents.
[28:35] But this year, can you see how listings, rental listings have fallen away?
[28:39] And as we've been – and we'll look at shortly, rents are now on the rise again.
[28:44] Yeah, absolutely.
[28:45] So already we've got fewer listings and we're getting higher rents.
[28:49] And you can see that's a clear correlation between the two.
[28:52] And yet we're having – and we can see how rental listings fell away during that credit squeeze period when we had record low numbers of investors and how rents just went through the roof as a response to that.
[29:02] The government must be aware of this, and I'm sure they are, that there's a potential for that.
[29:06] And they have said in their budget notes that they are working with the state governments on rental policies.
[29:13] And I think that, you know, there's something there that they've, you know, they're sort of developing to offset how they do that.
[29:20] I don't know.
[29:20] Rent controls, which are a can of worms, perhaps.
[29:23] Yeah.
[29:23] Well, they've already got, you can't increase rents more than once in 12 months.
[29:27] Yeah.
[29:27] Okay.
[29:27] So, yeah.
[29:28] But I mean, at the end of the day, if you've got the property, more or less, you've got the power.
[29:33] Yeah.
[29:34] And yeah.
[29:35] As we've seen in other countries where they've introduced rent controls, they've been a complete failure and they've actually, particularly in the United Kingdom, they've actually changed those policies and in Europe as well and in the US in some jurisdictions, right?
[29:48] They've found out that rent controls don't, generalised rent controls don't work.
[29:53] In fact, they work against the tenant rather in favour of the tenant.
[29:56] So it will be interesting to see that relationship, which I think is one of the most important consequences.
[30:01] And I think the government realises that.
[30:03] that we're going to see fewer rental properties, you know, particularly established.
[30:09] And it takes a long time for an apartment when it's purchased off the plan per se to become an actual rental property.
[30:16] So even if there's a switch to new apartments, it's going to take some time for that to work its way into the actual stock of rental properties going forward.
[30:25] So I think that's quite interesting.
[30:26] So we've sort of been long-winded on this because I think we need to see the potential consequences and look at the history lessons that we have with the same sort of outcomes of fewer properties.
[30:37] investors and potentially higher rents and because of fewer rental properties.
[30:42] So let's have a look at the latest news on the economy.
[30:45] Just going through quickly, of course, we most of us know that interest rates increased again third month in a row.
[30:52] The Reserve Bank and that brings us back to where we were last year in terms of that 4.35%, which is where we ended up in August after the
[31:02] And the Reserve Bank said that, yes, higher fuel prices, no surprise.
[31:06] They were, I guess, really had to raise interest rates.
[31:10] Well, I'm not sure about that because, you know, Europe and the UK and the US have all kept their rates on hold despite having higher inflation.
[31:18] So...
[31:19] I'm not sure they had to increase inflation, but they did say in their commentary that monetary policy is well placed.
[31:26] And I think you read between the lines, yeah, it can mean one thing or another, that they're going to say, well, okay, we increased rates, other central banks perhaps didn't, but we're now happy that we're at a level which we can, you know, sort of take a wait-and-see approach going forward.
[31:40] And there's more economic data that just might reinforce that.
[31:44] Official rates, we can see there the chart for official rates.
[31:47] It just looks a little strange, don't you think, Rachel?
[31:50] That little hole in the series.
[31:52] Ooh, what sort of a rollercoaster is this?
[31:54] But it just doesn't look like the normal cycle.
[31:57] And it's really the cut-in rates that are a little bit problematic.
[32:03] rather than the increase in rates because they had to do it because inflation, because of electricity and fuel costs, you know, went through the roof.
[32:11] So, okay, we had to raise rates.
[32:13] But it's just that big hole in the middle, like, hey, what's going on here?
[32:16] It just doesn't look right, does it?
[32:18] Anyway.
[32:20] So inflation, of course, is part of the interest rate story.
[32:22] It's a big month in inflation.
[32:24] Headline inflation up 4.6%.
[32:27] Underlying inflation, which is the Reserve Bank's measure, steady at 3.3%, still well above the target range of 2% to 3%.
[32:34] And the real target for the RBA is 2.5% because that's the midpoint of the target range and it has said...
[32:40] a number of times that it wants to consistently to be in the midpoint 2.5%, which it really never reached last year when it did cut rates.
[32:48] It's all about electricity as usual.
[32:50] Not as big the increase, the annual increase, because the effect of the offset from the subsidy is moderating.
[32:57] So it's not as bad as the year to the month before, where electricity prices are up 37%, but still up 25.4% over the year overall.
[33:07] over the year to March, Rachel.
[33:09] But of course, no surprise, fuel prices increased from the previous month, there was an annual fall of 7.2% to a rise of 24.2%.
[33:17] So the Reserve Bank felt it had to act.
[33:21] Rental growth was a little lower at 3.7%, but the ABS measures all rents.
[33:26] We measure asking rents.
[33:28] So the ABS measures rents that are from leases as well.
[33:31] So it's the whole rental market rather than what the market's asking right here and now, which is what we measure.
[33:38] And it takes some time, of course, from asking rents today to become rents for the new lease because leases can be like 12 months, right?
[33:47] But the other serious news once again was that new dwelling prices were up sharply.
[33:51] We're going to see our data on that from 3.7% to 4.5%.
[33:55] So no relief for lower building costs, right, home building costs...
[34:01] from the ABS, which is what we're seeing.
[34:03] So that just, again, is a negative for supply of properties.
[34:09] So, as I said, underlying inflation remains well above the – we're outside certainly the target range of 2% to 3%.
[34:18] So, and that's our chart.
[34:20] You can see there that the underlying rate really never met that 2.5%.
[34:26] Got close to it when rates were cut early last year.
[34:30] But even though rates continue to be cut, we were just never in a position to...
[34:35] to say that underlying inflation had been met.
[34:38] Anyway, that's just the way it goes.
[34:39] Electricity prices surged.
[34:42] We've just got a quick graphic here which shows the increase or the decrease in electricity prices from the subsidy in the middle of 2024 and then as the subsidy was eased, taken away, reduced, subsidy light,
[34:56] electricity prices started to increase and that had a clear effect on inflation.
[35:01] You can see lower inflation through the subsidy, higher inflation when the subsidy was eased.
[35:07] So it's a little bit of, you know, playing ducks and drakes in a way to try to get the inflation rate down.
[35:12] Maybe it worked going into an election last year, but now the consequences are higher rates
[35:17] higher inflation and higher rates exacerbated by higher fuel costs.
[35:22] And of course, we know that the war in the Middle East has pushed up fuel costs and we're keeping our fingers crossed that that'll ease soon, but it's becoming a little bit entrenched, those $100 plus per barrel price of oil.
[35:37] So it
[35:39] for that to move downwards.
[35:40] So that'll give us more time with potentially higher rates.
[35:44] Now, even though our market is still strong, our labour market, we did see a bit of an uptick, Rachel, in the unemployment rate over April, it should be, up at 4.5%.
[35:59] So jobs were actually down by 18% and the unemployed was also down 33%.
[36:05] This is – let's not panic.
[36:07] It is April.
[36:08] It is the holiday month.
[36:09] These things can happen.
[36:10] We need to see a couple of months.
[36:11] But this is looking like maybe the beginning of a change.
[36:14] Let's wait and see how that pans out.
[36:18] But the participation rate was also down a little bit.
[36:21] So sometimes when you get a higher participation rate, many more people looking for jobs –
[36:26] you can get a higher unemployment rate because, you know, we're finding it hard to find work for that.
[36:29] But this has sort of gone the other way.
[36:31] So I'm not saying they're warning signals, but it needs to be watched in terms of what happens over the next couple of months.
[36:37] But the big point to this is that this gives now the Reserve Bank some thoughts on higher interest rates because they're saying, okay, we haven't been worried about the labour market.
[36:47] It's looking really, you know, too cool for school.
[36:49] But now it's just looking maybe we've got to keep a bit more of an eye on this when we consider our interest rate policy.
[36:56] Yeah.
[36:56] So I think this might add to the fact that interest rates will be on hold.
[37:00] But we've got to watch petrol.
[37:01] Yeah, watch that the petrol decrease on the excesses temporary.
[37:05] That's right.
[37:05] Three months, that's it.
[37:06] That's right.
[37:07] Yeah.
[37:07] That's right.
[37:07] So but this is interesting news today.
[37:11] Well, certainly this month in terms of the labour market, which has been just offsetting issues for higher interest rates and meaning that maybe we don't just look or the Reserve Bank doesn't look at the inflation rate.
[37:25] It also has to look at the labour market now and be careful about that.
[37:28] And maybe those higher interest rates have been affecting the labour market, you know, starting to show some effects, those higher interest rates, which we shouldn't be surprised, you know.
[37:37] And confidence is low at the moment.
[37:39] Higher interest rates, house prices are easing and we've got all these tax measures which have taken a lot of focus and it just does add to that fragility of confidence from, you know, from consumers going forward.
[37:50] Yeah.
[37:51] So the jobless rate, as we can see, they're a little higher at 4.5%.
[37:54] Not really a worry, but starting to move up to the area where we start thinking it's not what we would call a low rate.
[38:00] But it's still reasonably low compared to the low periods in our history in terms of where we had strong economic growth.
[38:07] But it is a roundabout heading towards where we were.
[38:10] in the pre-COVID period where we were just really trundling in the fives and higher fives.
[38:16] But as I said, let's wait and see how this works its way out.
[38:19] And as I said, the participation rate's still quite low, but starting to fall away.
[38:23] And the participation rate, of course, just measures the proportion of the population that's actually in the workforce.
[38:29] And that means also looking for work, not just in the workforce.
[38:33] WA was the lowest state for the unemployment rate.
[38:37] But most states are now higher than where they were a year ago, no surprise, with the exception of WA and Queensland, which is steady.
[38:46] So where are we going to go with rates?
[38:48] We've already sort of discussed that.
[38:49] Inflation was higher over March due to the fuel surge particularly.
[38:54] It's still outside the target range.
[38:56] Electricity prices will keep rising but not probably at the same rate they have been rising annually.
[39:02] recently as the subsidy has faded uh the oil surge uh is now the wild card we don't know how that's going to pan out fingers crossed it it um uh it starts to fall soon but it's certainly a lot of uncertainty you know that we have in there uh so electricity and fuel hire
[39:20] economy remains strong but we've already seen a little bit of a question mark there to say that's still strong um we need to really await uh with um you know some interest what happens over the next couple of months to see if there's a trend emerging and the rba i think has signaled that that may rate that may rate rise might be sufficient for now okay but so many things can change going forward so uh we'll see how that works out home building uh just quickly we saw
[39:50] No real joy there, even though we had a... And this is the second fall in three months.
[39:56] No real revival in home building.
[39:58] And we can see there apartments down by 26% over the month and apartments are quite volatile.
[40:06] And the year-to-date, though, we are starting to see a shakeout in the apartment market, down by 6.8% over the first three months of the year compared to the same period last year.
[40:15] And even though apartment development on the year-on-year...
[40:19] comparisons is still quite strong it's nowhere near what it was so we are seeing we're moving past the peak of that surge in apartment approvals from early last year we can see the trends there it's just flatlining Rachel nothing to get too excited about there but we're about to see more demand in this area
[40:36] Well, that's right.
[40:37] Yeah.
[40:37] So, you know, at the current level, and this is what we'll look at when we look at houses versus units, it's the same sort of deal there, that volatility, but it's now starting to look, as I said, we're getting that shakeout in terms of the apartment market volume.
[40:53] So we'll see if that brings, I think a lot of the potential for more approvals in the apartment market, particularly in Melbourne and Sydney, was brought forward last year.
[41:01] Yeah.
[41:01] And I think that sort of moved through all the real planning policies
[41:05] outcomes that they could accelerate and now we're getting back to more of a you know a subdued or certainly a steady um environment for for building approvals for apartments um so uh let's have a look at what's happening in the capital cities as usual melbourne the top performer
[41:23] for home building approvals over the month.
[41:29] Lots there.
[41:31] And Perth's quite interesting there because its houses are now only behind Melbourne for building approvals for houses in Perth.
[41:41] um and that's the growth of the year brisbane still approving more houses which is a positive for strong market same with perth sydney also but melbourne down uh adelaide flat and apartments you can see melbourne and sydney as i said are now starting to um go lower following strong periods last year a big surge there in brisbane from but from a low base so we take that into consideration and also in perth
[42:04] But overall, you know, that undersupply in Sydney and Melbourne continues, you know, with total dwelling approvals going down.
[42:11] And we can see the genesis of that undersupply.
[42:14] Total capital city building approval still down 25.6% since that peak.
[42:19] 10 years ago and for apartments down 42.2%.
[42:24] Big fall in apartments, not so much in houses, but a little bit of a pickup in the trend, the annual trend for houses, but not really anything to get excited about.
[42:33] House building costs, we've already seen from the ABS, house building costs are on the rise and my housing market's reporting the same.
[42:41] scenario a year ago it just looked like we were starting to get back to normal in terms of house building costs and this is a house building cost index that's run every quarter and advanced month by month so you can still see there that house building costs are still at a high level in terms of the annual growth for house building costs still up around 4.5 percent which is well above
[43:02] the um that pre-surge that we had due to the previous government's uh home building allowance um so no joy there the same thing that the abs is approving and of course when we look at the base of all building which is a block of land for a house you can see some extraordinary rises there uh over the march quarter compared to the previous year um and look at perth up 53.9 percent the cost of building or cost of buying a building these aren't development sites these are house building blocks
[43:31] Even Brisbane at 30.6%.
[43:32] Yeah, I mean, man, it's no surprise these are the boom markets.
[43:35] Yeah.
[43:36] And this is where it all starts, at the bottom, you know, at the bottom with a block of land.
[43:41] And even Sydney up 7.5%.
[43:42] And it sort of adds up to where the house price growth has been as well.
[43:46] Well, like you said, those markets were previously where it was quite affordable to buy quite a lot of property.
[43:52] And now they're playing catch-up to see what happened.
[43:54] I had to check that out.
[43:55] 53.9%.
[43:56] And I thought, what?
[43:56] What?
[43:59] And as it turns out, yeah.
[44:01] But look at Sydney, it's the median price of a block of land, building block, $742,000.
[44:05] But look at the size of the Sydney block of land.
[44:08] Every size, 315 square metres, which is about what the house used to be once upon a time.
[44:13] So you're not getting much backyard there anymore in a typical Sydney building block.
[44:17] And it's $2,353 per square metre.
[44:19] That's what you're paying for a square metre of land.
[44:24] is a couple of grand.
[44:25] It's quite interesting.
[44:27] Still $930 a square metre in Melbourne.
[44:29] That's right.
[44:30] And they have the biggest, well, second to Perth.
[44:32] But they certainly are significantly bigger than, interestingly enough, Adelaide and Brisbane in terms of the size of a block land.
[44:40] But Melbourne has the capacity because it spreads wide to the west, the north.
[44:45] Yeah.
[44:46] and to the south east.
[44:47] So it can – it has a bigger capacity for broad agar.
[44:50] But even so, you know, Melbourne building blocks are also increasing.
[44:56] But it's interesting how it pans out the same relationships for house prices.
[45:01] So this is the projected new supply for the government.
[45:04] I just – well, we're kicking the government a little bit.
[45:06] Let's keep going.
[45:08] The five-year target that the government set in the middle of 2024 was 240,000 homes per year –
[45:14] So we can actually get the first lot of how they've gone with it.
[45:17] How are you going, guys?
[45:18] Well... Well, we're behind.
[45:20] Can we talk about something else like negative gearing?
[45:23] So the latest completion, so this is completions for the 2024-25 financial year, which is the first year of the target.
[45:31] It was $185,088.
[45:31] So that's the first...
[45:35] First year, so they were down 54,912 on the target, which is a 30% shortfall.
[45:41] So if they want to balance it out next year, they're going to have to build closer to 300,000 homes.
[45:50] And we've seen the longer period, long-term growth.
[45:54] you know, outcome for building approvals, which doesn't give you a lot of confidence.
[45:58] So I think that that was just like an aspirational target and, okay, let's talk about something else at the moment.
[46:04] So it just shows you, I mean, and that's the assessment from the government of what appropriate, an appropriate level of new building was for Australia and they're well short of that.
[46:16] So home loans, we've already seen the home loan data down over the quarter.
[46:20] No surprise, we're starting to peak with the housing cycle, but also higher interest rates always mean obviously people are constrained from borrowing.
[46:28] So across the board, investors, first home buyers and owner occupiers fell.
[46:33] We saw that, but still up 8.6% over the year, which just shows you what a strong year we have had, even with that March quarter fall.
[46:43] And you can see there the numbers strong last year and now starting to fall, home lending fall, as those interest rates are increased.
[46:51] And that's the interest rate cuts.
[46:52] Sorry, yeah, interest rate cuts last year obviously picked up the number of home loans.
[46:59] And we've seen this before, and this just shows you the relationship that all the buyer types fell over the March quarter.
[47:07] And when we look at the proportions, it was actually the first-time buyers fell the least.
[47:14] But when we look over this year to date, which of course is the same because this is the March quarter, but when we look at the year to date, investor lending is actually up 18.8%, Rachel.
[47:25] So that's a really big increase.
[47:26] So investors were the big story now.
[47:28] in terms of home lending over the past 12 months.
[47:31] Interesting to see what happens over the next 12 months in terms of that particular graphic.
[47:37] Now, home rents, we've already allured to this, the latest home rent data over April.
[47:42] We actually saw house rents across the board, except for Darwin and Canberra, increase.
[47:47] And that's no surprise, given how low those vacancy rates are.
[47:50] Look how low those house vacancy rates are.
[47:53] And we've seen that with the low listing numbers, right?
[47:55] Yeah.
[47:56] Low vacancy rates, of course.
[47:58] And they're all under 1% with the exception of Canberra, Melbourne and Sydney and they're just over 1%.
[48:04] And, of course, 2% for a vacancy rate is the balancing...
[48:08] the balancing level between higher and lower rents notionally.
[48:11] A little bit different for units.
[48:13] Units were a little bit higher or – sorry, a little bit lower or steady over the month of April.
[48:18] But that's because April is a holiday month, particularly for – obviously for students.
[48:24] And for apartments you do get less demand because of the distractions of the holiday month which we get through April.
[48:30] So notwithstanding that we didn't have the same growth in rents that we did with houses, the vacancy rates are still pretty low, a little higher than houses, but still low enough to suggest that that will continue to put pressure on, upward pressure on rents.
[48:45] So there's our QR code for the latest rent report.
[48:48] So those that are getting a copy of this presentation can take a snap of the QR code and they'll get the full rent report.
[48:55] Let's have a look at house prices.
[48:57] They have been booming until recently, but just starting to go a little softer over April.
[49:02] Melbourne and Sydney.
[49:03] Sydney flat with unit increases.
[49:07] Melbourne down, but a little higher for units, but down for houses.
[49:12] The other capital city market's not too bad.
[49:14] We're keeping an eye on Adelaide at the moment.
[49:16] After some very strong growth, the Adelaide market is really now starting to look like it's peaked out.
[49:20] Yeah.
[49:22] But I guess when we look at the full year results, still very strong.
[49:25] Perth up by 25.7%.
[49:27] And you can see on the April data, Perth is now just below Brisbane in terms of the median house price.
[49:34] But I think when we get the May data, we will see Perth ahead of Brisbane.
[49:38] But there's a lot of things that have happened over May.
[49:40] So we will wait with bated breath just what happens.
[49:43] But, yeah, Brisbane up 20% over the year.
[49:48] Strong results there.
[49:49] Adelaide up 14.2%.
[49:51] And Darwin, which has been booming, up 21.6%.
[49:55] Similar relationships with units.
[49:59] With Brisbane up 9.4% there, 50%.
[50:02] sorry, so far this year, but over the full year, Brisbane up 27.8%, Perth up 30%.
[50:07] So big results there.
[50:08] But as I said, we've moved through the peak of our house price cycle.
[50:12] If you want to get the latest My Housing Market house price report for April, there is a QR code, which you can get a link to a PDF copy for that for your info.
[50:23] So this is our latest data.
[50:25] And this shows us what's happening in the markets on a day-by-day basis.
[50:29] So this gives us a real sense of the trend.
[50:31] You can see there this is Sydney houses, certainly easing now, which reflects what we saw in the price data.
[50:38] The trend now is clearly just easing in Sydney.
[50:42] Melbourne house, it's interesting that we saw a blip upwards in the pre-
[50:46] holiday period march in melbourne but the melbourne house prices have started to certainly uh fall i guess rather than ease brisbane's still rising so no real sign there maybe the very earliest signs of a flattening but we'll wait and see but certainly the brisbane brisbane house price trend is onwards and upwards uh adelaide as we said has just started to um to ease as well so that's sort of working its way into the same relationship as prices
[51:13] But look, it doesn't look like there's any stopping the Perth market, Rachel.
[51:16] Onwards and upwards and onwards and upwards it goes.
[51:20] and set to overtake Brisbane going forward.
[51:23] Units prices, Sydney similar to houses, just steadying a little bit Sydney unit prices.
[51:28] But here's a bit of a surprise.
[51:29] This year Melbourne units have been actually quite positive.
[51:32] Had to sort of double check this one, Rachel, but it's certainly gone against what we've seen with house prices.
[51:36] So there's plenty of buying happening and it does reflect in the auction clearance rates week to week that we see higher clearance rates for units than houses.
[51:44] So some interesting...
[51:46] Maybe some value opportunities there attracting buyers in the Melbourne unit market.
[51:50] But that's clearly showing there in the daily trends for prices.
[51:55] Brisbane, no stopping Brisbane units, onwards and upwards as I've said for the others, for unit prices.
[52:03] Auction markets, which have certainly tracked downwards recently.
[52:06] We can see we like to keep an eye on our auction markets because they're a very good forward indicator of prices.
[52:11] auction clearance rates versus prices in Sydney.
[52:15] They do tend to track each other.
[52:17] Same thing in Melbourne prices and clearance rates tracking each other.
[52:20] Latest auction results, and this is for the middle of May.
[52:24] Following the budget, we did see actually clearance rates were steady, but the numbers of properties coming into the market was actually quite low.
[52:32] Maybe there's been a sense with higher interest rates of some sellers not wanting to engage the market at the moment.
[52:38] But certainly clearance rates didn't fall following the market, but they held steady but at low levels.
[52:44] So clearance rates are certainly at their year lows generally and are likely to come under increasing pressure with a lot of the negative publicity that's come through following the budget and, of course, those three consecutive rises in interest rates.
[52:59] from the RBA.
[52:59] So you can see there, Sydney numbers were well down in certainly Sydney and Melbourne for auction listings.
[53:08] Clearance rates, that's the lowest clearance rate in Sydney for the year.
[53:11] We can see that that Sydney market, when we look at the prices, has certainly flat lined.
[53:16] Melbourne a little higher, but again in the 60% region, which is low 60s are now the
[53:25] The typical outcome, I would expect to see that maybe even a little lower going forward the next few weeks, but we'll wait and see.
[53:31] You know, these are value opportunities for buyers in the marketplace.
[53:35] They can really, I guess, create...
[53:40] you know, some tension with sellers given that there are fewer buyers in the marketplace with confidence a little lower.
[53:46] Those Brisbane clearance rates don't tend to mean much even though we produce them because Brisbane is still going onwards and upwards.
[53:52] I've said that about four times today.
[53:56] But nonetheless, they're lower clearance rates that Brisbane's used to, but it has a different auction culture.
[54:04] So Adelaide was actually a little higher compared to the week before, excuse me, and a little higher than the year before, but we are used to seeing 70% to 80% clearance rates in Adelaide.
[54:13] So that's another explanation of why that Adelaide market has eased when we look at the prices growth.
[54:20] And look, Canberra, nothing to get excited about with Canberra.
[54:22] It really has detached from that Sydney market over a period of two years.
[54:26] And even though it looked a little better recently, Canada,
[54:29] Certainly still some work to do to catch up with that Sydney market.
[54:34] So this is the trends.
[54:35] They're all the same here.
[54:37] A little bit lower or similar to the month before but well below the same period last year, May.
[54:44] Melbourne market, same story as Sydney there.
[54:47] Similar to the month before but well below the year before.
[54:51] And the Brisbane market, as I said, interesting, it's fallen away auction clearance rates this year, or May compared to the previous month and compared to the same period last year.
[55:02] But so far, no implications for price.
[55:07] in the Brisbane market.
[55:08] Adelaide, we do have seen price implications for price changes there.
[55:12] Well below where it was in April, the Adelaide market, and lower than where it was the same period last year.
[55:19] And Canberra, yeah, had a good April, but not so good so far this month by comparison.
[55:24] If you're looking for the latest auction results, Rachel...
[55:29] Every Saturday night on my LinkedIn account, Doc Andrew Wilson at LinkedIn, you get the snapshot around about six o'clock Sundays.
[55:35] We put up the national report, which gives you the regional breakdowns for Sydney and Melbourne, and also the top 10 sales under the hammer over the week.
[55:44] So get a hold of that one.
[55:45] It's really good insight, real time information into what's happening with our housing markets.
[55:51] That's why I produced it.
[55:51] If you missed the latest national report, you can get another QR code there, which will give you a PDF copy going forward.
[55:58] So
[55:58] Let's finish up now, Rachel, and just summarising what the markets are going to deal with with these higher rates.
[56:09] The housing markets still remain chronically undersupplied for both homes and land.
[56:13] House building costs are rising.
[56:15] Not good news there for that undersupply.
[56:17] Migration is certainly lower, but set to remain high.
[56:21] Rental markets are tight.
[56:22] Rents are still rising.
[56:24] We've had significant first-home government policies, which have obviously helped to stimulate demand from that particular sector of the market.
[56:31] We have a chronically underperforming share market, which means...
[56:33] As an asset class, residential property still remains a premium, particularly in terms of capital growth.
[56:42] Investor incentives remain for new apartments.
[56:44] Let's underline that one.
[56:46] Sprung aspirations still for first home ownership and investment will continue with Australians as it has for generations.
[56:53] Higher rates typically influence confidence in the short term, and that's what we're seeing now, confidence under pressure, but clearly provide buying opportunities, and that's where the market turns forward.
[57:04] when those buying opportunities turn into actual sales.
[57:07] Governments are at risk certainly from problematic housing socialism.
[57:11] And as I said, beware unintended consequences, which may be higher rents going forward, which just adds to fewer first-home buyers because they've got to pay more rents.
[57:21] which makes it harder to save for their deposit and there's higher interest rates.
[57:24] So the law of unintended consequences, we'll see how the government deals with that.
[57:29] Incomes and wages are still rising and that supports affordability as prices and rates rise.
[57:34] And we still have a strong economy.
[57:36] Even though the unemployment rate's a little higher, we've got to keep our eye on that going forward.
[57:41] And it is actually a fundamental driver.
[57:43] of housing markets because as long as we have a sub 5% unemployment rate, we're going to have plenty of work around and the capacity to increase wages and incomes and, of course, confidence, you know, not worrying about job security.
[58:00] if you have a job.
[58:01] So we need to keep an eye, however, on those latest numbers.
[58:04] So the big picture, of course, is when all the doom and gloom talk starts, which we have now.
[58:08] Let's have a look at the history lesson in terms of annual capital city house price growth.
[58:13] Four years we've had negative price growth.
[58:15] The worst was in 2018 when we had a real...
[58:18] humdinger of a scare campaign, down just by 5.5%.
[58:21] In 2022, when we had higher interest rates, down by just 4.3%.
[58:27] We've had 25% price increase over the last three years, Rachel.
[58:31] Lots of black there above the line, showing how strong Australia's housing markets are, and which, of course, generates
[58:36] demand for housing um i think we'll be you know we've got a lot of water to go under the bridge this year maybe more interest rates you know we need to see how that'll pan out uh but i think we'll struggle to meet what we did last year and maybe around about half as much um in terms of our annual growth because the those strong markets are still performing quite well particularly uh perth and uh and brisbane
[59:00] So I mentioned the differentials between asset growth in property versus other asset classes.
[59:09] You can see there the all odds, which is the Australian share market, still a clear underperformer compared to house prices.
[59:15] Although the Dow, which of course is the US share market, has been the top performer over that period since the end of 2007, which was the peak of a very strong economic period.
[59:25] And even a term deposit would have given you more than the share market through that period of time.
[59:30] We're all about, as usual, every month we bring you as much information and insights as we can into the marketplace because misinformation and ignorance, we don't do that here, remain the curse of Australian housing markets.
[59:44] Just have a look around at the moment, except for those that rationalise and act on the fear it generates and there is nothing to fear but fear itself.
[59:51] And guess what?
[59:52] We're going to prove that again this year, I'm sure.
[59:55] We've got plenty of opportunity to do that.
[59:57] um and just finishing quite uh with our biggest giveaway in property and if you do become a member of the infinity family infinity group you get an access access to what is the greatest in my humble opinion um insight into the property market and this is on a suburb level so this is suburb level data um you can get access to this but you need a password through that qr code or the link
[1:00:21] which, as I said, joining the Infinity family will give you that, which gives you a great opportunity to figure out what's happening in the marketplace on a daily basis with every suburb in Australia.
[1:00:32] So we also have the latest news on the app.
[1:00:34] There's a screenshot from the front page of the app and we also have access to our latest podcast with Rachel and myself.
[1:00:41] So get a hold of that, lots of news.
[1:00:43] Here's a screenshot.
[1:00:44] You can filter for price or rent.
[1:00:46] The capital city region or the outside capital city region, the suburb,
[1:00:50] House, you can filter for house, unit or townhouse and also for a number of beds.
[1:00:54] Here we're looking at Blacktown as an example.
[1:00:57] And this is a house in Blacktown with four bedrooms.
[1:01:01] And this is the data on the screenshot there.
[1:01:03] Not only the median price but also the low and the high price.
[1:01:07] These are asking prices.
[1:01:09] So this gives you a sense of what agents and sellers, vendors are looking.
[1:01:13] regarding and terms of the market and also the number of properties available.
[1:01:16] You can do exactly the same thing for the rental market.
[1:01:19] And if you're an investor, we also provide you with the top 10 yields.
[1:01:24] And that's the annualised rent divided into the asking price that tells you the return on investment.
[1:01:31] that you get and also provides you the vacancy rate for each of those suburbs.
[1:01:39] And you can click onto the link there because it'll give you a map of the suburb as well, plus the number of properties for rent and for sale.
[1:01:45] So isn't that fantastic?
[1:01:47] And if you've missed the file and you want the hard copy, there is a QR code to the presentation file.
[1:01:52] And...
[1:01:54] So you get a PDF copy of the data.
[1:01:56] It's been a big month, Rachel.
[1:01:59] What have we got coming up next month in June?
[1:02:02] Hopefully not as exciting.
[1:02:03] Well, it won't be as exciting, that's for sure.
[1:02:05] Look, this is a significant change in Australia's property market.
[1:02:08] This is something that's been – have supported Australia's property markets for 25 years and now it's changed.
[1:02:14] So, okay, there's some grandfathering there, so it's not automatic for some of the particular changes –
[1:02:20] but it does mean a big change and as i said the interesting thing is when this is occurring it's occurring at what was regardless of the changes to taxation a period of higher interest rates and a period of affordability cycle peaking so keep tuned here because this is where you find everything out you know exactly what's happening with prices to the day and rents and what all these changes mean and what's happening today
[1:02:44] with the key drivers, all the key drivers, particularly in the economy, such as interest rates and the unemployment rate and other bits and pieces such as supply and demand, building, you know, migration, all those scenarios.
[1:02:57] So we'll be back here in a month's time with more information, Rachel.
[1:03:02] Yeah, awesome.
[1:03:03] Well, until then, thank you so much, Doc.
[1:03:05] Thank you very much, Rachel.
[1:03:06] Thank you.

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