In this latest market update episode, the Trio unpack the findings in the July data, and they reflect on the recent cash rate cut and what this could mean for the market.

🏡 Capital City Highlights
Darwin leads the chase by a very large margin and Mike touches on the chances of double-digit growth for 2025. Cate notes that every capital is sitting in positive growth territory for the past month, and while Darwin is galloping, Perth’s 0.9% increase in one month is impressive too.

Could Darwin’s median value eclipse that of Hobart’s? The Trio ponder the growth and pay credit to William, a lovely listener who tempted the Trio to create an episode on Darwin at the beginning of the year.

Mike and Dave ponder: How small does a city have to be to have capital growth rates influenced by Buyer’s Agents?

📈 What is happening with rents?
Is affordability biting, and behaviours changing in response to this? Mike suggests some possible reasons why the pace of rental growth is slowing down. Factoring in share housing, increasing household formation rates, re-partnering of couples following COVID, and a slowdown in skilled migration have all contributed to a slow down in rental growth.

💰 Rental Yields & Investor Trends

Gross rental yields tell an interesting story for some of our cities. Brisbane’s rental yield has shown a subtle shift downwards. Recently on par with Melbourne and Adelaide for some time, the slight reduction signals the fact that the rental growth hasn’t kept up with the capital growth.

Hobart’s tight stock supply has the Trio talking. A city of over a quarter of a million people only has 335 available dwellings; surely a challenging imbalance, and one that explains the tight vacancy rate.

📉 Listings Drop, Pressure Builds
Total listing numbers are down when contrasted against the same time last year, but not all cities are exhibiting tighter stock numbers.

Cate reflects on the Old Listings data and draws on the annual change for Darwin in particular. What does this indicate about investor behaviour, and does it signal a risk for investors who aren’t selecting carefully?

📊 The RBA Rate Decision
The Trio chat about Governor Michelle Bullock’s speech about the recent rate cut. Cate was surprised at our Reserve Board Governor’s openness about further rate cuts. When contrasted against her previous board meeting speeches, her willingness to boldly discuss more cash rate cuts was stark. Productivity continues to remain a key concern, and in the face of reasonably strong employment figures and lower inflation levels, it seems the RBA have more challenges to keep an eye on.

Lastly, Dave wraps up with a great overview of productivity and what it means for our nation.

Resources:

• Ep. 19        TIME IN the market v TIMING the market
• Ep. 21        Why price point should determine location and strategy
• Ep. 129      What is contrarian investing and how can you make it work for you?
• Ep. 158      How interest rate cycles have impacted the property market since 1990 when the RBA first started targeting the cash rate and some predictions on what will happen this time
• Ep. 164      Analysing regional locations – What investment principles can be gleaned from the highest performing regions in each state? Comparing capital city vs regional performance from 2003 – before and after covid

Upcoming ep: #324 – Unpacking Investor Challenges – Buy Now at High LVR or Wait for 80%? Plus the Build, Hold or Sell Vacant Land Conundrum

Charts sourced from Core Logic, ABS and SQM