Weekend Edition: The property turnover problem
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Why is slow property turnover considered a bigger problem than housing supply?
Property growth in Australia is still tracking below demand even as immigration slows. But part of the problem is not the volume of housing, it's the slow turnover and the inefficiencies that creates. And that's largely a policy issue, not a supply issue. That's today. The morning call from NAB with Phil Dobby. The weekend edition. So what happens to Australian property prices this year? A year that is going to see rates rise, not fall, uh maybe starting as soon as next month. We already saw that uh that's played on consumer sentiment in Australia. So what's it gonna do to housing demand? Well, even though the year is still young, there have been some numbers from the ABS building approvals for November, which showed a fifteen percent rise in November and a third
So that's good. In September, though, the ABS reckons the mean dwelling price for Australia over all uh over the whole country was over $1 million, and almost $1.3 million for New South Wales. And the prices keep rising. Come what may, the total value of housing stock since September 2020, in the midst of the pandemic, has gone from 7.5 trillion to To almost twelve trillion in September last year. That's almost sixty percent in five years. Now a sixty percent rise in the total value of dwellings would be magnificent if that reflected how many new dwellings there are. But it is largely prices. Over those five years, the number of dwellings has risen from ten million five hundred and sixty nine thousand to eleven million four hundred and ten thousand.
So that's an increase of just eight percent. Not sixty So you can see it's largely prices. Uh they're getting higher. And are they going to get higher still? Well, yes, according to the latest forecast report from uh Domain for 2026, Dr. Nicola Powell is chief economist at Domain. So does this tell us that supply really is the issue here? Uh because it otherwise, you know, prices are rising. You'd be thinking, why wouldn't developers just be
How do rising building approvals and apartment plans affect overall price growth?
ramping up supply to try and meet this demand because surely their quids in.
Uh look, and I think uh you know, if there's a lot to unpack in in that statement. I think at the core of it, you know, suppli uh the undersupply of housing um, you know, is chronic uh in Australia. And I think the scenario that we're in today around property prices being so high, you know, we have to consider the median house price uh in Sydney is above uh just above one point seven uh million dollars. You know, that is grossly unaffordable for your average Australian. Um And we've got many of our capital cities that have broken that million dollar median house price. And that's actually happened in recent years. Uh and prices continue to rise. And we had this period of time where, you know, rates were the cash rate was rising, but property prices also rose.
And um that tells us one of those dynamics is this undersupply of housing where even though the cost of holding debt was rising, um property prices were rising as well. And this has been years in the making, right? You know, we've seen Strong rates of population growth and the supply of new homes not meeting population growth. So you know this is something that's not happened in recent years, it's something that's been building up for many years.
So interest rates go up, house prices go up, interest rates go down, house prices go up. Uh it's uh I mean is there s is there a speed at which they go up? Does that change based on the uh based on the the interest rate or is that whole dynamic starting to dissolve a little bit?
Look, there's many things that drive property price cycles and obviously uh where the cash rate moves and how much someone can borrow does obviously influence the movement in in property prices. Um and you know, I think one of the things to watch out for this year, as you mentioned earlier, was the fact we are expecting one, maybe two rate hikes this year and what we'll probably see as a result is a slowdown in price rises. You know, we're still starting to see that anyway. And I think what we'll see is once we see a rate hike being delivered from the RBA, it will slow down the pace of price growth.
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Chapters
7 chapters
1
Why is slow property turnover considered a bigger problem than housing supply?
0:00–2:00
2
How do rising building approvals and apartment plans affect overall price growth?
2:00–5:48
3
What does the five‑year rise in total housing‑stock value versus dwelling count reveal?
5:48–10:40
4
How does population growth outpace new‑home construction and drive price pressure?
10:40–16:26
5
What is ‘rent‑vesting’ and how is it reshaping demand in Sydney and other cities?
16:26–22:00
6
Why are lower‑priced homes now outperforming premium properties in price growth?
22:00–27:09
7
How does stamp duty and its bracket creep limit housing mobility and affordability?
27:09–29:42