EP. 314 - Market Update May 2025

This week, Dave, Mike and Cate tackle the May data. Darwin continues to perform strongly, but Cate eludes to the contrasting data across various data houses. Data integrity and varying methodologies of collecting and collating data may be the source of the issue. The Trio delve into the reliability and variability of data. Could off-market transactions explain the differential? Or is it something more?Hedonic indices and algorithms are another consideration… perhaps a great future episode for the Trio to unpack.

The revised past month’s data provided in the new Cotality reports are interesting too. The Trio reflect on the transparency provided as one data house formalises trends a month on.

Mike notes that every single capital city delivered growth in the month of May, and the change in dwelling values since last peak is intriguing for those cities which haven’t caught up with their last peak.

Dave steps through the monthly pace of rent for the capital cities. From seasonality to increased supply, the Trio consider the drivers of this recent change in the majority of capital cities. But what’s happening in Darwin and Hobart? And why is the rental data so misaligned for houses versus units? Tune in to find out.

And the Trio tackle some of the counter-intuitive reasons why rental prices are rising in cities like Darwin.

Mike sets a challenge… can we pick the bottom of the market by referencing the listings data? Combining new listings, all listings, ‘old listings’ and distressed listings tell us a lot, but without a heavier weight of data points, it is difficult to rely on listing figures in smaller markets like Hobart and Darwin.

Cate described the Westpac Consumer Sentiment Index as anaemic this month. Considering the current global unrest, talk of interest rate cuts and sharemarket uncertainty, the chat isn’t what was anticipated. “This chart didn’t dance around like I expected it to.”

Major household items recorded the largest change for the month, and Australian household’s saving rate goes hand in hand with this figure. The increase of the household savings ratio (5.2%) suggests that additional earnings, (and/or lower interest rates and reduced inflation) is flowing through to households.

Source: ABS
Lending data suggests investor activity has increased in the last year, (citing the March quarter 2024 to 2025).

In the Northern Territory in particular, investors are spending more. Are they pushing prices higher with greater competition, or are they targeting better quality houses than previous investors have been?

Bond yields have tracked back, and Dave suggests that global uncertainty, tariffs and the inconsistency in the US administration.

Unemployment figures have surprised more than a few people too, considering some of the narrative and predictions we’ve had previously about the likely direction of our employment figures.

Lastly, Cate marvels at the change in some of our GDP figures since the woes of post-COVID supply chain issues.

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