The property market in Darwin has been in a lull for well over a year now. Latest figures suggest that the market, like others around Australia, is treading water. Residex figures for June indicate that house prices have gone nowhere over the last year – falling by 0.9% – and that units have gone backwards by 5.6%.
While a largely depressed market, and affordability constraints certainly has something to do with this, it’s also clear that the Northern Territory is suffering from a lack of economic drivers at present. REINT President Quentin Kilian agrees that the market’s slow – but insists that things are looking up.
“The mood is more optimistic – it’s starting to drift upwards again,” says Kilian. “The general feeling is that the market is robust, but will be quiet a little while longer. ”
The glacial progress of the biggest infrastructure project to hit the Northern Territory, the Inpex project is to blame. This $12bn offshore gas project recently received the go-ahead from the federal government, but a final investment decision isn’t expected until November.
That, says Kilian, has put the market into “wait and watch” mode.
“Darwin agents have seen more investor interest over the last couple of months,” he says. “It’s not showing up in activity yet, though: they’re more sitting on sidelines and looking to see what’s available.
Kilian suspects that many investors are waiting until the ink’s dry on the Inpex deal before committing – and he’s confident that the said agreement will go ahead.
“Inpex held a briefing with the business community in July, at which the company indicated was everything going in the right direction,” adds Kilian.
However, the market isn’t completely stagnant. Kilian highlights some promising signs that things are already starting to move.
“Recorded house sales in the greater Darwin area jumped by 26% in May, but median price dropped 6%,” he says. “This could be down to buyers buying cheaper properties, as well as vendor expectations adjusting to the market.”
He also comments that some of the movement could be thanks to properties in the new Palmerston suburb Bellamack
beginning to settle. Kilian also highlights that rental yields remain robust, with yields consistently between 4.5% and 5% with “very lean” vacancy rates.
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