Darwin property prices added another 3% in the November quarter after notching up 3.20% over the previous three months. This gain lifted median house values to just under the $500,000 mark according to Residex.
RP Data-Rismark National Home Value Index similarly showed a stunning performance for Darwin over the first 11 months of 2009. House values jumped by a staggering 17.9% to $445,000 at the same time recording the highest gross rental yield at 5.7% for houses and 6% for units.
With prices doubling since 2006, Darwin is experiencing one of the longest bull runs in Australian property markets' history. And it seems at least at the moment, this robust growth has nowhere else to go but up.
"Darwin home prices have boomed continuously since 2002 and rents accelerated, buoyed by continued solid population growth gains, high average household incomes and a limited housing stock," says Paul Braddick, head of property and financial systems at ANZ. "We expect dwelling completions to fall to 1,250 in 2009-10 which is insufficient to house expected population growth of over 5,000. Consequently, housing market conditions will continue to tighten and push prices higher," he says.
Demand far outstrips supply
"Property prices will have a natural cap to them – there is a point at which people will stop paying more and more" says Quentin Kilian, CEO of the Real Estate Institute of Northern Territory. "The key problem is that there isn't enough land released in the Northern Territory. And it is a state-wide problem," he says.
"We have population growth of 2.4% according to the ABS, which means our population growth is far outstripping our available housing stock," he says. "And that's not just a problem in Darwin – Alice Springs and Katherine are both suffering from chronic housing shortages."
Buoyant labour market conditions have also seen the NT employment up a remarkable 4.5% over the year to November, which has lowered the unemployment rate at just 3.5% according to Braddick. "Employment opportunities continue to attract new migrants and population growth remains strong."
This means that even the reported delay in the Inpex gas plant is unlikely to have negative impact on this rampant growth. Chris Deutrom, director of residential, Colliers NT Deutrom says house prices are likely to keep going up. "It's not totally Impex [gas plant]- driven but a lot of people are taking into consideration that their prices are a reflection of what might happen in two years."
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