Some investors might be spooked about targeting Darwin
at the moment.
For one, mining investment seems to be slowing, particularly since the $34 billion Ichthys LNG project is due to be completed in 2016. According to the latest Deloitte Access Economics Investment Monitor report, this will place significant pressure on pipeline projects such as $13 billion Greater Sunrise Gas Development and the $4.6 billion Bonaparte floating LNG project to fill the void.
And arguably Darwin has already had its growth spurt, as it’s been one of the most rapidly developing markets in Australia over the past decade.
But according to the most recent Herron Todd White report, the market seems to have stabilised, and with its proximity to Asia and persisting opportunities from the resources sector, it should still be considered a good investment option.
“If you need an investment property to help lower your taxable income, then any new unit in the greater Darwin area will do the job nicely,” says the report.
Further good news is that a recent confidence survey by the Australian Property Council and ANZ Bank shows that the Northern Territory was one of only two states or territories to have seen an increase in overall positive sentiment. This is linked to its high employment levels, growth in wages and strong gains in household spending.
And it’s also getting a helping hand from the influx of temporary workers looking for short term housing. This is just one reason for its strong rental yields compared to other capital cities.
Australia’s gateway to Asia?
The Minister for Infrastructure and Transport Warren Truss recently released the Green Paper on Developing Northern Australia, and it’s very clear that Darwin is set to play a larger role in boosting Australia’s economy in coming years.
“Darwin is shaping as Australia’s gateway to Asia – one of the fastest growing regions in the world, which will soon be home to half of the world’s middle-class by 2020,” says Truss.
“The Northern Territory has one of the lowest unemployment rates in the country and investment activity is set to increase by 7% in 2014-2015.”
In particular, 55% (or $121 billion) of Australia’s exports are shipped from the northern ports. And according to the Bureau of Infrastructure, Transport and Regional Economics, the value of exports through Darwin’s port has increased with an average annual growth rate of more than 12% a year over the five years to 2012-13.
“And there is potential for increased exports from current and new mines in the Northern Territory, LNG from the Browse Basin and growing live cattle and beef exports. A new abattoir able to process up to 200,000 head annually is under construction south of Darwin,” adds Truss.
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