Set alongside one of Central Australia’s most popular scenic attractions, the MacDonnell Ranges, a solid tourism-based economy makes Alice Springs an appealing place for property investors.
Tourism generates 24% of the region’s economy, according to a recent Tourism Research Australia report, while mining, agriculture, and defence, are other key industries for the town. Together, these bring a lot of people into the area; not just tourists either, but also contractual workers and their families.
All travel operators in the territory have bases in the town, while 3.7% of the workforce is employed in the hospitality and accommodation sectors. The Northern Territory government is also a significant employer in Alice Springs, employing 7.5% of the town’s working population.
It’s the second largest town in the Northern Territory and is situated almost halfway between Darwin and Adelaide. A long 18-hour drive from Darwin, the town is a major service centre for nearby communities and caters for a regional population of more than 30,000. According to ABS estimates, the town has experienced population growth of 4% over the last four years, with strong demand but limited housing stock making for a competitive rental market.
Five people are looking at every available property, says property site realestate.com.au, with renters making up 39% of the property market in 2006, according to SQM Research data. Meanwhile, rental yields sit at a solid 6%, with RP Data July figures putting median advertised rent for houses at $500pw. SQM Research estimates also recorded vacancy rates at a low 1.3% in August this year.
President of the Real Estate Institute of the Northern Territory, Quentin Kilian, says property investors can expect these trends to continue.
“As long as the demand stays there, and we don’t see any reason it shouldn’t, and supply is low, your prices are going to be high,” Kilian said.
Alice is also relatively affordable, with median house prices in Alice Springs sitting between $400,000 and $450,000. Investors should also note rising incomes in the town, with ABS estimates showing average salaries as having increased $4,988 in the three years to 2008 to $42,796. Simultaneously, unemployment fell between 2005 and 2009 from 5.7% to 2.4%, indicating increased productivity and wealth in the local economy.
Elders Alice Springs sales agent, Lindsay Carey, says ongoing employment opportunities in the area means investors can be assured healthy rental returns on their properties.
“You can spend $400,000 inter-state and get $300 a week rent, but here you get a three-bedroom house and close to $500 a week rent. Your investment opportunities and returns are very strong,” says Carey.
Government plans to subdivide land for housing in southern Alice Springs are expected to boost activity in the town’s property market, and provide investors with more rental opportunities. This, teamed with an already strong rental market and buoyant local economy, ensures Alice Springs will not only remain the ‘Red Centre’ of Australia, but also a centre for investment opportunities.