When it comes to property prices, Darwin premier suburb Bayview knows a thing or two about disappointment. You wouldn’t know it by looking at the suburb’s large, stately houses, surrounded by beautiful Mangrove trees and winding creeks, but the area is Darwin’s worst performing market of late.
The reasons behind the area’s recent demise reveal much about what is happening in Darwin as a whole. RP Data figures indicate median price falls in Bayview of 41% in the 12 months to May, and when looking across the city to its south-eastern regions, a pattern emerges. In contrast to established suburbs such as Bayview, newer areas including Palmerston are doing quite well. In fact, the 16 suburbs that make up Palmerston account for 42% of all property sales across the city.
Palmerston suburbs such as Bellamack and Farrar are leading the pack in recent price performance. The former saw prices growth of 17% in the 12 months to May, while Farrar currently enjoys the highest average annual growth rate in Darwin at 35%.
“A lot of Palmerston is very popular with buyers,” says president of the Real Estate Institute of Northern Territory Quentin Killian. “In amongst more upmarket suburbs, there are a few key markets that are transforming from lower socio-economic areas to places that appeal to a greater mix of incomes and that’s probably a reason for certain areas showing a lot of growth.”
Backtrack to Bayview and other suburbs on the inner-city fringe and the climate becomes one of poor performance. Joining Bayview among Darwin’s worst performers is Nightcliff, Fannie Bay and Stuart Park, which are all areas within 3km of the CBD. All have just scraped double-digit falls over the 12 months to May, and when this is considered against some of the high performing areas of Palmerston it is clear that prices growth remains erratic across the Northern Territory capital.
The way for growth
Looking at the city as a whole, BIS Shrapnel senior manager Angie Zigomanis believes that prices should start a period of growth, and it will happen quite soon. He says that population growth and good employment figures should contribute to making the city’s current dwelling deficiency more acute and this will support price increases.
“We anticipate a rise of 15% in median house prices in the three years to June 2015,” he says, adding that prices growth will be strengthened by a robust resources sector.
In this regard, Zigomanis believes that Darwin’s ailing price performance last year could be explained by a winding down of mining expansion projects that was largely brought about by a knock-on effect from the global financial crisis. Since then, he believes prices stabilised somewhat over the beginning of 2012, leaving the market poised for a growth period.
He adds that sentiment will play a part: “Confidence appears to be returning with the announcement of major new resources sector investment, and this should maintain the momentum in the house price growth that is emerging.”
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