A lucrative alternative to Darwin?
The Northern Territory’s market might be dominated by its capital, but the state can offer up another attractive option to investors
High-performing Darwin dominates the NT’s property market. With a marked shortage of available property relative to demand, yields and values are continuing to grow solidly.
Investors who think Darwin is too hot may now want to consider a more affordable yet lucrative alternative outside of the capital – in particular, Alice Springs.
As the NT’s third-largest town and a popular tourist destination, Alice Springs is less dependent on seasonal economic factors than Darwin.
The latest RP Data figures show the median house price in Alice Springs is sitting at just $435,000, while the median unit price is currently $325,000.
The Herron Todd White report notes that the unit rental market is tightening, thanks to strong demand for new units in the area.
In addition, the RP Data figures show that both house and unit rental yields in most suburbs of Alice Springs sit at a healthy 6%. In the suburbs of Gillen
, Desert Springs, The Gap and Larapinta
, unit rental yields sit at 7%. These yields offer investors the opportunity to get positive cash flow or, at the very least, to be cash flow neutral.
The Alice Springs market has a good track record, according to Hotspotting’s Terry Ryder. Long-term growth has been solid, and the market is now moving into another growth phase.
This is backed up by the region’s strong and diverse economy, which encompasses cattle stations, mining operations, tourism, transport and a number of government programmes, Ryder says.
“Alice Springs is a worthwhile option for investors to explore. It has a strong future with definite signs of growth. It certainly ticks all the right boxes.”
Traditionally, the Alice Springs market has provided very strong returns for investors, agrees Real Estate Institute of Northern Territory’s Alice Springs representative Andrew Doyle.
Further improvement in returns could be on the horizon. A number of mining companies are in discussion with the government about exploration in the area south of Alice Springs, and it is hoped something will eventuate from that scenario, Doyle says.
“Because the Alice is a very tightly held market, one big project can stimulate major growth in our market. So a mining venture like those proposed would have a significant impact on the market.”
Suburb to Watch
Affordability and close proximity to the centre of Alice Springs make The Gap a desirable suburb to invest in. It also offers fantastic views of the MacDonnell Ranges.
Nathan Roberts, from Professionals Alice Springs Real Estate, says a mixture of houses on relatively large blocks and a variety of units are available.
“Also, a few developers have invested in the area by dividing large blocks into MD blocks and building town houses and duplexes on them.”
Within walking distance of The Gap, there are a range of services, including the hospital and private medical offices, the Aquatic Centre, the sports compound of Traeger Park, Our Lady of the Sacred Heart Traegar Campus, and restaurants.
There are improved signs of businesses investing in the area, Roberts says. “A local corporation recently purchased the Memo Club, which went into voluntary administration over 12 months ago.”
There are also a number of picturesque walking and cycling paths around the area. At the moment, prices are steady, but – due to a recent surge of buyers in the market – this could lead to an increase in prices, Roberts adds.
“The streets of Clara Court and Ballingall Street provide the most sought- after properties in The Gap and are particularly popular with professionals who work at the hospital.”