Proceed with caution in Darwin
Despite economic headwinds, there are still some great opportunities for investors in the Darwin market. It’s just a matter of being careful
The question is not so much what the future will be for Darwin’s massive INPEX gas pipeline. It’s more what Darwin’s future will be like after INPEX, says Linda Phillips, national research manager at Propell National Valuers.
This project is currently halfway through a five-year construction phase employing about 8,000 workers, which has been a major factor in the dramatic increase in the Darwin market over recent years. However, its effect appears to be losing its impact.
“There is no doubt the market within the CBD and Palmerston has seen contraction from the record levels of the past couple of years,” she says.
Additionally, the downturn in the mining industry (iron ore) has seen the port significantly wind back its exports. However, the good news for economic activity in the Top End is that the live export trade in cattle and buffalo to the Asian market is ramping up.
Indeed, more than 493,000 head were shipped out of Darwin Port last year, breaking the previous high set in 1997 at 448,196, according to the Darwin Port Corporation.
Moreover, the recent increase in Darwin tourism will be another good thing for the Darwin economy and any potential for growth in the property market.
And while there is big potential in mining exploration (which is at an all-time high throughout the NT), the high barriers of entry and lack of foreign investment prevents these projects from gaining much momentum, says Phillips.
“The short of it is that the NT has huge potential for major projects/industries, which will be supported by workers and facilities within Darwin,” says Phillips.
Where to look
Despite the fact there has been a general contraction across most sectors of the Darwin market within the last six months or so, there are still good buying opportunities available, says Phillips.
The prestige and coastal suburbs of Darwin, such as Larrakeyah
, Fannie Bay, Parap
and Nightcliff, will always be attractive options for both investors and owner-occupiers.
“Suburbs surrounding those areas, such as Rapid Creek
and Millner still offer some value for money with the potential for reasonable capital growth,” she says.
Meanwhile, the northern suburbs of Darwin including Nakara, Wanguri and Brinkin seem to be holding levels of value from last year, with agents reporting good demand.
But wherever you choose to buy in Darwin, it’s quite a challenge to buy something for $500,000 or less. “If purchasing in the entry level price bracket, avoiding the unit market within the CBD is a good idea. Perhaps looking for a gem among the rough in the northern suburbs would likely be the best bet for any future capital growth,” Phillips says.
SUBURB TO WATCH
Karama: Everything a family could wish for
Situated 14km from the Darwin CBD, Karama is one of the capital city’s northern suburbs with plenty of potential for investors. For one, it already has access to excellent amenities.
Families and young couples won’t mind the fact that it takes 15 minutes to get to the city because there are plenty of shopping, dining and education options in Karama itself. This includes the handy Karama Shopping Centre, but it is also just a short drive to Casuarina Square, which is the largest shopping centre in the Northern Territory.
As well as there being lots of schools located in the suburb, it also boasts plenty of parks and the Marrara Sporting Complex.
The tight demand in the suburb is indicated by the vacancy rate of just 2.02%, according to Real Estate Investar. And its median house price of $567,000 is cheaper than neighbouring suburbs such as Leanyer ($615,000). The rental yield of 5% is also not too shabby.
There are large houses on large blocks which are ideal for families on the quiet streets of Bernier Ct and Baudin Ct. Three- or four-bedroom houses can be picked up on these streets for less than $550,000. Properties in this area are close to bus services and are only minutes from the Casuarina Shopping Centre, schools, medical facilities and the beach.