Down but not out of juice
The remarkable Darwin property market may be slowing down, but it’s not about to bite the dust
The 10-year mining boom had a significant impact on the NT, ushering in a long period of growth. However, as this sector continues to decline, the property market is feeling the effects. A wind-down in major infrastructure developments means thousands of contract workers have left and an oversupply of stock has pushed rental prices down.
Over the last month the market has been slow, and statistics show that prices have been slipping. The latest CoreLogic RP Data Hedonic Home Value Index showed that median dwelling values in
Darwin dropped by 1% in February; this was the worst-performing capital city across Australia.
However, REINT chief executive officer Quentin Kilian says he does not see massive doom and gloom approaching the NT.
“Darwin is still a robust market. Even though it goes through some peaks and troughs, being a smaller market it is more affected by movements in that marketplace,” he says.
“When you look at statistics they look like they’ve moved dramatically, but you’ve got to remember that it’s a very small community; it’s a very small investor market ... it looks more dramatic
than it really is.”
Kilian says vendors simply need to alter their price structure to suit the current climate.
While rental yields remain around a healthy 5%, vacancies have been on the rise in Darwin.
CoreLogic senior researcher Cameron Kusher says rental rates are showing very little in the way of appreciation. “Capital city rental growth is now occurring at its slowest pace in more than a decade... Darwin rents are -2.1% lower.”
This decrease is largely due to overdevelopment in the inner city. Kilian says a number of developments finished at a similar time, which in turn flooded the rental market.
“Sales were spectacular. But the great majority of those were investors, so they’ve come back to the marketplace in the form of rentals. That’s put a lot of pressure on the rental market, so that’s pushed the rental prices down.
“We are seeing a pick-up in the rental market over the past month. However, we do put a lot of that down to internal churn. So people who have been renting older properties at higher prices are now looking at the market and thinking, ‘I can move to a newer property’.”
Kilian predicts there will be no significant increase over the next year, but this is not necessarily a bad thing.
“It opens up the market to more buyers. It makes it more attractive for renters to stay in that market, because it has a bit more affordability.”
Additionally, the combined number of international and domestic visitors to the NT increased by 13% to 1.34 million visitors for the 12 months to September.
SUBURB TO WATCH
Moulden: Changing perceptions of southern suburb
A word that keeps popping up when talking about Moulden is value. Sitting 22km out of Darwin, it has not always had the best reputation, but as prices continue to rise perceptions are changing.
With a median house price of $480,000, Moulden is currently one of the most affordable suburbs in Darwin. With a vacancy rate of just 1.26% and 25% growth over the last five years, this suburb could have real potential.
The area is increasingly popular with families and established couples. There are several schools in the area, as well as parks and reserves, including the Marlow Lagoon Recreation Area. The Palmerston Leisure Centre provides swimming facilities, a gym, a health club, barbeque areas and tennis courts. There is also a golf club and a campus of Charles Darwin University.
The main commercial hub in nearby Palmerston includes supermarkets, a library, restaurants, cinemas, bakeries and automotive services. Bus services operate throughout the suburb and a drive to Darwin takes under 20 minutes.
Homes that offer secluded living are more favoured in this area. Four-bedroom houses perfect for families can be found on Calandrinia Court and Cuthbertson Crescent for under $400,000.