Economic problems cement Darwin’s downslide
A declining economy, dwelling oversupply and slow population growth have conspired to lower dwelling prices further
Darwin continues its downslide following the end of the mining boom, with the Top End struggling to stabilise, let alone return to growth.
This trend is not expected to break throughout 2016, with the Property Council of Australia reporting that rents dipped sharply by 13.4%.
Darwin has also been affected by the declining number of overseas investors from China and strict lending restrictions. Not even the prestige market has been safe, as sales volumes plummeted over the past year.
At the same time, research by the Housing Industry Association reveals a drop in available supply, based on dwindling home building approval numbers. With few investors or owner-occupiers having an appetite to build, these figures reflect the weak demand for properties throughout Darwin at present.
On the plus side, while the job market is expected to remain weak throughout 2016, Gareth Aird of Institutional Banking & Markets predicts that the unemployment rate should remain below the national average.
Developers attempt to rejuvenate demand
Herron Todd White notes in its latest Month in Review
report that new estates are complete and ready for occupation in suburbs such as The Heights, Durack, Bellamack
and Muirhead, and this is increasing supply levels in these areas. Meanwhile, Zuccoli has a wealth of land for development, but few people are willing to charge ahead with projects in these current slow conditions.
In Alice Springs, sales of affordable properties in the entry-level segments are especially low. However, the South Edge project in this town is sold out. Rural residences are also selling well, as are properties in the Desert Springs area.
One silver lining for Darwinians is the fact that the planning minister may be looking into the CBD Master Plan presented by the Darwin City Council. “This plan includes a number of proposals to manage the city’s growth, especially in regard to future transport links, infill housing, parking and public open space,” Herron Todd White reports.
“The plan includes some bold proposals and it will be interesting to see which of these, if any, become a reality over the next 20 years.”
Herron Todd White adds that 2016 may have seen the worst of Darwin’s problems – one can only hope this proves to be the case.
SUBURB TO WATCH
Gillen: Alice Springs giant stumbles
As one of the biggest suburbs in Alice Springs, Gillen has “the best stock in the area”, according to Nathan Roberts, sales consultant at Professionals Alice Springs Real Estate. The suburb generates much interest given its proximity to essential areas such as the CBD, which can be reached by bus or car, and hospitals.
The rental yield here is a strong 6.1%, thus indicating potential for rental growth. However, house prices have generally been flat for a prolonged period, and predicted growth moving forward is low at just 2%.
Gillen’s easy access to hospitals is advantageous for the many families in the area. Moreover, one of the main high schools in Alice Springs is situated here, and the local primary school is considered one of the best in the area. Thus, families with kids in particular are attracted to Gillen. The suburb also has parks and other recreational areas.
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