Darwin remains a volatile market
At the end of last year, Darwin reported an increase in property prices for the first time since 2015.
“The November results show a rise in transaction numbers across the Darwin market over recent months,” says Tim Lawless, CoreLogic’s head of research.
This suggests that market conditions have improved somewhat. However, Lawless adds that small cities like Darwin tend to be more volatile.
This view is supported by the director of Metropole Property Strategists, Michael Yardney.
“I’ve always found investor-driven markets like Darwin are more volatile than our big capital cities, and that’s why I avoid them,” Yardney says.
“The Darwin property market is still in the slump phase of its cycle, with prices likely to fall further over the year and few growth drivers on the horizon. Darwin’s current economic downturn has led to high unemployment rates and a slowdown in population growth.”
Darwin’s silver lining
Even so, there may still be a silver lining for Darwin buyers. For instance, Nerida Conisbee, chief economist at REA Group, suggests that price declines in weak markets like Darwin are set to moderate.
The chairman and owner of Century 21 Australasia, Charles Tarbey, also believes that through careful strategizing investors can get value out of this capital.
“The Northern Territory has continued to be heavily affected by the mining downturn, which has had a substantial impact on the marketplace in recent times,” Tarbey says.
“CoreLogic reported that the Darwin market saw a 0.9% increase in dwelling values in 2016; however, it saw a strong final quarter of the year with a 5.9% increase in values. I think it can still be a good area to invest in, but with discretion and appropriate caution.”
In terms of infrastructure, the project involving the Preferred Long Term Katherine Heavy Vehicle Alternate Route is in the consultation stage. This initiative aims to further improve the tourist experience over the long term by preventing heavy vehicles from clogging up main roads.
Other local government projects include the upgrade of Stuart Highway in Alice Springs, which is expected to be completed in late 2017.
SUBURB TO WATCH
Howard Springs: Natural beauty still a drawcard
The suburb of Howard Springs sits in the outer rural part of Darwin. It is known for being Darwin’s first source of water supply in the 1930s.
Despite being a rural suburb, Howard Springs has undergone development in recent years. Since the slowdown in the Darwin market, the suburb has faltered slightly but still offers investors a reasonable yield of 4.5%. The average vacancy rate has also been dropping progressively over the past two years, suggesting there is growing demand for properties here.
The suburb is home to the Howard Springs Reserve, which teems with fish, turtles and other sea creatures. There is a walking trail, and the reserve serves as an outdoor recreational facility for picnics and barbecues.
Howard Springs is less than 30 minutes from Darwin by car and roughly 15 minutes from Palmerston City. Locals are therefore close to many city amenities such as shopping districts, dining establishments and schools. Bus services are also provided for commuters.
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