Darwin’s affordability makes it a buyer’s market, and rising interest from investors could signal a turnaround in fortune
The Top End is still performing poorly, but there are positive signs on the horizon.
“It’s slightly ahead of Perth in the cycle and is a little more positive,” says Nerida Conisbee, chief economist at REA Group.
However, the market is still quite fragile – the loss of major projects, resulting in fewer job opportunities, could restart the downslide. Therefore Conisbee tells buyers to be careful in this small market.
“Darwin continues to be a market unto its own,” adds Charles Tarbey, chairman and owner of Century 21 Australasia. “We have seen a negative growth pattern in the state – it is likely this may plateau over the coming months.”
Over the May 2017 quarter, property values fell by just 0.1%. Moreover, NT was the sole state to see apartments outperforming houses in the market, according to CoreLogic’s April 2017 Quarterly Housing and Economic Review.
The government has also been increasing incentives for renovators to enter Darwin, offering a Home Renovation Grant and a Home Improvement Scheme, which enables them to save up to $20,000 on reno costs. The northern suburbs are particularly sought after by renovators, given the presence of older houses constructed in the 1960s–80s.
Buyers here are mainly owner-occupiers seeking to up the value of their properties. The reno work is done to preserve their properties, add to their potential yield value and limit the need for maintenance.
Investors eye affordable supply
Once the Darwin market bottoms out, it could end up being a good investment.
“Darwin offers a wealth of untapped opportunities for savvy property investors,” comments Gregg Harris, general manager of NAB retail.
“There are positive signs for the broader market, which suggest Darwin is undergoing a resilient turn-around and is overcoming the resource sector downturn.
Whether you’re a first home buyer, upsizing, downsizing or investing, there are Darwin properties to suit everyone.”
The number of dwellings on the market has fallen considerably compared with last year, indicating that demand is there. This demand is likely fuelled by the affordability of homes here, which have a median price of under $500,000, with potential yields of nearly 5%.
However, Harris acknowledges that Darwin still has a long way to go before it really recovers.
“Residential property supply continues to outweigh demand. And for homeowners looking to shift their homes or investments, the higher levels of supply mean properties are taking longer to sell and may likely be discounted.”
SUBURB TO WATCH
NIGHTCLIFF: Premium suburb stumbles in falling market
Despite being one of the Top End’s premium suburbs, Nightcliff is beginning to baulk under the pressure of Darwin’s weak market.
Property prices fell over the past year, although the decline has not been too significant. House prices are still high, at a median of $781,305, but units have become more affordable at just over $400,000.
With the yields for houses being a high 4.5%, however, now could be a good time for investors to get into this market while values are accessible. Nightcliff is a sought-after suburb with a lively community – every Sunday the Nightcliff Markets celebrate music and food. The Nightcliff foreshore is also a beautiful spot for walking and beach activity.