Despite the capital’s ongoing decline, sales volumes are increasing as renovators start taking a crack at Darwin
Though the outlook for Darwin is not likely to change for at least another year, sales volumes are increasing in certain areas.
Overall, “there’s a high vacancy rate – it’s been in a downward cycle both from a jobs and a net migration perspective,” says Paul Glossop, director of Pure Property Investment.
However, some daring dreamers are looking to take a chance on the city’s low-priced homes.
“It’s not as bad as Perth – we’re starting to see a turnaround in buyer demand,” says Nerida Conisbee, chief economist at REA Group.
Herron Todd White supports this assertion, stating in its May 2017 Month in Review: “In any soft market, there is always the eternal optimist who is looking to take advantage of a good deal, and we’re now starting to see more evidence of this occurring, particularly among young investors who have their fingers on the pulse and the ability to improve dated properties at cost.
“Some sectors of the market are now starting to see resurgence. Areas of particular interest include the Palmerston dwelling market, which saw an increase in sales volumes.”
While rising sales have not necessarily translated to growth, they have not stopped the pockets of blue-chip suburbs north of the city, such as Wulagi, from catching the eyes of buyers.
“What’s driven this resurgence for certain parts of the dwelling market is the reintroduction of the FHOG [First Home Owner Grant] for existing property.
“This is particularly evident for the Palmerston area and Sanderson LGA that is typical first home owner stock,” says the Herron Todd White report.
Government investing in infrastructure
To help combat Darwin’s struggles, the NT Government has been spending more on property-related projects over the April 2017 quarter, such as the redevelopment of public sector housing in areas like Kurringal, and the Home Improvements Scheme, which aims to encourage renovators by providing discounts.
However, even with more plans in the pipeline, there’s nothing happening in Darwin that will change its direction in the near future.
“Effective policy from the NT government could have an impact in the short term. The re-introduction of dual occupancy for SD zoned allotments greater than 1000sqm would allow for the currently non-existent mum and dad developers to have an opportunity to enter the market. This would allow for the sub-division of large inner city allotments in prime locations such as Fannie Bay, Parap, Larrakeyah and Stuart Park,” suggests the Herron Todd White report.
The higher chance of capturing an inner-city home would give young residents more reason to stay in the Territory.
SUBURB TO WATCH
WULAGI: Volume of house sales increases
Less than 20 minutes’ north of Darwin past the airport, the suburb of Wulagi is struggling to maintain demand in a market that is still in decline and will continue to fall for a while.
Sales have been increasing in the house market as values have slipped to a median of under $550,000. With rental returns coming in at over 5%, a chunk of the buyers could be investors looking to take advantage of the suburb’s appealing qualities.
The suburb has a shopping centre and an oval, and it is well known for its large blocks of land and greenery. Aside from being close to Darwin Airport, it is also near Casuarina Beach.
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