The worst isn’t over for Darwin
As economic advantages continue to swing in favour of non-mining states, Darwin is set to remain a weak market for a while.
“This is a major reversal in interstate relativities from just four years ago,” states Richard Robinson, senior economist at BIS Shrapnel.
“For most of the decade to 2012, the mining investment boom saw Western Australia, Queensland and, more recently, the Northern Territory, record by far the strongest economic growth. Now, with the resources investment boom well into a substantial decline – and with more to come – the pendulum is swinging away from the mining boom regions and states. That process will continue for some years yet.”
The NT market has been quite volatile, with significant ups and downs in construction activity. CoreLogic data indicates that Darwin showed some recovery in the October 2016 quarter, but overall, the median dwelling price still dropped by 3.8% over the past year – the only capital city along with Perth to record a decrease. This was largely attributed to the considerable fall in house prices. Rental yields have dipped as well, especially for units, which could discourage investors.
Opportunity looms despite volatility
The number of new listings recently recorded in Darwin is down compared to the previous year, while at the same time, the number of days on market have shortened from 89 days in 2015 to 71 in 2016.
Darwin’s current growth pattern may eventually work in its favour, says Eliza Owen, market analyst for OnTheHouse.com.au, as its affordability could appeal to buyers looking for cheaper properties outside of the more expensive capital cities. Those buyers who are willing to wait out the decline are actively searching for opportunities at present.
In the non-mining pockets of the NT, rental rates are rising, although this follows a period of decline in rental activity. For Charles Tarbey, chairman of Century 21 Australasia, this represents the relative balance in the local property market.
SUBURB TO WATCH
Ludmilla: Inner-city suburb struggles to hold on
A little over 10 minutes’ drive north of Darwin lies the suburb of Ludmilla. It is typically associated with being a neighbouring suburb of Parap, Fannie Bay and Stuart Park. Ludmilla recorded a slight decline of 0.5% over the past 12 months, with the median house price clocking in at $629,000. The unit market suffered a stronger hit, dropping 9.9%. Nonetheless, the rental yields for both types of properties are quite high at over 5%.
The suburb is mainly a residential area, but residents have easy access to amenities in Darwin City. Darwin International Airport is just 6km east, and the shore is approximately 10 minutes away. The Parap Village Market is also nearby.
Buses run from Ludmilla to various spots, including the city, airport and Casuarina Coastal Reserve.
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