Decline is still the name of the game for Darwin, but the city is showing subtle signs of eventually turning around
Darwin has continued to be one of the poorest performers in the Australian property market, and prices are still on a downward trajectory after several years. However, the tide could be close to turning as more and more small signs of positivity are puting some sparks back into the market.
“We started seeing a recovery in demand in 2017, but it’s going up and down from quarter to quarter,” says REA chief economist Nerida Conisbee.
This volatility is in part driven by the general weakening across the country, according to CoreLogic’s head of research, Tim Lawless. In the company’s Hedonic Home Value Index, released in January 2019, he noted that although Australia’s two largest cities were the primary drivers for the weaker national reading, “most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017”.
Nonetheless, Lawless points out a bright spot in the report’s findings: Darwin was one of two exceptions to this. In fact, the Top End’s annual rate of decline fell from 8.9% to just 1.5% over 2017–18. This suggests the price freefall is easing up.
In his outlook for 2019, Lawless says, “The Darwin housing market has recently seen a consistent, but subtle, rise in dwelling values, with values holding relatively firm in the 2018 calendar year after sliding by close to 24% since values peaked in 2014.”
This could bring investors back into the fold this year.
Rents are down
The rate of decline may have lightened up, but in the same 12-month period Darwin’s rental rates dropped by 5.8%.
“Migration rates remain weak and with no sign of large-scale infrastructure projects on the horizon to aid in kick-starting economic conditions and jobs growth,” says Lawless. “With uncertain national economic conditions ahead, it’s difficult to determine where the growth drivers will come from.”
Herron Todd White’s Month in Review report for December 2018 puts the spotlight on initiatives that are underway to address the infrastructure issue, such as the Commonwealth Government’s City Deal for Darwin. The focus of the deal is to work with Charles Darwin University to attract more international students.
STUART PARK: House values take a positive turn
The suburb of Stuart Park has made its first stride towards breaking a pattern of negativity that has been observed for a number of years.
The house market finally took a positive turn for the first time since 2013, with values rising by 1.6% to hit a median of $707,035 in the 12 months to December 2018. On the flip side, units did not fare so well, as prices plummeted by 15.2% to a median of under $330,000.
Nonetheless there is some demand, as evidenced by the fact that houses and units spend an average of just 52 and 68 days on the market, respectively.
Affordability: Units have a median price of $326,513, making them quite low priced for the market
Time on market: Properties on sale in this suburb spend approximately two months on the market
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