The Top End began 2019 on a low note as Darwin remains at the bottom of the national market
While Perth is well on its way to recovery, Darwin is still very much stuck in a downward spiral.
“Remove Sydney, Melbourne and Darwin from your mind. It will be several years before new growth cycles commence in these three cities,” says Propertyology managing director Simon Pressley.
October 2018 housing finance data from the Real Estate Institute of Australia (REIA) supports this outlook, with the Northern Territory recording the largest drop in growth at 2.6%.
Darwin also recorded the largest decline in the prices of dwellings other than houses in the September 2018 quarter, and the rental market has performed no better.
“Darwin was the only capital where the median rent for three-bedroom houses declined,” says Malcolm Gunning, outgoing president of REIA.
CoreLogic data also indicates that Darwin, along with Sydney, had the weakest rental conditions among all the capital cities. Landlords collected 5.1% less rent in November 2018 than they did in November 2017.
With CoreLogic research analyst Cameron Kusher predicting “more of the same” conditions throughout 2019, things continue to look bleak for the Top End.
Positivity in Alice Springs
A region that is showing some promise in the NT is Alice Springs, where the unit market recorded a little growth over the 12 months to September 2018.
According to CoreLogic’s regional market update, unit prices in Alice Springs rose by 1.3% to hit a median of $306,881. While its house market did not fare as well in the same period, with values slipping by 1.5%, the area did experience 4.8% growth over the five years to 2018. Both houses and units also generate considerable average rental returns, at 6.2% and 7%, respectively.
There are those who have faith in Darwin’s ability to spring back, such as REA Group’s chief economist, Nerida Conisbee.
“We started seeing a recovery in demand probably about 12 months ago, but it’s going up and down from quarter to quarter,” she says.
“It’s not a quick recovery, and things will go up and down for a little while longer. It’s a smaller city – it’s more sensitive to changes in employment. But if you’ve got someone who really understands the Darwin market, then that’s good.”
SUBURB TO WATCH
NIGHTCLIFF: Demand for units is up
The Top End is not yet out of the dark as prices continue to freefall. Nonetheless, some positives can be found in the suburb of Nightcliff.
Its values have been recording negative growth since 2013, but the decline in the year to December 2018 has not been as severe, with a drop of 2.2% and 4.9% in house and unit prices, respectively. Units in particular have been become affordable, at a median price of $301,533, and the fact that units spend an average of just 53 days on the market before being snapped up suggests a boost in demand. Sellers are also able to unload such properties at the asking price, with the average discount being just 0.5% in the 12 months to October 2018.
Discount: Units in Nightcliff are selling at a very low average discount of 0.5%
Affordability: Units are becoming more affordable, at a median price of just over $300,000
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