First home buyers amp up activity in Darwin as affordability improves, while low-priced regional areas see value increases
House prices may be falling steadily across the country, but in a surprising turn of events the Top End experienced some positivity. According to CoreLogic’s Home Value Index for May 2019, the NT was one of only three states – the others being SA and Tasmania – to record increased property values in May.
Nonetheless, overall, Darwin remains the weakest performer of all the capital cities, with property values falling by 3.3% over the three months to May. This has pulled the city’s median dwelling price down to under $400,000. Since the mining downturn began, property values have dropped by nearly 30% as economic conditions remain weak – in fact, Darwin’s prices have not been this low since March 2017.
The affordability of this market has a silver lining, however. First home buyer activity is on the up as Darwin has become one of the most affordable cities in Australia. It also remains the capital city with the highest rental yields in the nation at an average of 6%.
Outside of Darwin, the most low-priced quartile of regional NT reported a strong price hike of 11.3% over the 12 months to May 2019. Mid-priced properties increased in value by 1.9%. In contrast, the most expensive regional pockets saw prices slip by 0.2%. This is a fairly healthy outcome compared to results in the metro.
In terms of value of sales, the suburbs of Humpty Doo and Moulden in Darwin stood out from the pack in the year to February 2019, with an increase in total sales value of 86.7% and 88.6%, respectively.
On the flip side, the total value of sales in regional suburb Desert Springs was halved compared to the previous year.
“Overall sales [volumes] were down 37% for the March 2019 quarter. The main differences were in Inner Darwin, which saw a drop of 28%, or 24 sales, and Darwin North Coastal, which was down 62%, or 30 sales. Alice Springs also saw a fall of 37% in unit sales volume, which equates to 14 fewer sales,” says Quentin Kilian, CEO of the Real Estate Institute of NT.
Nonetheless, the rental market in the state leans towards units, and unit vacancies dropped by a considerable 3% over the quarter in Palmerston.
SUBURB TO WATCH
MARRARA: Prices continue to plummet
The suburb of Marrara keeps on spiralling downwards, and property prices fell in the double digits over the year to June 2019.
This continues a signifi cant negative trend recorded since 2014, taking median values lower and lower. House prices have fallen to $512,088, while unit values are now under $250,000. The rental market has felt the effects as well, with unit rental rates decreasing by 5.3% to an average of $360. Nonetheless, unit yields are high at an average of 6.2%. Meanwhile, rental rates were steady for houses, although returns were lower, at 4.3%.
Marrara enjoys an advantageous location near Darwin International Airport.
Yield: Units offer high rental returns of 6.2% on average, upping their appeal to investors
Location: Marrara is conveniently situated close to Darwin International Airport
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