While a 1.7% rise in values over April could point to Darwin possibly honing a sturdier front to the virus, problems with demand continue to hold back the capital.
As head of research at Select Residential Property, Jeremy Sheppard says, “Demand has been knocked out of this relatively small housing market by negative changes in the resources sector.”
“Darwin came back to a balanced market briefly in the latter half of 2017 but slid even further. It could take a year or more for this market just to return to a state of balance,” Sheppard shares, also adding that “Rent growth has been negative for most of the last five years.”
According to Herron Todd White’s residential report for May, while Canberra’s short-term rental market has been dealt a punch – in terms of the long-term market, ‘larger agencies have indicated [that] requests for rent reduction remain quite low and that rental arrears have not spiked’.
Will Johnson, local expert at Herron Todd White, says sales agents in Northern Territory are also reporting a “stable level of interest” in existing housing market stock.
“Real estate agents have shifted to online auctions using the Gavl app, which has resulted in a handful of sold dwellings,” he says.
However, while some vendors are motivated and taking action, others have taken a more cautious “wait-and-see” approach. Johnson says that there have not been any market reductions that are out of line with recent market conditions, due to the pandemic.
Long-term residential tenancies, for instance, have remained steady. Johnson says requests for rent reductions have relatively been low and rental arrears are still in check.
“We are yet to see any firm market evidence [that] the pandemic has resulted in lower rents or capital values, the big test as we look through the forward lens is the speed at which social restrictions are lifted, and the time it takes to re-open the economy,” he says.
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