The weakest market in the nation is expected to start to stabilise, with the promise of growth on the horizon
The Top End is still one of the worst performers in the country, although property prices are expected to see some small growth in the year ahead.
“I’m anticipating that the Darwin market will even out again a little. I think there is capacity within NT to move into the positive growth environment,” says Results Mentoring director Brendan Kelly.
“I reckon that we’ll see more growth and less decline, enough to take it to a low single-digit growth environment for 12 months from now.”
CoreLogic data indicate that while Darwin prices were still dropping in the June 2019 quarter, regional pockets of the NT moved into the black, with dwelling values rising by 0.2% in the month of June. This area was one of only three markets to report positive growth during this period, alongside regional SA and Hobart.
In terms of rental growth, rents slipped by 0.3% in Darwin over the June quarter; however, the city retains its crown as the top-yielding market in the country, with an average rental return of 6.02% – significantly higher than that of Hobart, which was in second place at 5.25%.
CoreLogic’s Quarterly Rental Review for June 2019 notes that while investors have traditionally looked for properties with capital growth potential, investing for cash flow from rental yield is an attractive prospect given the current low interest rates in this city. As movements in the rental market surpass the rate of change in property values, rental returns are expected to steady in the next few months.
With Darwin approaching the bottom of the market, it could be the right time for first home buyers to grab a slice of the pie while prices are becoming more and more reasonable and refinancers are finding it difficult to justify investing there, according to Herron Todd White’s Month in Review for July 2019.
Various property types across the NT offer excellent value at below $500,000, and the state government has been granting great incentives to first home buyers.
For instance, first home owners who are buying or building a new home can apply for a grant of $20,000 (limited to the first 600 applications), while a stamp duty discount of up to $18,000 is available on homes valued at up to $650,000.
SUBURB TO WATCH
ROSEBERY:Dwelling values decline further
Affordability continues to rise in the suburb of Rosebery, on the outskirts of Palmerston. Property prices fell further in the 12 months to June 2019, and the median value of houses dropped below $500,000. The median unit price edged closer to $250,000 as prices plummeted by 20.3%.
The rental market has not fared much better, with rental rates falling by around 7% for both houses and units.
Named after the fifth Earl of Rosebery, Archibald Philip Primrose, who went on to become the UK prime minister in the late 1800s, the suburb has been lauded by residents for its laidback atmosphere. There are also many parks in Rosebery for children to enjoy.
Affordability: Median prices have fallen to under $500k for houses and around $260k for units
Amenities: Rosebery has a relaxed vibe, with many recreational parks that appeal to families