It’s election year, and the Territory’s treasurer predicts a bright future for bricks and mortar.
There’s an interesting debate surrounding the future of the Northern Territory’s property market thanks to bold predictions by the Northern Territory Treasurer Delia Lawrie that, having gone through a slow patch, the Territory’s economy is on the precipice of another boom.
“We’re entering the perfect economic storm,” she says. “Now is the time to buy a property if you can.”
Her source, Deloitte Access Economics, certainly provides some compelling numbers. Its Business Outlook forecasts gross state product growth of 4–5% pa between the 2012/13 and 2015/16 financial years, for example, while population growth is expected to be between 1.6–1.8% pa over the same period.
The report itself, however, cautions against overoptimism, stating that “although global conditions are still extremely favourable to the Territory’s growth potential, right now this economy lacks a major growth driver,” and REINT President Quentin Killian urges investors to be wary of political rhetoric – especially in an election year.
“It’s not always great to have politicians guiding the market,” he says. “We have an election due in August, so both parties have already switched into election mode.”
He adds that it will be worth keeping an eye on “promissory handouts” towards the property market.
“Both parties realise that land release and the property market are key issues in their re-election campaigns. It’ll be interesting to see what packages they might come up with to woo the voters,” he says.
Darwin’s undersupply issue has been flagged by the HIA, who predict that the city will need to build 2,680 dwellings each year until 2020 to keep up with supply – which contrasts sharply with the city’s current construction rate of 1,200 dwellings pa according to government figures.
And, should Darwin’s much-anticipated $31.53bn Inpex gas project go ahead as planned, the associated boost to population growth is expected to further stretch the undersupply situation.
Given the pent up demand for accommodation in Darwin, Raine & Horne Darwin general manager Glenn Grantham tips the city’s CBD as the go-to zone for investors.
“The Darwin CBD is potentially the best investment in terms of growth and yield,” he says. “Values in the CBD did come off 18 months ago. However, we expect prices to return to 2009 levels and beyond.”
