Despite a surge in home buyer enquiries, investors are setting their sights on other markets in the Top End. This trend comes amid another strong economic performance for NT, but how long will it last?
Homebuyer enquires have shot up in Darwin and Palmerston, but investors don’t have much to do with it. In fact, the 30% increase in enquiries over July are actually due to owner-occupiers, while investors are targeting the off-the plan market, according to Rain & Horne Darwin.
Current market conditions have owner-occupiers flocking to open homes, while investors are more subdued as hundreds of off-the-plan properties are finalised, says Glenn Grantham, General Manager at Raine & Horne Darwin.
“Once these settlements are finalised, we are very confident that the excellent economic outlook for Darwin, coupled with the Federal Government focus on Northern Australia, will entice investors back to bricks and mortar in decent numbers within a year,” says Grantham.
“This gives owner-occupiers a 12-month window to make a mark before they will again be forced to jostle with cashed-up investors for quality, well-located Darwin properties.”
Is the economy nearing its peak?
The $34 billion Ichthys LNG project is accounting for 50% of current NT investment and this is expected to dominate the Top End’s investment agenda until its completion in 2016, according to the latest Deloitte Access Economics Investment Monitor Report.
This alone should be enough to support strong investment in the NT over the next couple of years, but beyond that there could be some tough challenges.
A lot is riding on the final investment decision later this year on the $13 billion Greater Sunrise gas development and floating LNG platform.
The main worry for the NT is its population growth, which is lagging other states and territories and checking activity in home purchases and constructions, according to CommSec’s State of the States report. The annual population growth is near two-year lows, at 1.69% and down almost 7% on the decade average.
But for now at least, it is leading all other states and territories on economic growth, business investment, unemployment and construction work.
Affordable housing takes off in Alice Springs
In an effort to make Alice Springs more attractive to homebuyers, the first development of units is being fitted out in Larapinta Drive as part of a $8.6 million project by the NT government.
It features 14 three bedroom units and 11 two bedroom units, built as detached and semi-detached dwellings. The aim is to boost the housing options available to prospective buyers and renters, because Alice Springs “desperately needs” more affordable housing, says NT Chief Minister Adam Giles.
Suburb to watch
Driver: High yield, high growth suburb
The suburb may be called Driver, but residents don’t have much need for cars here. Great schools, parks, shops and restaurants are not difficult to get to by foot. And if you do have something on four or two wheels, it’s only a short distance to the main road into the Darwin CDB (that’s just 15 minutes away). The Palmerston CBD is also right next door, and the City of Palmerston (which includes Driver) has been identified as a “growth” focal point of the Greater Darwin Region.
According to Raine and Horne Darwin an increasing number of people are heading to Driver on the lookout for apartments, particularly ones which are well-presented and modern-looking. For example, a newly refurbished apartment in Driver which was last sold in 2008 for $212,000 has recently been put on the market for $335,000.
“In more recent times, older apartments were not attracting much interest at all, although the recent refurbishments have definitely helped push this apartment to the top of the shopping list,” says Glenn Grantham, general manager, Raine and Horne Darwin. “In Palmerston, the presentation of a property is critical to attracting buyer interest and landing a sale.”
Streets in and close by to Lorna Lim Terrace provide outstanding opportunities for tenants due to their location. Properties here are within walking distance of the Palmerston CBD, the university, shops and restaurants which are perfect to service Driver’s young demographic . Indeed, this suburb has a median age of just 28 (nine years below the national average), according to the ABS.
