Just like Perth, Darwin is currently going through the painful process of market correction as a result of its excessive gains in recent years. Experts say this could go on for longer
The numbers are bleak. They have been so for a number of months and, as far as trend goes, there appears to be no end in sight. Not yet.
While the May figures from CoreLogic RP Data show a median house price increase of 2.6%, the market has fallen by 1.6% compared to a year ago.
The unit market suffered a bigger price drop of 4% thanks to the growing supply and falling demand for this type of accommodation.
“Affordability has been the problem,” explains Andrew Wilson of Domain. “There’s not much demand for high-end properties now. A lot of units have been built, and there’s certainly an oversupply in that market, as seen in the weakening in rents and prices.”
Buyer’s market
After enjoying strong buyer’s demand for a number of years, the tide has turned. Selling conditions across the Darwin housing market have weakened over the past year, with the housing market now in favour of buyers over sellers, according to the Commonwealth Bank-CoreLogic Home Buyers Index. “Active buyers have more stock to choose from than a year ago and their purchase decision is no longer as rushed as it once was when the market conditions were much stronger,” it says in a report.
Despite this weak performance, Wilson still sees some growth in the market.
“Darwin has probably suffered more because it got a bit too expensive and a lot of the mining companies have already shifted out because of the downturn in the resources sector. But they probably have better prospects compared to Western Australia because of their gas sector. There’s still enough confidence and energy in the local market. The unemployment rate is very low at 3%. There’s no doubt growth has weakened compared to three years ago when the market was at its peak. I expect property prices to grow by 5% this year.”
SUBURB TO WATCH
Millner: Great suburb is great value
You know you’re in an excellent suburb when there are houses available that won’t break the bank, yet have easy access to the CBD and the beach. That’s exactly what’s on offer in Millner, which is just 7km from Darwin City and close to the beaches of Nightcliff and Rapid Creek.
Millner is also near Darwin Airport, which has recently undergone a $75m expansion. Darwin’s second-largest shopping centre complex, known as Jape Homemaker Village, is in Millner, which is also close to the Nightcliff Shopping Centre, great schools, and the Charles Darwin University at Casuarina.
This suburb has experienced a 0.7% drop in prices over the past 12 months, which gives investors the chance to buy towards the bottom of the market. Houses there are also good value, with a median price of $573,000, compared to those in neighbouring suburbs such as Coconut Grove, Nightcliff and Rapid Creek, where the median house prices are $845,000, $651,500 and $675,000 respectively.
Properties on Gulnare Street and Marsh Street are close to Jape Homemaker Village, Millner Primary School, the Nightcliff foreshore, and Rapid Creek Market. Three-bedroom homes there on large blocks can be picked up for around $500,000.
