The Northern Territory’s capital looks set to follow a similar trajectory to its western cousin Perth, but could there be hope on the horizon?
The NT’s days may be numbered. Come 1 July 2018, the Territory is planning to be a territory no more, instead becoming Australia’s seventh state.
While the name is up for grabs, one thing’s for sure: the Top End will retain its place as one of Australia’s most volatile property markets. With capital Darwin hosting a smaller population than most NSW regional towns – and other NT cities even smaller – it only takes a small change in fortune to produce significant swings in the property market.
The resources slowdown is far from a small change in fortune. Like many of its WA counterparts, from Port Hedland to Perth, the end of the mining boom – and subsequent disappearance of fly-in fly-out workers – has hit Darwin’s housing market hard, with price falls across the board.
The median property value fell 2% between September 2014 and August 2015, according to CoreLogic RP Data. The average house price fell 2.1% and the average unit price 1.7%.
Even so, the average price of a property in Darwin has remained above the half-million mark at $527,500, making it Australia’s fourth most expensive city above Perth, Brisbane, Adelaide and Hobart.
Darwin’s downward trajectory is set to continue with the ongoing impact of the resources bust, but Domain chief economist Andrew Wilson suggests other industries could help mitigate the slide.
“Darwin isn’t just an iron exporter; it has a wider reach in terms of the NT export markets and a strong tourism industry. Plus you also have the offshore gas fields, which are still quite strong,” Wilson says.
Price falls over the last year have meant that affordability pressures are beginning to balance themselves out, he adds.
“Buyers are becoming more active and there are early signs of Darwin bouncing back with more sustainable outcomes,” Wilson says, highlighting prestige suburbs such as Fannie Bay as trailblazers for any recovery. However, vacancy rates remain high: SQM Research reported a citywide vacancy rate of 3.5% in July 2015.
At the crossroads
Property Power Partners founder John Lindeman suggests Tennant Creek as a potential location for investors on the hunt for rental yield. “Tennant Creek is a regional administration, transport and service hub at the crossroads of the Bruce and Sturt Highways. It’s got the highest rental yields in the state but also hasn’t suffered from decreases in property prices in order to achieve those yields,” he says.
Spring outlook
- Market conditions: In correction
- Segments to watch: Prestige suburbs which have seen price corrections
- Segments to avoid: suburbs with high vacancy rates
- Potential hotspots: Fannie Bay, Tennant Creek
SUBURB TO WATCH
Anula: Quality suburb to watch
Not only is Anula just 9km from the Darwin CBD but there is also plenty happening in and around the suburb itself. For starters, it is close to some of Darwin’s best amenities, including Casuarina Beach, Charles Darwin University and Darwin International Airport. And the beauty of the latter is that it’s not near enough to be affected by lots of noise.
Anula is also not far from Casuarina Square – the largest shopping centre in the NT – where it’s planned for a Myer to open in 2017.
Residents of Anula have a healthy amount of money to spend there, as the median weekly household income is a cool $1,870 ($634 above the Australian average), according to the latest ABS quick stats.
And despite having a median house price of $563,500, the average rental yield is a strong 5.8%, according to OnTheHouse.com.au.
Three-bedroom houses with pools are a good option for families. They can be found at a reasonable price (circa $480,000) on Shackle Street. They are close to schools such as Moli Primary School and Anula Primary School, in addition to parks and a medical centre.
Meanwhile, there are three-bedroom houses valued at around the $600,000 mark in the quiet cul-de-sac of Albion Court. They are close to the North Lakes Shopping Centre and Darwin Golf Club.
