Darwin has one major factor in its favour at present, as it is recording the highest rental yields in the country, along with Hobart.However, this does not mask the Northern Territory’s shaky status.
However, while the yields may be strong, the actual return investors are receiving are not. In recent months the Top End has continued to see rents plummet, by a whopping 14.1% as of August 2016, according to CoreLogic.
The NT was also the only state to record a decrease in overall median rents since July 2016.
“This trend is not expected to break throughout 2016,” reports the Property Council of Australia.
“Darwin has been affected by the declining number of overseas investors from China and strict lending restrictions. Not even the prestige market has been safe, as sales volumes plummeted over the past year.”
Data from the Housing Industry Association indicates that supply is falling in response to low demand from homebuyers. The decreasing number of building approvals also reflects a lack of desire to develop properties.
New houses key to attracting first home buyers
According to Herron Todd White’s Month in Review report for September 2016, classic elevated homes in well-located suburbs, such as Larrakeyah and Parap, remain in demand.
First home buyers who are looking for affordability go for areas like Malak and Karama, which are further from the city, to facilitate their entry into the market.
Regardless of the suburb, one commonality remains: first home buyers prefer to opt for new, low-maintenance dwellings to take advantage of government concessions like stamp duty and first home owner grants.
“The lack of first home buyer concessions is hitting the older unit segment the hardest and we see no positive movement in this sector at all in the short to medium term without some governmental influence on the situation,” Herron Todd White states.
SUBURB TO WATCH
Parap: Inner-city suburb shares in Darwin struggle
Located 3km north of Darwin, the suburb of Parap boasts of streets named after Australian explorers. It is a central suburb that is typically associated with neighbouring suburbs Fannie Bay, Ludmilla and Stuart Park.
Parap’s house market saw a slight decline of 0.8% in prices, but returns remain high at 5.1%. This decrease may also end up spurring demand as properties become more affordable.
Parap is best known for its markets– in fact, the Parap Shopping Village is considered “Darwin’s premier boutique shopping centre”. There are also many restaurants, a tavern and a public pool. The Darwin Railway Club is a great social venue. Families will also appreciate having Parap Primary School in the suburb.
Although Parap is primarily residential, its locals have easy access to amenities in the city due to Darwin’s proximity. Buses run a convenient daily service to the city and back, which takes only about 15 minutes.
