The frail property market in the Top End is creating opportunities for first home buyers
While Darwin continues to report falling home prices, the slowing rate of decline suggests that things may finally be looking up in the Northern Territory.
“Median values continue to fall, with houses losing 5.16% over the year to June while units declined in value by 6.23%. However, the data suggests that the pace of losses has started to ease as the dwelling growth cycle may have entered a cyclical trough,” explains Eliza Owen, market analyst at OnTheHouse.com.au.
“In the short term, growth may come into a cyclical upswing.”
Nonetheless, this potential growth is dependent on investments in the NT. At present, many inner-city apartments are either remaining on the market longer, or being sold at low prices.
“This is largely attributed to the removal of the first home owner’s grant from existing properties and the winding down of the LNG project. Sales volumes and rents have slumped and vacancy rates continue to climb,” Herron Todd White explains in the Month in Review report for August 2016.
Moreover, Darwin’s property market is hampered by the low figures for interstate migration, home ownership and average period of tenure. Herron Todd White pinpoints the high cost of living as being a primary reason why residents move away quickly.
Housing assistance programs invite investment
In recognition of the problems plaguing the state, the NT government has implemented programs to ease housing expenses, enhance affordability and expand the choice of housing types.
For example, Real Housing for Growth allows employees in service industries to lease homes at a 30% discount, with the remaining cost shouldered by the government. In the process, jobs in the construction industry have been created, and land has been allocated in Zuccoli and Durack Heights for residential purposes.
“The current weakened property market and historic low interest rates present buying opportunities for first home buyers. Coupled with recent changes in Government grants on existing properties, there could be no better time to get onto the property ladder or perhaps even considering making the Northern Territory a long-term home,” says Herron Todd White.
SUBURB TO WATCH
Marrara: Golf-centred suburb cruises along
Less than 15 minutes northeast of Darwin is Marrara, home to the Darwin Golf Club. The club initially developed the residential part of the suburb for its courses; hence, the streets are named after golf courses.
Marrara has hit a steady period, with the house and unit markets reporting slight growth over the past 12 months. Investors can gain high yields ranging from an average of 4.8% to almost 6%. Demand here is likely driven by those who wish to stay close to the city as well as the Darwin International Airport.
Marrara residents have access to the local college, and a community centre. They can also easily reach the excellent amenities in nearby suburbs. For instance, eastern neighbour Karama is home to primary schools and a shopping plaza, while Malak contains much parkland. Buses bring commuters to and from the capital via Palmerston.
