The median house price in Darwin fell in September 2016 for the fifth straight quarter, sending prices down under the $600,000 mark for the first time in four years.
The Domain House Price Report for September 2016 suggests that this drop may be caused by a lack of migrants into the city, which may be an indication of Darwin’s economic issues.
Nonetheless, this situation could represent opportunities for buyers.
“The easing of prices opens the market up to house hunters who were previously unable to break into the market,” explains Andrew Wilson, chief economist at Domain Group.
“Increased affordability in the capital means that you should take the opportunity to inspect both houses and units on the market.”
The consistent performance of the unit market suggests that demand is increasing for apartments. The previous peak in apartment construction levels has left buyers spoilt for choice, and coupled with the reasonable price, this could account for the rise in popularity.
Weak market impedes development
According to Herron Todd White in its Month in Review report for November 2016, the overall poor performance of the property market and the high barriers to entry have resulted in a soft development sector.
The unaffordability of land and cost of construction are the main obstacles that keep smaller investors from looking into the Top End.
Thus it is primarily local builders that dominate this sector since they can save on building costs and gain margins from bulk land purchases directly from developers.
Duplex construction appears to be the way to go for many developers since the projects are smaller. The suburbs of choice are the northern suburb of Muirhead and the Palmerston suburbs of Durack and Zuccoli.
But until the local economy improves, enhancing confidence and inspiring growth, the NT remains in a difficult position.
SUBURB TO WATCH
Driver: Palmerston suburb falters in light of weak Darwin market
A little over 20km southeast of Darwin, Driver’s property market reflects the state of the Northern Territory.
Property prices have fallen, although returns are remarkably high at almost 6% for both units and houses. This, coupled with the very low prices, could inspire buyers to enter the market while it’s cheap, and they can have their pick of developments constructed in the early 1980s.
Other potential pluses for interested parties include the local primary school and the suburb’s ideal location within the growing city of Palmerston, which has a well-stocked commercial centre including major shopping centres, schools and sports and recreation facilities.
Surrounding suburbs include Durack, which is home to Charles Darwin University’s Palmerston campus, as well as Moulden and Woodroffe, which offer additional shopping and schooling options.
Those looking to commute to the Darwin CBD may do so by bus, and Palmerston is just a four-minute drive away.
