Darwin lays claim to an unenviable title, recording the highest proportion of resale losses since 2002 of all the state capitals.
Slow population growth and a low net interstate migration rate have contributed to this decline, which is also largely driven by the fact that resource-reliant states are still struggling due to the industry’s downfall, reports Eliza Owen, market analyst for OnTheHouse.com.au.
Dwelling approvals are falling as well, at a year-on-year rate of 12.7%, to match the dwindling demand, although unit approvals were still up by 0.6% in the September 2016 quarter.
Incentives spur the entry of first home buyers
Nonetheless, conditions are improving for those trying to gain entry into the property market.
As of 1 September 2016, first home buyers have been offered stamp duty concessions amounting to a maximum of $24,000. Upon purchasing a new dwelling, the first $500,000 will be free of stamp duty. The incentive is capped at a home value of $650,000.
Suburbs in the north are a good entry point for new homeowners, and these areas have become popular with the younger demographic. The older suburbs in Palmerston are expected to catch the overflow from this demand, thereby enhancing market activity and shortening the time on market. Herron Todd White indicates that the flow-on effect will help property owners upgrade as well.
While Alice Springs has long been facing challenges, properties in the upper market range of $650,000–$750,000 are seeing good demand both within the town boundaries and beyond to the rural pocket.
“There are still many negative economic factors surrounding Darwin and as the population continues to fall, the basic supply and demand principles would suggest that prices won’t be drastically spiked by these new incentives,” Herron Todd White notes.
“The greatest benefits will be more sale transactions, shorter marketing periods and more opportunities for people to enter the property market.”
SUBURB TO WATCH
Sadadeen: Alice Springs’ eastern neighbour benefits from good location
The suburb of Sadadeen, situated 3km southeast of Alice Springs, is an affordable option for those wanting to live within walking distance from the town centre.
While prices have dipped slightly in response to the Northern Territory’s slow market, Sadadeen’s average rental yield is remarkable at over 6%.
Moreover, residents can easily travel to nearby suburbs and into town via bus, where the amenities include a hospital and restaurants.
Sadadeen is also close to a hub of culture, where the local museums and Todd Mall celebrate Aboriginal art. There are also schools situated in historic buildings within the vicinity.
