Dwelling prices keep on sinking across the NT as demand levels stay down and the economy remains stagnant.
“From August 2015 to August 2017, the number of jobs in Greater Darwin decreased from 83,300 to 81,200 at a time when total jobs in Australia increased by 3.7%,” says Simon Pressley, managing director of Properytology.
“Darwin’s one and only major infrastructure project, the $40bn Ichthys LNG plant, is scheduled for completion in early 2018. The cupboard will then be bare for new infrastructure projects to replace the jobs that peaked at 8,000 in 2016. We believe that a fourth year of property price falls will occur in 2018.”
According to the October 2017 Hedonic Home Value Index published by CoreLogic, values fell by 5.3% over the 12 months to October 2017, representing a drop of 20% since Darwin’s last peak in May 2014. The city’s inability to recover economically from the mining investment loss is a major factor causing its inhabitants to leave for greener pastures.
Gentle growth in the countryside
In contrast to Darwin, however, regional NT actually saw property prices increase in the October 2017 quarter. Over October alone, they increased by 1.1%, and while this growth is slight, it indicates the stronger prospect of areas beyond Darwin.
In Alice Springs, the rental market is balanced, with both houses and units in demand, according to Herron Todd White’s Month in Review report for November 2017. As rents are low and vacancy rates are increasing, many investors are choosing to try their hand at renovating and updating their properties to boost value.
Tenants in the Top End are mainly employees in the defence, education, health and trade sectors. Defence personnel in particular remain strong drivers of the housing market, with private homes being purchased and leased out. The expansion of Charles Darwin University into an international institution could also generate demand for studentaccommodation, which could inspire population growth and jump-start the rental market.
Ultimately, what the NT needs is a new project to come in or a new industry to light up the economy, especially with the Ichthys LNG project winding down and heightening the possibility of tenants exiting in droves. As a smaller market, the NT could bounce back quickly as a result of one major construction project creating a significant number of jobs, but this also leaves it volatile and open to crashes.
SUBURB TO WATCH
RAPID CREEK: Houses thrive in north Darwin suburb
Darwin may not be in a good spot as a whole, but select suburbs are sustaining positive growth.
Rapid Creek is one of those suburbs, as house prices went up by 7.3% over the year to November 2017. This follows a drop in values of 2.4% over the last three years. By contrast, the unit market has continued to plummet, with prices falling by 11.1% in the past 12 months.
Rapid Creek is the home of Darwin’s oldest market, the Rapid Creek Market. This popular Sunday market sells a wide range of fresh produce, seafood and exotic plants. To the west, Rapid Creek’s sister suburb, Nightcliff, is the site of schools like Nightcliff Primary School and Nightcliff Middle School. To the south, the suburb of Millner provides access to one of Darwin’s biggest shopping complexes, Homemaker Village.
Education: Rapid Creek is closeto shops and schools in neighbouring suburbs
Growth: Demand for houses has beeen adequate to keep the suburb growing
