Though Darwin property values were still down in the first quarter of 2019, tightening vacancies bring hope
While Darwin doesn’t look to be recording strong growth any time soon, there are subtle signs of better things to come.
Even though Darwin was still the only capital city other than Sydney to record a fall in rental rates over the 12 months to April 2019, CoreLogic’s Home Value Index indicated that in terms of annual declines it is not the biggest loser. Its rate of decline (7.1%) is in fact slightly lower than that of powerhouses Sydney (10.9%) and Melbourne (10.0%). The upper quartile of Darwin’s market, in particular, reported an improved performance.
According to the Real Estate Local Market report of the Real Estate Institute of the NT (REINT) for the March 2019 quarter, the Top End saw the first increase in its median house price in more than a year, bringing the value back to over $500,000.
Suburbs like Katherine and Tennant Creek also recorded higher sales volumes alongside increased median prices. However, sales in other parts of the NT were down in the same quarter.
“The first quarter of 2019 saw a drop of 27% in sales volumes for houses in the Greater Darwin market,” says REINT CEO Quentin Kilian.
“While Inner Darwin remained the same, the key difference was in the Palmerston market, which fell by 35%, or 39 sales.”
The decreased sales volumes extended to the unit market, in which the median price plummeted by 37%. The pockets that suffered the most in this regard were Inner Darwin (down 28%), the north coastal region of Darwin (down 62%), and Alice Springs (down 37%).
A few bright sparks
Rental rates in Darwin continue to nosedive – it was the only capital city to record a fall in rents over the first quarter of 2019, according to CoreLogic’s Quarterly Rental Review for March 2019. However, it tops the list of capital cities in terms of gross rental yield, reporting an average of 5.95% over the March 2019 quarter. This puts Darwin at a healthy distance from secondplaced Hobart’s 5.08% average.
Even the property price declines have done Darwin good – the CoreLogic Home Value Index for April 2019 notes that with the ratio of incomes to dwelling values being low in this capital, the top quartile of the property market is delivering an improved performance.
In addition, the poor economic conditions in Darwin at present have not prevented researchers from discovering hotspots in the Greater Darwin area. The Housing Industry Association’s Population and Residential Building Hotspots 2019 report identified Palmerston, Lyons and Durack as suburbs to watch.
SUBURB TO WATCH
STUART PARK:
A suburb of Darwin’s inner city, Stuart Park has been battered by the Top End’s fall over the past few years, but it may be starting to recover.
The house market saw values rise for the fi rst time since 2014 at a rate of 4.3%, bringing the median price to $724,028. The unit market, however, remains in the red, with prices falling by a whopping 16.6% in the year to April 2019 to just below the $300,000 mark.
The same trend can be observed in the rental market, as rental rates for houses increased by 3.3% in the 12 months to January 2019 but for units they dropped by 4.4%.
Growth: House prices increased for the first time in five years
Rental rates: Rental rates for houses rose, while unit rates fell
