The Top End is showing signs of stability, and there is growing interest in the market – but it still faces many hurdles
With Queensland and WA either performing reasonably well or entering a recovery phase in the wake of the resources sector crash, the NT is the last of the troubled mining areas left to play catch-up. After several years of struggle, the state could finally be recording some stability, but there are still many obstacles in its path.
“The overall demand-to-supply ratio for Darwin is no different to what it was 12 months ago. It’s stabilised a fair bit but is still just under what would be considered balanced,” says Jeremy Sheppard, head of research at Select Residential Property.
“The key problem indicators include slow selling times, high discounting, too many renters, vacancies nearly at 3%, and too much stock on market.”
Nonetheless, it’s not all doom and gloom – Sheppard highlights Darwin’s high yields as a feather in its cap, and notes that this capital sees “a decent amount of online search interest”. He singles out the Alice Springs area as one that is gaining steam.
“In the Alice, which has gone through a significant change in the last 12 months, there’s some indication that things are improving. Vacancy rates are under 2% in most of the suburbs for which data is available, and online search interest is nothing exciting, but higher than what one would expect.”
A few gems shine through
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 second-placed 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
MILLNER: Rental rates remain steady
Named after Dr James Millner, who helped found the first colony at Port Darwin and served as a Protector of Aborigines, Millner was once regarded as a major growth suburb in the northern area of Darwin.
With Darwin’s fall, however, Millner has seen dwelling values drop in response. In the 12 months to March 2019, the median house value decreased to below $450,000, while unit values fell to a median of just over $250,000, making Millner a highly affordable market to buy into.
In the midst of this decline, however, rents in Millner remained unchanged in the year to January 2019 – a good sign for the rental market.
Affordability: Median values of houses and units are $438,808 and $255,755, respectively
Rent: Despite considerable negative growth in the past year, rental rates were consistent
