Buying property in Darwin hasn’t been this affordable in a very long time. Only a few years ago Darwin briefly overtook Melbourne and sat 2nd only to Sydney for the highest median property price in the country.
The top ends capital is now on the verge of becoming 2nd only to Hobart for the lowest median price in the country. A severe fall from grace indeed.
A combination of factors has led to the sustained slowing down in the Darwin economy, such as the winding down of the INPEX LNG project and a shrinking of the local Territory population.
2016 was widely regarded by most property pundits as the worst year Darwin property has seen in several decades. The present market can still generally be characterised as a buyer’s market with property prices depressed in the first half of 2017 however there is certainly cause for some optimism that the worst of the correction is over with sales volumes increasing & a significant increase in buyer activity.
Contributing to the extra sales no doubt is a greater percentage of sellers understanding of the shift in prices that has occurred & pricing their property accordingly.
At Real Estate Central we’ve recorded a 37% increase in open home attendees compared to this time last year. Couple this with far more realistic & educated vendors along with record low interest rates & the rise in sales volumes is inevitable.
At last check volumes had increased by 16% from last year & we’d expect this trend to continue for the remainder of 2017.
Sales are primarily dominated by owner occupiers who represent 92% of REC’s sales in 2017.
In contrast, subdued rental growth & lack of confidence continues to deter property investors from buying and investing in the Darwin market, instead chasing larger gains in the eastern and southern states.
Investors currently making up 8% of our transactions in 2017. To put this in perspective during years of high growth that figure has been as high as 48%.
Having this figure back up above 25% is critical to sustained stability & growth in the top end market which has historically been a favourite to interstate investors chasing cashflow with Darwin holding the capital city title for highest rental yields in the country for the best part of the last decade.
I’m often asked ‘what’s the Darwin market doing’ to which I often reply ‘which sector are you referring to’. For several years we have seen a significant imbalance with supply outweighing demand, but this is now starting to equalise in some sectors of our market.
Leading the charge & showing definite signs of stabilisation is Darwin’s Northern Suburbs which are without question the strongest sector of the market.
We are back to averaging over 40 groups attending our friendly auction properties throughout a marketing campaign for our Northern Suburbs properties. This is something we haven’t seen for years & having competitive bidding/ offers is becoming normal again. It’s a bold call but our research concludes that this sector of the market has bottomed and it’s now in a recovery stage
This is flowing onto inner Darwin suburbs house sales where active buyer numbers & sales volumes have also increased, however many dwellings are still beyond the reach of purchasers with the majority only having or willing to spend up to half a million.
Areas where supply can be easily influenced through new construction such as Palmerston & inner city units have been the worst hit segment of the market with a considerable supply still applying significant downward pressure on prices. These conditions are compounded by a lack of investors entering the market. The rental market continued to soften but the promising sign was that vacancy rates appear to have stabilised. This should assist with confidence for investors who are critical to a recovery occurring anytime soon in this sector of the market.
Overall, the current property market presents a great opportunity for purchasers looking to secure a property.
We look forward to seeing what the rest of 2017 produces, but the early signs of a recovery in some sectors of the housing market are very encouraging.
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