Darwin Market Update - June 2019
What an eventful year we have already had in 2019, the vibe in the market is changing – I can feel it. I wanted to reach out and give you a short overview of the market, particularly now we are about to enter the peak selling season in Darwin.
The federal election is now thankfully over and the status quo remains in place with the Coalition retaining government. There was certainly a high level of press leading into the election – scrutinising what impact the proposed changes from the opposition would have had on the property sector, resulting in some resistance and high levels of apprehension around a change of government. The general consensus from our discussions, was a change of government could have had some far reaching consequences for the property market in Australia. Needless to say, our clients both locally and interstate seem to have welcomed the Coalition with open arms and it appears the property markets across Australia have taken somewhat of a collective sigh of relief.
In combination with this APRA has sent a letter to all banks on Tuesday June 21st stating it would be reassessing the serviceability assessments that are used to determine if borrowers can repay their loans. Since 2014 this has been at either 7% or 2% above the current mortgage rate – which ever was higher. That meant that with interest rates as low 3.75% – some borrowers were still being assessed as if the rate was at 7%. APRA has recognised that this may be unreasonable and these changes will go a long way in easing the difficulty some parties are having in obtaining finance – which we expect will further fuel activity in our property markets.
With the Reserve Bank Australia (RBA) changing the cash rate to 1.25% on the 5th June, 2019, the first reduction since mid-2016, it was positive to see NAB and CBA agree to pass on the full 0.25% cut to consumers, with Westpac passing on 0.2% and ANZ coming at the lowest at 0.18%.
These recent changes are designed to stimulate the economy and reduce unemployment – which is in line with our local government objectives of stabilising our markets, that have seen some major contracts landed in the NT (NASA and Conoco Phillips). We remain apprehensive, as the improved confidence in the property market could be “short-lived”, as we still feel that we have a 3-5 year journey before we see considerable gains in the property sector in Darwin. The positive is that we are seeing investor enquiry from the eastern seaboard improve and local investors are starting to see some value in the medium to low density residential, but has not been felt in the high density markets. We feel that considerable upside to sooth the pain some of our owners are feeling, could still have a fair way to go – so if you are looking at exiting the market in the next couple of years, we would strongly advise you that now is a good time to act.
Real Estate Central is the largest agency in the Northern Territory and has won large agency of the year in 2017 and 2018. If you elect to sell your property, there is no agent in Darwin that would be more dedicated to achieving the best possible outcome for you. Real Estate Central have been the leading agents in Darwin for the past five years, due to our exceptional work ethic and commitment to our vendors. We would be your best choice in getting the property sold in the shortest possible time frame and for the highest price.
If you would like to know what is happening with the value of your property – please contact us anytime.
Regards,
The Real Estate Central team
P:08 8943 3000
E: sales@recentral.com.au
