By Herron Todd White
From what seemed like a fantasy some months ago, COVID-19 is now the new normal and providing an update on this is now commonplace. The Territory continues to be one of the safest places, a comment regularly made by the Chief Minister, Michael Gunner.
With close to a month since our last reported new infection, case, over a week since our last active case and still no community transmission (source: https://covidlive.com.au/), the Territory continues to prove that from a COVID-19 standpoint, we are the safest place in the country.
On 17 July, the Northern Territory opened its borders, with limitations that can change regularly to notable COVID-19 hotspot areas. There is currently restrictions on any travellers from Victoria or Sydney areas. Following last month’s comments, the easing of the borders brought a much needed boost to our struggling tourism, retail and food sectors.
Traditionally, a spring market for the Northern Territory is one that would not be as typical or as noticeable as the eastern and southern states. Peak seasons, particularly in Darwin, are in the winter months with transactions occurring steadily throughout the year.
Activity this year in the market has been steady with the June 2020 quarter showing green shoots from a three year downturn in the property sector for the Northern Territory. The Darwin north coastal region, which features the popular suburbs of Nightcliff and Rapid Creek, recorded 73 dwelling sales for the quarter. This is up 26 per cent on the quarter and 12.3 per cent on the year (source: REINT Magazine, June 2020.)
21 Aralia Street, Nightcliff, positioned only a few streets back from the picturesque Nightcliff foreshore, sold prior to auction for the price of $700,000 after less than six weeks on the market and is an example of a well-kept two-storey home (source: https://www.realestate.com.au/sold/ property-house-nt-nightcliff-133191674). Agents are reporting that properties of this nature for example are well sought after, particularly more than ground level homes. These homes, as well as classic elevated homes, are popular in Darwin and continue to be a focus for local buyers.
While we are not yet seeing dramatic rises across the market at this stage, typically speaking the first signs of a recovery are the rise in transaction numbers. COVID-19 appears to have had little effect on the Darwin market and the days on market are dropping dramatically. Using the Darwin north coastal region, dwelling values in the quarter for this area have risen 11.7 per cent for the quarter (source: REINT Magazine, June 2020). Agents report that listing numbers are also down. While it is difficult to forecast during the pandemic, the next quarter results will prove interesting to see whether this quarter was just a one off. They are also reporting that while listing numbers are down, buyer enquiry remains steady with some urgency now creeping back into buyers’ minds.
Another factor attributing to the increase in sales is due to the relatively transient nature of the Darwin population. Now that the pandemic dust has settled and the initial shock factor has passed, when people may have looked to move on from Darwin or travel, they now are settling and purchasing homes and agents are reporting a large percentage of local buyers.
Pricing is still key with values remaining static across most sectors. We are yet to see any significant rise in values in conjunction with the lower days on market.
Unit sales continue to struggle with both volumes and values remaining stagnant. The inner Darwin unit market, where a large percentage of units exist, shows a reduction in values over the quarter of 7.9 per cent and no change year on year. While we saw a slight increase in sales volumes of 6.9 per cent for the quarter, the annual sales numbers dropped 14.4 per cent year on year with 85 per cent of those sales occurring in the price bracket under $600,000.
Forecasting in the short to medium term for the Darwin market, much like the rest of the country, will continue to prove difficult as we navigate the pandemic, however, using the past three months as a guide gives us some optimism that for the remainder of 2020, bar any major outbreak, major policy or government reform, the market will continue to operate much the same with some renewed buyer confidence and with any luck, some signs of capital growth on the horizon.
Speak with a Darwin Mortgage Broker today.