By Herron Todd White
To echo a similar sentiment to last month’s Month in Review, the Northern Territory is the safest place in the country. Our Chief Minister, Michael Gunner, is quotes as saying that the Northern Territory is now “the envy of the country” and for good reason
Firstly, only two new COVID-19 cases this month, both of whom were diagnosed while overseas and then returned home to Darwin, taking our total to 30. Apart from the two recent cases who should both make a full recovery very soon, we still have no community transmission anywhere across the Northern Territory (source: Natasha Fyles, Health Minister, Northern Territory Government), a statistic championed to and throughout our community.
On the back of this, the Northern Territory government has implemented its ground-breaking road map to the new normal (source: Secure NT) that was released on 30 April. This road map allows a slow but safe return to some normalcy across the Territory not only from a health and safety but an economic point of view.
Stage 2 was the most recent change on 15 May which saw pubs, clubs, gyms, some indoor gatherings, museums, open homes and inspections and other businesses of the like re-open, with an expected 1,500 people returning to work immediately (source: NT News). This was a welcome relief, not only as people enjoy the social interaction (from a safe distance) but also in getting the economic wheels to start turning.
As we start to see the easing of restrictions, how will this factor into the property market? In short, we are seeing a reduction in sales volumes, combined with a reduction in listings. The March 2020 quarter saw volumes fall by 27 per cent (source: REINT magazine), however as this data is captured pre-COVID-19, the June quarter will show a clearer picture as to the full effects of the virus and its impact.
Commentary in the market is echoing last month’s view of a wait and see approach as we wade through the pandemic. With the return of open homes part of the easing of restrictions, hope remains that we may see an increase in transactions in the market.
One positive that has come from the virus is the rise in renovations and the associated wider reaching benefits of this. A major factor in the Northern Territory has been the release of the Home Improvement Scheme. This scheme saw an initial $30 million of funding allocated to home and also business improvements where the government will give a voucher worth $4,000 if owners contribute at least $1,000 of their own money, or a voucher worth $6,000 if they contribute at least $2,000 of their own money with the idea being to get screwdriver ready projects out the door. The scope of possible works that could be done is quite varied and only needs to be completed by someone who is a licenced trade, not related to the recipient of the grant (source: business recovery.nt.gov.au).
The uptake on this was enormous. Funding was pushed out to $100 million by the Northern Territory government with the idea of getting 20,000 applications and work to be undertaken over the next six to nine months, a great incentive for not only home improvements but a kick starter for trades and services.
Another great positive in this scheme is that investors can also benefit, the government making it clear from the onset that investors who own a home and are a resident in the Northern Territory could also benefit.
Speaking with local agents, renovated homes continue to draw good enquiry and with the easing of open home restrictions, this will only improve. Uptake of the scheme has also been varied, with homes in all areas and wide ranging price brackets taking up the opportunity to renovate and improve.
Speaking locally, the preferred established locations are our northern suburbs. Being in a tropical climate with proximity to the beach, preferences lean towards larger outdoor living areas or the added benefit of a pool.23 Yanyula Drive, Anula is an example of a typical three-bedroom, one-bathroom home found in these
With the added benefit of a pool and larger entertaining area, this renovated home sold for $585,000.Compare this with properties without the pool or entertaining area that are currently for sale for anywhere up to $100,000 less in some locations.
There are however some minor drawbacks of the scheme. Any property owned in a trust or company name cannot apply and if a property is owned in joint names, one grant will be applied to both owners. Some works are excluded such as solar panels and works on a do-it-yourself basis. While these may frustrate some owners, we see great overall benefits for this scheme, not just for economic restart but the revitalisation of property in the Northern Territory as a whole.
Where to from here? As said in previous reviews, the matter of COVID-19 is still very much in the wait-and-see position. The Northern Territory has been tremendous in flattening the curve and we are now beginning to see the easing of restrictions as a result of the swift action taken. What does that mean for the property market? If we can continue on the current trajectory, with social distancing and also avoiding the second wave, we may see confidence return much sooner than expected with local sentiment already beginning to turn.
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