By Herron Todd White
The Northern Territory is the safest location in the country. As at the Anzac day weekend we’d recorded 20 days without a new case of Covid-19. We’ve had only 28 confirmed cases in total, of which 23 have recovered (source: Michael Gunner, Chief Minister NT). The borders have also been locked down and travel into remote communities has been limited. These strong actions, our small population base and the adherence to the recommendations should positon the NT to respond well in our economic recovery.
How has this transitioned to the property sector?
Leading local sales agents are reporting a stable level of interest for stock which was already on the market, open homes have been replaced by private appointments, one agent noting that it has led to more qualified buyers coming through and less tyre kickers. Real Estate agents have shifted to online auctions using the Gavel app, which has resulted in a handful of sold dwellings. The private treaty sales campaigns have been successful with reigning REINT agent of the Year Derek Hart of Elders Real Estate reporting strong activity with Private Treaty campaigns (source: The NT news).
When considering the pipeline coming forward it’s been noted appraisals are significantly down and the current activity is from pre COVID-19 stock, the vendors requiring a result are still motivated towards sale, however for many the coronavirus interruption has postponed planning to later in 2020 with a more cautious “wait and see” outlook.
With this activity we have not seen any market reductions which are out of line or increased market reductions as a result of the pandemic, noting that some market sectors have been performing quite poorly due to the wider market forces.
Whilst job losses have hit much of the nation heavily, the NT is fortunately positioned with a number of factors, we have over 21,500 public servants (source: The Office of the Commissioner for Public Employment (OCPE)) all of whom are still being fully paid with an ability to support their family. A further 5500 are defence personnel (source: The dept. Treasury & Finance) this equates to over 10 per cent of the total population maintaining full employment.
In a positive for the market, long-term residential tenancies have remained relatively firm. Larger agencies have indicated requests for rent reduction remain quite low and that rental arrears have not spiked.
The short term tenancy market is very poor. Holiday makers have evaporated from the local scene, a number of short stays companies have noted disappointing forward bookings and the 2020 dry season will be a difficult period.
The NTG stimulus programs have been quite generous. Approximately $100 million has been allocated to the Home Improvement Scheme, whereby the Govt, will offer $4000 with an owner contribution of $1000 or $6000 with an owner contribution of $2000. This will help owners improve their property which may increase the value of their asset.
So with that all said, where is the NT market? We are yet to see any firm market evidence the pandemic has resulted in lower rents or capital values, the big test as we look through the forward lens is the speed at which social restrictions are lifted and the time it takes to re-open the economy. If these efforts splutter along and hit road blocks such as a second wave of infection then any confidence which is in the market will evaporate.
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