By Herron Todd White
As 2019 draws to a close, we have the opportunity to reflect on the year that was in the Darwin residential property market. Our February Month in Review charted a likely course and it will come as no surprise that our expectations earlier in the year for a subdued 2019 have transpired.
In reference to the state of the economy, we commented that “…the residential property market is unlikely to show much growth under these conditions and critically, sentiment will likely remain weak across many aspects of the economy”.
The most recent stats to come out of the Real Estate Institute of the Northern Territory (REINT) show that as of September 2019, total sales volumes declined by some $9 million since the same period in 2018, a reduction of over eight percent. This was mirrored by the reduction in median price from $497,500 in 2018 down 7.5 percent to $460,000 in 2019.
Interestingly the unit market actually showed an increase in total sales volume, up $2.7 million, however, this is largely due to the increase in sales volume up 37 sales to 153 from September 2018 to September 2019. However, the contraction in median price from $352,500 to $294,000 in 2019 reflects the continuing weak segment plagued with oversupply issues and distressed sales.
One of the key drivers in the market throughout 2019 has been the house and land construction in the new estates of Darwin and Palmerston. The NT Government released a suite of concessions and bonuses for eligible applicants across an array of categories which include new construction, first homeowners and existing Territory homeowners. Anecdotally the more popular of these has been the Build Bonus Grant which is a grant of $20,000 for new constructions. Under a first homeowner qualification, the total maximum benefit available is $50,601 which includes a stamp duty concession and household goods grant. The impact on the market has seen new constructions and land sales dominate activity in these areas, taking demand away from older and more established suburbs. This is seeing these established areas presenting real value for money – an opportunity we see emerging in the market going forward.
In line with our comments in February, the market remains a buyer’s market. Despite the contraction in median value across some asset types, the market remains fluid with agents reporting good demand for reasonably priced good quality property. We would expect that this trend and sentiment will continue throughout the balance of 2019.
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