The month in review: Darwin
By Herron Todd White
The market for vacant land sales in the northern suburbs of Darwin and Palmerston has continued to perform strongly over the past two years. As at March 2015 there are currently six green field developments selling vacant land, including:
• Muirhead (Darwin’s northern suburbs)
• Durack Heights (Palmerston)
• Johnston (Palmerston)
• Zuccoli (Palmerston)
• Bellamack (Palmerston)
• Coolalinga (Rural residential)
On a macro level the above mentioned green field developments have performed strongly and have been well received in the market. This growth is primarily driven by a lack of affordable housing in the greater Darwin area with the Territory Government unlocking large parcels of Crown land and re-zoning the land for residential purposes. However, recent subsidy shifts by the Territory Government no longer offering grants to first home buyers purchasing existing dwellings has pushed this segment of the market to purchase off the plan dwellings and has further enhanced the absorption rate of vacant land. This growth in the vacant land market is further supported by the INPEX Ichtys project and a number of employees residing in the Palmerston area due to the ease of access to the Ichtys site and the high rental rates in both Palmerston and Darwin.
Each estate is at varying levels of development. Some estates such as Johnston and Bellamack located in the Palmerston area are nearing completion with all vacant lots sold. Originally the Johnston development offered large lots ranging from 700 square metres to 1,000 square metres plus with the price point centering on $300,000. However, as the development progressed, the lot sizes decreased to 600 square metres to 800 square metres to meet a new segment of the market, such as first home buyers and purchasers utilising the affordability scheme. Prices for vacant land now range from $275,000 to $330,000. The Johnston development also released a number of multiple dwelling and medium density sites that have since been developed into townhouses and four storey unit blocks.
The neighbouring estate of Zuccoli has followed in a similar fashion to Johnston and has released large lots to market at the start of development. Stage 1 has been developed by Urbex who also developed separate stages of the Johnston development. Stage 1 centred on lots between 600 square metres to 1,100 square metres with prices starting at $230,000 and moving upward of $360,000 and were well received in the market. As the development has progressed into stage 2, Brierty has taken over the tender and the price point has shifted as the lot sizes have decreased. Lots of 600 square metres and under are now being offered to the market with prices ranging from $200,000 to $260,000.
The other major land release in the Palmerston area is Durack Heights, now in stage 9b of 12 land releases. The estate is considered to be the superior land release in the Palmerston market and has targeted middle income earners who are on their second or third mortgages and empty nesters who have capitalised on the strong growth of the market in the rural residential area and are wanting to down size. Land in this development centres on $250,000 with land area varying between 250 square metres and 600 square metres, however premium blocks can fetch upwards of $330,000 with land area that exceeds 700 square metres. The Durack Heights development is considered to be superior due to its location near arterial access roads, some sites offering Darwin city views and the strict building covenants in place on the development.
Further south of Palmerston the major land development is in the rural residential community of Coolalinga. The development offers relatively homogenous lot sizes between 800 and 900 square metre lots that range in value between $310,000 and $380,000. They are zoned as multiple dwelling sites and are primarily of duplex construction. The single residential stock range from $210,000 to $300,000 per lot and both the multiple and single development sites have been well received in the market. The developers, Gwelo, have also bought a number of medium density stock to the market and have developed unit blocks on these sites and are currently in the process of developing a commercial precinct.
Looking more closely at the Darwin market, the only development currently offering vacant land is in Muirhead which is located in Darwin’s northern suburbs. Smaller lots in the development centre on 450 square metres and are at the $290,000 price point with larger lots starting at 729 square metres and $360,000 with a small number of larger lots starting at 4,000 square metres and prices starting at $600,000. The development is in close proximity to the Royal Darwin Hospital and Charles Darwin University with strict building covenants and has appealed to the middle to high income earner and second and third time purchasers.
Although these developments have all performed strongly there is still a demand for vacant land in the Darwin and Palmerston areas due to the increasing costs of living in the Territory and the incentive for consumers to commit to new builds. This has created more land release in the Darwin area as the Territory Government is currently in the process of re-zoning Berrimah farm for future development and will bring a large number of vacant lots to market.