Regional NT August 2017

The month in review: Regional NT

By Herron Todd White
August 2017

Alice Springs

During the market correction experienced in Alice Springs post 2014, investor activity was noticeably reduced and has not yet recovered to previous levels. Some savvy investors remain however and are keen to jump on good opportunities. The Real Housing for Growth head leased properties were the most popular while they were available as they offered strong ten year leases plus options and were only available on new properties which offered the added depreciation benefits. These opportunities aren’t currently on offer for new properties although some pop up from time to time for resale.

The stronger end of the investor market has traditionally been the sub $500,000 category which is still generally the most sought after.

Units at this level now offer gross yields of in excess of 6.5% for units, particularly older units however the returns can be reduced by high strata levies in certain areas. Houses sold for investment are less frequent, however typically offer a lower gross yield of closer to 6%.

Local investors are typically well educated in the market corrections that have occurred in recent years and will be seeking strong yields in return for lower capital gains. With early signs now evident that there has been some stabilisation in the market we should see more activity. There are still some entry level units selling for significantly less than a few years ago and entry level houses that require some TLC and upgrades that will see investors find some good returns going forward.

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