The Smartline Report – August Edition

The month in review: Darwin

By Herron Todd White
August 2015

When discussing current construction costs in the Top End, we look to our two key areas of development, Muirhead and the nearby satellite city of Palmerston. Specifically in Palmerston we have seen a substantial amount of land releases in the suburbs of Bellamack, Johnston, Zuccoli and Durack. With these suburbs providing over 3,000 new residential lots since 2009, vacant land has become steadily more available, subsequently fuelling construction. In addition, in an attempt to boost construction, the Northern Territory Government has significantly modified the First Home Buyers Grant. The $26,000 grant can now only be used for brand new or off the plan purchased units or dwellings.

In Darwin itself, Lyons has been built out, with the bulk of residential construction occurring in the new suburb of Muirhead, located in the northern suburbs, 16 kilometres from the CBD. The subdivision’s development commenced in April 2011. 30% of the development consists of homogenous DHA built properties, with strict design covenants in place and enforced. These covenants can inflate construction prices somewhat, however due to the generic standard type of dwelling required builders can lower costs through economies of scale.

In May 2009 construction costs for the Palmerston region (the only large scale development in the Territory at the time) were reported to have steadied at around $ 1,900 per square metre for a typical ground level dwelling. Since then, costs have remained relatively similar with a construction cost in Palmerston for a standard 4-bedroom, 2-bathroom rendered masonry ground level dwelling at around the $1,800 to $2,200 per square metre mark. At this level the properties would be built with a modern fit-out generally including stone benchtops, tiled flooring, stainless steel appliances and split system air conditioning. We have seen evidence of this all throughout Zuccoli, Durack Heights, Bellamack and Johnston. With more development occurring, smaller properties have become more popular compared to five years ago. The rate per square metre may be higher however it is still a cheaper build cost overall. Entry level house and land packages in Palmerston start at $500,000.

Moving closer to the CBD, the Muirhead development comprises rendered masonry properties all built to a fairly high standard. Like Palmerston, the standard construction cost for a typical 4-bedroom dwelling ranges from about $1,800 to $2,200 per square metre. These builds are all of a good quality including stone to the wet areas, stainless steel appliances, split system air-conditioning and ceiling fans throughout. This is directly comparable to 2009 prices. Entry level house and land packages in Muirhead start at $600,000. Elevated dwellings seen in other parts of the northern suburbs generally have a build cost of $2,500 to $2,700 per square metre. These types of properties are considered in the upper range of the housing market.

Like other cities, Darwin has its fair share of prestige properties. With a variety of waterfront areas, we have seen prime locations such as the Fannie Bay foreshore, Nightcliff foreshore and marina areas of Larrakeyah and Bayview attracting very wealthy occupants and investors. Depending on the dwelling size, these prestige construction rates can range from $3,000 to over $5,000 per square metre. Other key factors include the type of build, size and level of amenity. Features can include private lifts, marina berths, basement garage and very high end appliances.

The Darwin building industry overall will likely remain fairly steady for the next 12 months, keeping construction rates at a stable level. There is still further land to develop, with Muirhead and Zuccoli Stage 2 still releasing land. Darwin’s economic landscape is considered cyclical in nature, ie. very much driven by employment opportunities. This is evident during the current construction phase of the Inpex gas project, driving construction costs up during this period. We may see significant change in two years when the project winds down to the maintenance phase and increased trades are available.


Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325


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