The month in review: Darwin
By Herron Todd White
The residential property market in the greater Darwin region experienced a fairly difficult 2016. Nothing immediately on the horizon signals a strong 2017, however there are some early signs of recovery.
Sales volumes are starting to flow back into the market, construction levels of new apartments has eased, land supply appears to be slowing and rental and vacancy rates appear to have stabilised.
Increased sales volumes and buyer activity have been seen through the established locations of the northern suburbs and Palmerston, along with entry level inner suburban locations in the final months of 2016. With stamp duty exemptions and FHOG introduced across all property types, we would expect this to continue through the early stages of 2017.
Infrastructure projects are what have brought about the spikes in the Darwin property market.
Conocco Philips in the mid 2000s and Inpex in the early 2010s are the two most recent. Looking forward to 2017, there isn’t a new large project which is likely to kick start our market. Instead we consider that there will be a number of smaller projects from the new Territory Government, the Commonwealth Government and from private enterprise that will simmer the market along. Defence projects in Darwin and Tindal, Palmerston Hospital, large retail centres and the Darwin Port with Landbridge will be some of the drivers in the local economy that will flow through to the residential space. Jobs and employment always encourage residential investment in the Top End.
We think that Karama and Malak are shaping as two hotspots for 2017. Entry level housing in these two northern suburbs is back under $400,000. We think that this is an excellent option for first home owners or upgraders coming out of a unit. While the property will require some work, it is an affordable alternative to a brand new home in competing suburbs, and whilst we as a society have turned to the brand new, shiny and hottest new thing there is something to be admired about starting with a smaller family project and slowly building from there.
The Darwin CBD always attracts a huge amount of attention in the property media, however 2017 looks as though it will be a quiet year, certainly by comparison to the past decade. As at early February 2017 there are a limited number of cranes in the CBD, with a very small number of projects in the construction pipeline. This will continue to stabilise the rental market by not dumping further supply into a relatively soft market. For the first time in a few years it will give the CBD an opportunity to have a breather and consolidate.
Unfortunately there are no crystal balls sitting on our shelf, however we think that 2017 will be a settling year in the residential market with a smaller number of projects and lacking any great drivers for growth. With interest rates at record lows it appears a good opportunity to tidy up an existing portfolio or enter the market for the first time.
Find out more information and to chat with a local Mortgage Broker in Darwin.