Darwin

The Smartline Report – July Edition

The month in review: Darwin

By Herron Todd White
July 2016

Depending on whether you view the glass as half full or half empty is how you will summarise the current Darwin property market. For those eternal optimists, the current dwelling market in the northern suburbs presents a great opportunity for purchasers looking to secure property around the $500,000 mark. Although the median housing price is down 4.8% year on year, the quarterly change up to the March quarter has increased 1.4% (source: REINT, RELM March quarterly figures). This marginal increase reflects a slight shift in consumer confidence in this segment of the market as you can now purchase a well renovated, 3-bedroom, 1-bathroom elevated dwelling in the outer northern suburbs of Malak or Karama starting at the lower end of $500,000 and pushing to the mid to upper end of $500,000 depending on the finishings and overall amenity of the property.

By comparison, for the same money you can purchase a dated, 3-bedroom, 1-bathroom dwelling in the superior suburbs of Millner, Jingili and Leanyer that are selling from $500,000 to mid $500,000s. Or you can purchase property in these same suburbs that have higher quality finishings for the upper $500,000 mark. A much needed injection for this segment of the market is the recent grant announcement for all home owners to carry out general maintenance on their property. If home owners engage with a registered tradesman to carry out the work, the government will provide a subsidy of up to $2,000 on the proviso that the cost is of equal or greater value to the grant amount.

To the other side of the Darwin property market and for those who view the glass as half empty, the inner city and fringe CBD unit market continues to show a decline, with recent figures showing a 52.4% decrease in total sales volume up to the March quarter of 2016 and a decrease of 3.5% in the median unit price year on year (RELM March Quarter). We are now witnessing a large number of vendors holding on to their properties and only listing if they have to. This has resulted in some really good purchases. We know of a recent dated 2-bedroom 2-bathroom unit in the fringe suburb of Larrakeyah selling for the low $300,000 mark. Comparatively the unit next door sold for $460,000 at the end of 2014, putting things into perspective as to how far this market has come back.

However, there is a silver lining to what has been a declining unit market over the past 12 months with the NT Government announcing that it will re-introduce stamp duty concessions for existing properties, effective 24 May 2016. What this means for purchasers is that they will now receive a 50% discount on the stamp duty payable for properties valued up to $450,000. For properties that are purchased above this price point they will receive a $10,000 subsidy on their stamp duty payment. Although we are aware of a recent duplex going under contract in the fringe CBD suburb of Stuart Park under this concession, we are yet to see enough evidence to support that this change to stamp duty concessions has had any real impact on the Darwin CBD market. We predict that this will be the case until both the Territory and Federal elections are held later this year and consumers are given more certainty about the property market.

www.smartline.com.au

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 – 2016. Australian Credit Licence Number 385325

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