Darwin July 2017

The month in review: Darwin

By Herron Todd White
July 2017

Buying property in Darwin hasn’t been this affordable in a very long time. The present market can be characterised as a buyer’s market with property prices and sales volume depressed in the first quarter of 2017. Sales are primarily dominated by first home buyers on the back of government incentives and record low interest rates. In contrast, subdued rental growth continues to deter property investors from buying and investing in the local market, instead chasing larger gains in the eastern and southern states. The latest quarterly report from REINT for the greater Darwin area (including Palmerston) indicates that the median price has reduced by 9% year on year to $530,000 and 14% to $430,000 for detached dwellings and units respectively.

Existing units in the Darwin CBD and inner Darwin suburbs of Stuart Park, Larrakeyah, Parap and Woolner offer good value with 3-bedroom, 2-bathroom apartments selling in the range of $360,000 to $500,000 and $300,000 to $450,000 for 2-bedroom, 2-bathroom apartments. The majority of this stock is 15 years old and offers a modest standard of accommodation. Furthermore, entry level units which are mainly comprised of 2-bedrooms and 1-bathroom can be found in the northern suburbs of Nightcliff, Coconut Grove, Millner and Rapid Creek. These units are selling in the price range of $200,000 to $350,000 and offer entry level accommodation. Apart from the inner city and northern suburbs, units in Palmerston also offer an affordable option for those looking for a bargain with current selling prices ranging from $220,000 to $300,000 for a 2-bedroom, 1-bathroom unit and $300,000 to $350,000 for a 3-bedroom, 2-bathroom unit.

On the other side, dwellings in the inner Darwin suburbs are far beyond the reach of purchasers with only half a million to spend, with the latest REINT March quarter 2017 report indicating a median price of $667,500. However, the northern suburbs which are areas between Nightcliff and Karama have a lower median price of $580,000 and $520,000 respectively.

Older dwellings in the less popular suburbs of Malak and Karama offer affordable entry level home ownership with a ground level 3-bedroom, 1-bathroom dwelling selling in the range of $350,000 to $400,000. These dwellings have a fairly basic level of improvement and require some degree of renovation. Other more popular suburbs such as Leanyer, Wulagi, Anula and Jingili also provide a host of options but sell at a slightly higher price range from $400,000 to $500,000. Further away to Palmerston, Gunn, Rosebery and Durack are some of the suburbs that most buyers would get houses with good value for money, particularly dwellings in the price range of $400,000 to $500,000 with 3-bedrooms and 2-bathrooms. In terms of purchasing your own block of land and building a new dwelling, the newly developing suburb of Zuccoli offers affordable land options with prices as low as $100,000 or house and land packages from builders as low as $450,000.

We expect property prices to remain depressed for the remainder of 2017, with minimal evidence of stabilisation in the form of increased transactions. A combination of factors has led to the sustained slowing down in the Darwin economy, such as the winding down of the INPEX LNG project and a shrinking of the local Territory population. The inner city unit market has been one of the worst hit segments, with a considerable supply still applying significant downward pressure on prices. These conditions are compounded by a lack of investors entering the market, with subdued rental conditions likely to continue in the short to medium term. Overall, the current property market presents a great opportunity for purchasers looking to secure a property.

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