Darwin

The Smartline Report – July Edition

The month in review: Darwin

By Herron Todd White
July 2015

A lazy half million……..Where to invest $500,000 in the Darwin region?

$500,000 would not get you much in the immediate Darwin region over the past couple of years. However, more recently the adjustment to the First Home Buyers Grant (effective 31 December 2014) has brought on a buyer’s market situation with some noticeable bargains being found.

First home buyers looking for some land to call their own, larger than the affordable approximately 300 square metre to 400 square metre blocks in the new subdivisions can find good buys around the older suburbs of Palmerston and the northern suburbs of Darwin.

For the savvy first home buyer this also allows for the possibility of renovations and extensions. But the catch is, in purchasing an established property you will now forfeit the First Home Buyers Grant. For those seeking to make full use of their grant there is a possibility to purchase units off the plan however with a ceiling of $500,000 the potential stock will most likely be limited to 2-bedroom units.

Conversely, for the investor seeking an affordable property or a renovation project, it is a good time to buy. The increase in rental vacancies and properties on the market for increased periods of time have led to this buyer’s market situation with some good purchasing being achieved at the lower end of the market.

For those seeking the straight forward investment and good returns Darwin has previously offered, the prospects have begun to taper off in the below $500,00 segment. With many landlords unable to secure tenants there has been a noticeable decrease in rental returns. For example, for a standard 3-bedroom dwelling in Palmerston, the REINT March 2015 quarter reports a decrease of 4.8% year on year from the previous year to a median rental income of $500 per week.

The Northern Territory’s property market has been a stand out market in Australia over the past decade, averaging 7.4% annual growth for dwellings, year on year (RP Data/ Core Logic). However more recently we have noticed the effects that decreased market confidence and the First Home Buyers Grant being pulled from established dwellings has had on the market. Despite this with the Northern Territory’s close proximity to Asia and the opportunities associated with mining and gas projects it can still be a good investment option.

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 – 2015. Australian Credit Licence Number 385325

 

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