The month in review: Darwin
By Herron Todd White
The recent change of government with Labor taking hold of the reigns in the August election have improved conditions for people trying to enter and exit the property market. The past two years has seen Darwin’s property market continually slow with decreasing prices and lower sales volumes across the board. First home buyers were only offered incentives for brand new properties in those two years and established properties subsequently received limited interest.
Since 1 September the market has sprung to life again as the new first home owner incentives for existing properties came into play. First home buyers are now eligible for up to $24,000 in stamp duty concessions, with the first $500,000 of the purchase being stamp duty free and the incentive being capped at $650,000.
As many of the properties now being targeted by first home buyers will be relatively old, a further incentive of $10,000 to be utilised for renovations including up to $2,000 on household goods will further encourage people to buy existing properties. The incentive of $26,000 for building or buying a new property remains in place.
The new concessions have only been effective for three weeks and agents are reporting increased activity with numerous contracts executed in the short existence of the initiative. Many prospective purchasers were waiting to see the election results before making any serious offers and have been quick to take advantage of the new benefits, some fearing it might push prices back up, particularly at the entry level.
As the incentive is capped at $650,000, all established properties on the market under that range are expected to attract more interest. The northern suburbs in particular will be a popular area for young buyers and all the older Palmerston suburbs should benefit also. The biggest loser from the scheme may be the already suffering new estates, as new home buyers will now shift away from building and focus on the established market. In particular Zuccoli and Muirhead are the two estates with the most land left to release and project builders may have to bring their build contract prices down to compete with existing stock.
The increased activity in the market will help move properties quicker and the flow on effect will help people buy up an asset class from their existing property. There are still many negative economic factors surrounding Darwin and as the population continues to fall the basic supply and demand principles would suggest that prices won’t be drastically spiked by these new incentives. The greatest benefits will be more sale transactions, shorter marketing periods and more opportunities for people to enter the property market.