Darwin September 2017

The month in review: Darwin

By Herron Todd White
September 2017

Home ownership has become more of a reality in Darwin over the past two years. With the market continuing to soften, home owners now have an abundance of choice in regard to what they can purchase. Currently home owners are most active in the developing estate of Zuccoli in Palmerston and the newly released Northcrest development in Berrimah. Home owners have also started to become active in the northern suburbs and Palmerston dwelling markets. However, semi-detached and attached units still seem to be struggling across all sectors of the market.

Vacant land continues to be a staple for home owners. As developers continue to release land in both Zuccoli and the Northcrest development which is now starting to come online, home owners continue to gravitate towards this segment of the market. Although established dwellings have decreased in value, the option of new builds remains attractive to home owners, in particular first home owners. This is primarily due to attractive government incentives to purchase new land that is becoming cheaper and builders’ margins decreasing (we have seen rates as low as $1,700 per square metre in comparison to $2,000 and above in the peak periods of the market).

Within the established market, home owners are active in the northern suburbs in particular. Suburbs in this area such as Leanyer, Anula, Wagaman and Karama have had a number of sales transact since the start of 2017 and this has primarily been to home owners. These suburbs seem to be attractive as they are affordable and allow consumers to purchase a structurally sound dwelling on a decent size block all within close proximity of the Darwin CBD. We have seen sales as low as $360,000 for a basic 3-bedroom, 1-bathroom, ex-government dwelling in the less preferred suburb of Karama and basic 3-bedroom, 1-bathroom dwellings sell for $460,000 in the more preferred section of Leanyer.

Other areas also active within the established dwelling market in Palmerston are Gunn, Rosebery and Durack. Home owners have taken advantage of the declining value levels and we have seen sales as low as $410,000 in Durack for a 3-bedroom, 2-bathroom dwelling. Gunn has also produced some good buying with a basic 3-bedroom, 2-bathroom dwelling selling for $370,000.

The unit market continues to struggle as the Darwin CBD is completely saturated with stock. Potential purchasers are faced with the decision of why buy today when I can buy tomorrow for cheaper. Inner city semi-detached units are tightly held and when they come onto the market seem to be received well. However, the Palmerston market has continued to struggle as semi-detached units now compete price wise with dwellings in the less preferred sections of Gray, Moulden and Woodroffe.

As value levels continue to decline across all sectors of the market, home ownership can be achievable in Darwin. Add in the RBA’s recent decision to keep the cash rate on hold and attractive government incentives for purchasing existing stock or building a new dwelling and the market is ripe for potential home owners, particularly first time purchasers. However, the greatest obstacle the NT property market currently faces is the declining population growth. As more people decide to move interstate this will continue to have a ripple effect on the property market as buyers do not consider Darwin to be a long term place of residence. Until we achieve stronger population growth we will not see a dramatic increase in the level of home occupancy throughout Darwin.