The bottom continues to collapse under Darwin as real estate prices fell further in the three months preceding November 2019, which makes it again considered the underperforming Australian capitals, after briefly giving up the title in Perth.
"The Darwin real estate market peaked in August 2010 and is still suffering from the effects of the end of our mining boom, with a very weak job market and a lack of migration and spending expenses. infrastructure, "said Kate Forbes, National Director of Metropole. Real estate strategists.
"The small size of Darwin's market makes it more sensitive to local events, and it generally has a higher and more variable vacancy rate, a product of a large transient labor force."
The lack of economic promise was a major factor preventing Darwin's investors. Meanwhile, with each drop in the value of homes, the market has become progressively more affordable, to the point that capital properties cost less than those in regional areas.
"With the median unit price of Darwin at $ 294,000 and the median unit price of Alice Springs at $ 327,000, buying a unit in Alice Springs now costs more than In Darwin – the first time this has happened in 19 years, "says Quentin Kilian, CEO of the Real Estate Institute of the NT, in the report on the local real estate market in the Northern Territory for September 2019.
While the median unit price in the capital has dropped over the past 12 months, the median value of buildings has increased; however, the volume of land sales declined, indicating a lack of demand.
Nevertheless, Tim Lawless, head of research at CoreLogic, believes that 2020 could be a turning point for Darwin, although the state still needs to resolve some important economic problems in order to stabilize.
“Darwin is now the capital's most affordable property market, both in gross median value and relative to household income. It is also the capital with the highest gross rental yields, ”he says.
"The combination of a low entry point and a high cash flow, with potential for capital gains in the medium and long term, may begin to attract more 39; investor interest in this market in 2020 ”.
SUBURB TO WATCH
GILLEN: High yields at Alice Springs
Rental yields are very attractive in the Alice Springs suburb of Gillen. Houses and units posted average gross returns of 6.0% and 7.8%, respectively, from year to November 2019.
These large yields are a glimmer of positivity on the weak NT market. But while rental rates have stayed at an average of $ 500 per week for homes, unit rents have dropped 3.2% to $ 380 per week. The real estate market also fled with a slight decline in values ??of only 1.1% over the year until November. In contrast, unit prices fell 6.0%.
There are many natural attractions in the vicinity of Gillen, such as the Todd River and the Alice Springs Desert Park.
Nature: Gillen is close to the Todd River and the Alice Springs Desert Park
Yield: Houses and units offer high yields of 6 to 7% in Gillen
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