We do not expect a massive turnaround for the Top End, as the market weakens under a weak economy
Darwin investors may be hoping for a change in the market outlook, but this is not the case in the next few years as BIS Oxford Economics expects minimal growth.
"Without a marked recovery in the economy or the balance of demand, moderate home price growth is expected and unit prices of 7% and 8%, respectively. , until June 2022, mainly towards the end of this period, while the offer begins to tighten. Said Associate Director Angie Zigomanis in the report titled Perspectives on Residential Property of the Society for 2019 to 2022.
The lack of job opportunities and job security in Darwin has dampened demand and population growth. Strict restrictions on obtaining credit also make it difficult for buyers to acquire established properties because there is little confidence in this wood neck.
In addition, Darwin's market is becoming oversupplied, with vacancy rates falling. According to CoreLogic data, over the entire period 2018/2019, total returns from residential properties have also declined across the state. Rents fell 4% in the 12 months to July 2019 and very few high-end properties were sold.
However, the steady free fall in property values ​​has resulted in increasing affordability, with more units sold in particular at under $ 400,000. During the same period, 67.4% of the units sold in Darwin involved dwellings at this price; this percentage is up from 61.2% in 2017-2018. In regional pockets, 77.1% of units sold were less than $ 400,000, while 39% of homes were sold at this price.
Thus, even if the opinion of professionals regarding Darwin remains calm, investors expect a positive advantage. On the one hand, the market is expected to experience some growth in rents over the next 12 months, with Darwin remaining the capital with the highest average return among its peers.
"While real estate professionals report that trust is somewhat lacking in the NT, there are areas of encouraging positivity and activity within market segments," says Libby Greenwood. General Manager of Retail Sales at NAB SA and NT.
"Homeowners have become more active in the new housing market in NT, while the first homebuyers are the dominant players. For established properties, they are the most active renovators. "
BANK PROJECTOR
EAST SIDE: A Growing Market Rare
One of the few suburbs of the Northern Territory to register steady and positive growth, East Side is definitely a market to watch.
Home values ​​rose 10.3% from January to July 2019, following a double-digit growth trend since 2014. As a result, the median price was slightly over $ 500,000. This type of property also offers relatively high yields, with an average of 5.5%.
On the other hand, unit prices fell 4.5% over the same period, bringing the median value down to less than $ 300,000. Nevertheless, yields were also high at 5.7%. In both markets, rental rates increased by about 4%.
Growth: The East Side is one of the few suburbs to register positive growth in the NT.
Rent: Rental rates have increased from about 4% during the past year until May 2019
Top suburbs:
Kawana
,
North Epping
,
alexandria
,
Penrith
,
trott park
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