The Northern Territory market is subdued, despite positive economic signs
Figures from RP Data show Darwin prices have increased by over six per cent in the past 12 months.
The highest growth for houses occurred in the northern suburb of Muirhead, according to Residex. The median price in this suburb rose by 7.94 per cent over the year. Bayview, meanwhile, came top for units, with prices rising 9.87 per cent.
The Northern Territory government is seeking to address a shortage of housing, which has kept prices and rents inflated. Darwin’s current median price is $535,000, well above much larger cities like Brisbane, Adelaide and Perth, RP Data reports.
New housing estates in Palmerston are aimed at expanding the range of available accommodation and encouraging buyers to look beyond the Darwin city limits. In addition, a new land release has been planned for Katherine over coming years.
The inner city is also experiencing a surge in construction, particularly in the unit sector, Raine&Horne reports. Between 200 and 300 new apartments are in the pipeline in the CBD. Yet Raine&Horne estimates only 250 to 300 properties are sold in the whole of Darwin and surrounds each month, meaning such a large volume of new stock may flood the market.
Currently, the Northern Territory is in a strong economic position, with natural gas projects propping up employment. In fact, the Northern Territory had the country’s lowest unemployment rate in May, according to the Australian Bureau of Statistics. Only 3.3 per cent of the working population were out of a job, compared to 5.9 per cent nationwide.
However, BIS Shrapnel warns the economy is likely to weaken over coming years, causing price growth in the property sector to slow. Between 2011 and 2013, Darwin experienced a mini-boom, during which prices shot up by 18 per cent. These high prices are now beginning to strain affordability and demand is dropping off in the sales sector. Through to 2017, BIS Shrapnel predicts prices may increase by only three per cent.
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