The Northern Territory market is picking up again on the back of strong economic activity.
According to the RP Data Rismark May hedonic Home Value Index Results, the median price in Darwin increased by 9.7 per cent from May 2013 to May 2014. In addition, in the three months to May this year, Darwin was the country’s strongest performing capital, with growth of 5.5 per cent.
The city has long suffered from an under-supply of properties. These dynamics have pushed Darwin’s median price up to become the second highest in the country, according to RP Data.
In an effort to increase the availability of housing stock, the government has introduced changes to its first home owner grant. The entitlement for existing homes has been scrapped while the grant for newly built homes has increased to $26,000. Treasurer David Tollner said he hoped the grant would encourage new construction and ease pressure on existing property prices.
However, Terry Ryder from Hotspotting.com.au cautions that the Darwin inner-city may be at risk of an over-supply of apartments. He believes Darwin has always been volatile, with both the rental and sales sectors seeing huge variations. Though the market overall is performing strongly, he warns CBD apartments are growing at half that rate and the median unit price has dropped over the past three years.
Despite gains in median price, sales volumes may be dropping in the city, according to REINT CEO Quentin Kilian. In the first quarter, house sales volumes fell by 24.7 per cent while unit sales plummeted by 30.1 per cent. Mr Kilian says most stock sold was in the upper-end of the market, skewing the median.
According to REINT figures, the northern suburbs may have seen volumes drop due to limited listings activity. In Marrara, sales figures fell by 67 per cent on the previous quarter.
Elsewhere in the territory, major population centres saw a slight drop-off in activity. REINT data shows prices in Katherine decreased by 7.9 per cent and sales volumes by 17 per cent in the past three months.
In Alice Springs, meanwhile, sales dropped by 45 per cent but the median price climbed by 0.9 per cent over the quarter. According to the government, a new housing development will also be completed in Alice Springs in coming years.
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