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The Territory market is continuing to record steady progress
Prices in Darwin are growing at a healthy pace with increases of 5.9 per cent recorded in the past year, according to RP Data.
The Territory has long suffered from an undersupply of available housing and land. Herron Todd White reports that this scarcity within the Darwin city limits is boosting prices across the city.
Darwin is already relatively expensive considering its small size. RP Data reports there are six suburbs with a median price over $1 million in the city. On the flipside, just 19.2 per cent of properties are valued at less than $400,000.
The most affordable suburb within 10 kilometres of the CBD is Malak – however, the median price in this suburb remains an elevated $585,478, according to RP Data. Anula, Moil, Millner and The Narrows were also identified as cheap compared to neighbouring areas.
To combat the lack of affordability, the territory government has commenced a land release program to introduce 2,000 new properties onto the market. By mid-2015, this project will be half-way completed.
Part of the territory’s funding is dedicated to improving amenities and infrastructure near new estates. In Palmerston, a $300 million shopping centre is currently in the works to support a new development in Berrimah Farms and Holtze.
In the inner city, apartment development has reached new peaks. According to Colliers, apartment sales increased by 58 per cent over the June quarter, with demand driven by investors. As a result, older apartments have taken a hit and are dropping in value. Through 2014 and 2015, Colliers estimates that 3,000 new units may be constructed.
Herron Todd White reports investors are active in the apartment sector because high tenant demand has lead to impressive rental returns. However, rents are beginning to flatten out as more investors buy into the market, Colliers warns.
Just outside of Darwin, Herron Todd White reports the rural residential sector is seeing sustained growth after a major upgrade to Tiger Brennan Drive. Moreover, although Alice Springs has been in a “period of consolidation”, the valuation firm believes houses under $500,000 should continue to grow over coming years.
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