Darwin the only housing market currently in upswing, but Brisbane and Perth recovering: HTW

Darwin is the only capital city residential property market already into its upswing, according to property valuers at Herron Todd White.

The nationwide valuation firm says Darwin is already in the upward phase of its property cycle due to a “severe shortage of available property relative to demand”, a tightening rental vacancy rate and strong demand for new houses.

Furthermore the volume of house sales is increasing as new housing is built to meet demand.

Hotspotting.com.au’s Terry Ryder picks Darwin as the standout property market for property investors due to its “compelling statistics on vacancies, rents and prices”

“The Northern Territory is evolving into a gas hub of international significance… at the same time, the territory government has sought companies to build and operate a marine supply base in Darwin,” says Ryder.

In its September building industry outlook report BIS Shrapnel forecast a solid improvement in residential building activity in the NT, with a 39% jump in building commencements forecast for 2012-13.

“The strength of the local economy will see migration pick up again, with work on the Ichthys gas project expected to ramp up in 2012-13 and beyond," says BIS Shrapnel.

“Hence despite an improvement in residential building the dwelling stock deficiency is expected to persist over the forecast period.”

Herron Todd White is also bullish about the Perth and Brisbane house and unit markets, with Sydney and Melbourne considered to have bottomed out.

Perth edges Brisbane in terms of the factors required for a recovery in property prices with a tightening rental market due to a shortage of available property relative to demand and a declining trend in the construction of new houses and units.

State of the property cycle for houses

Source: HTW

 HTW assesses the Brisbane rental market as being balanced with a steady vacancy trend, “soft” demand for new houses and units and a steady volume of sales.

Both Sydney houses and units are at the bottom of the property cycle, according to HTW.

State of the property cycle for units

Source: HTW

The Sydney detached house market appears to have moved quickly through the property cycle, with HTW assessing this market to be at its peak at the same time last year.

In comparison, the Sydney unit market was assessed as declining in the August 2011 monthly review and has taken a year to bottom out.

All the factors favour a recovery for the Sydney property market, with a balanced rental market for houses and a shortage of units to rent, says HTW.

In addition demand for houses and units is “fair”, with the trend in new construction and volume of home sales “steady”.

HTW assesses Melbourne houses to be at the bottom of the market or just beginning their recovery, with steady rental vacancy rate favouring landlords and steady demand for new houses and existing houses.

Despite the Melbourne unit market bottoming out, HTW says the unit market is drifting towards oversupply with soft demand for new units due at the same time as supply increases.

HTW assesses Hobart, Canberra and Adelaide’s property markets to be in a downswing.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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