Weakening trend continues across Darwin: HTW residential

Weakening trend continues across Darwin: HTW residential
Weakening trend continues across Darwin: HTW residential

Darwin has experienced a few tough years and the weakening trend continued into 2019, according to a recent Herron Todd White (HTW) residential report. 

"The peak of the market (2013-2014), which was mainly inflated by the Ichthys gas project, was going to end at some point and we are now experiencing the aftermath," the valuation firm said. 

"Since the start of the year, we have seen declines in both sales and median price for all suburbs across Darwin (REINT)."

All markets have been hit, from residential to commercial, dwellings to units and the suburbs of Parap to Darwin River.

The weak market has been foreseen for some time now and it is now believed that home owners are coming to the realisation that their homes are not worth what they perceive.

This has been a difficult process and caused stress throughout the market and wider economy.

"We have seen some big reductions, especially in the Darwin CBD," the valuation firm noted. 

"There has been a 40% fall in the median unit and townhouse price from $565,500 in March 2015 to $330,000 in March 2019 (REINT).

"Also looking Palmerston way, the suburb Moulden has experienced some big reductions; recent analysed sales of dwellings show a drop in the order of 30% or more from 2013/2014."

A three bedroom apartment in the Darwin CBD has recently been sold at a reduced price of $330,000.

With views of the Darwin Harbour, the unit at 7/3 Harvey Street (pictured below) include open plan living and dining area, private balcony, three bedrooms and kitchen with stone bench tops.

The complex comes with secure parking and pedestrian access. 

Weakening trend continues across Darwin: HTW residential

"Be that as it may, we should not be discouraged by the current state of the market," HTW said. 

"Unfortunately, it is a reality that we are seeing some heavy reductions but to put things into perspective, we need to take a look at Australia as a whole." 

According to the Australian Bureau of Statistics (ABS), the latest release shows new lending for investment dwelling in Australia is at its lowest since 2011.

Additionally, lending for purchase or construction of a new home in Australia has fallen to its lowest level since 2013.

Lending to households has decreased year on year by 17.8% in the Northern Territory (ABS).

This is a heavy drop but again, but comparative to other states. Victoria and New South Wales have also both dropped year on year, 15.4% and 18.9% respectively.

The report suggests there has been a downturn in all states with the only exception being Tasmania.

"We are not alone up here. The silver lining is that we are now in a period of market affordability; the dream of owning a home or unit is now realistic for Territorians.

"As mentioned earlier, we are seeing home owners slowly accepting the very weak property market. This is reinforced by looking at the recent statistics for the northern suburbs.

"Although sales are decreasing, we are seeing prices stabilising to only minimal decreases (REINT, March 2019). It is only our opinion and we can only speculate that it means people will only sell if it is their last option, if not, they are holding onto their properties for a better market and thus price."

The rental market has steadied in recent times and popular locations are still easily rented.

A fully furnished two bedroom unit in Darwin City is on the rental market with a price guide $430 per week.

Located in a secure complex, the unit at 4/14 Dashwood Place (pictured below) comprises open plan living, balcony, two bedrooms and two car parks.

Weakening trend continues across Darwin: HTW residential

"We need to remember during these tough times the old saying 'you only lose if you sell'," the report said. 

However if you must sell, we are seeing well-presented properties still high in demand, so be sure to present your home in good condition, have neat and tidy landscaping and make sure there are no small works required by the potential buyer."

Since the start of 2019, there have been plenty of things done to pave the way to a more positive market.

The government has introduced new inventive schemes (Territory Home Owner Bonus) and construction of new buildings in Darwin (new four-level below ground car Park) and Palmerston (police station).

"We also note the interstate relocation schemes (Welcome to the Territory incentives) introduced in August 2018 will also make a positive impact in 2019.

"To end things off, we have seen land prices increase in the Palmerston suburb of Zuccoli (specifically the Aspire development).

"This increase came as a surprise to us but it is showing that the supply of land is not meeting demand and ultimately this can be seen as evidence that the government incentive program is playing its role.

"There is a lot happening to kick start the economy and our office remains positive that there will be a brighter market; it will just take time for the government schemes to take full effect." 

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Darwin Htw

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