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Northern Territory market leaves tough times behind in 2012
March 21, 2012
With the New Year well and truly under way, the slow paced property market of 2011 is a distant memory for many in the Territory. The Real Estate Institute of Northern Territory (REINT) has released its data for the December 2011 quarter, which supports a likely resurgence for the Darwin and Alice Springs property market this year.
Darwin activity up but medians show little change
House sales for the overall Darwin region (encompassing Darwin City, Northern suburbs and Palmerston) saw a jump in volume of properties sold of 22% from the previous quarter. Unit sales followed the trend with a sharp increase in volume of 70.6% from the previous quarter.
We can assume that this volume rise is a mixture of astute investors who have predicted the bottom of the market and have jumped in and investors seeking to enter the market ahead of the $35 billion INPEX LNG project announcement. These investors are a mixed bag of both local investors and home buyers, along with a good number of southern investors who are looking to get into this market.
Surprisingly despite this large increase in the sales volume, the median house price in Darwin rose only slightly, by 1.7%, to $516,000, and the median unit price dropped by 1.2% to $415,000. This indicates that buyers are buying up existing stock that is in the marketplace, and as this stock is sold, it may put upward pressure on pricing.
A mixed bag for Alice Springs
A different picture was painted in Alice Springs, with a decrease in house sales volume of 25%. Despite this drop, the house median price increased over the previous quarter by 2.3% to $446,750. On the contrary, unit sales recorded a sharp increase in the volume of properties sold, 110%, with median unit prices falling by 2.9% from the previous quarter to $346,000.
The Alice Springs market can be quite fluid with seasonal workers coming and going. In recent times the city has seen a large number of public servants depart as the Federal Government’s ‘Intervention’ project was wrapped up.
A bright future for the NT property market in 2012
This news, coupled with our statistics and the recent survey by the Australian Property Council and ANZ Bank (which ranked the Northern Territory second to WA in optimism for the Property Market), suggest exciting times to come for the Darwin property market. Alice Springs, despite its seasonal adjustments, still remains a solid investment market returning rental yields at or above 6 percent.