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Darwin property market turns a corner
May 24, 2012
2012 has started with a bang for the Territory, with the biggest quarterly rise in median house values since December 2009. With the recent release of the Real Estate Institute of the Northern Territory’s (REINT) latest March quarter data, we can see that the market is making a recovery, leaving tough market conditions behind.
Medians show signs of recovery
After a 22 per cent increase in the house sales volumes in the Greater Darwin area in the last quarter, the March 2012 quarter has seen a 6.6 per cent increase in median house prices. This represents the largest increase in medians since the December quarter of 2009. Interestingly, this 6.6 per cent increase brings the median house value for Darwin overall back to exactly where it was this time 12 months ago, at $550,000.
Sales volume for units/townhouses in Darwin however hasn’t experienced the same growth as houses, increasing by a mere 0.4 per cent. Median unit / townhouse prices have also remained unchanged from the December quarter, holding steady at $415,000. However, year on year median prices for units/townhouses have decreased by 4.6 per cent. This is mainly due to a previous oversupply of inner city units being taken up. We can expect to see prices rise on units as we head further into 2012.
We have also seen an improvement in Alice Springs, where sales volumes have increased 19.7 per cent over the quarter. This is a much improved result compared to the 25 per cent decline in sales volume experienced over the December 2011 quarter. Despite the growth in sales activity, the median house price in Alice Springs has fallen by 2.6 per cent in the March quarter to $435,000, and the unit/townhouse median price has declined by 6.1 per cent to $325,000. This decline may be attributed to supply outweighing demand over the quarter.
Overall what is most encouraging is that across the Northern Territory, we have achieved just over $1 billion in sales, for the 2011/12 financial year to date.
Rental market not left behind
This quarter we have seen a further tightening of the rental market in all jurisdictions except for Alice Springs. Darwin’s vacancy rate has fallen to 1.9 per cent, Palmerston is at 1.8 per cent and Katherine has again recorded a zero per cent vacancy rate. The vacancy rate in Alice Springs has decreased 0.3 per cent, yet still remains higher than the rest of the Territory at 3.1%.
We are also pleased with the rental yield results. The March quarter data reveals that rental yields in Darwin for a 3 bedroom house as well as a 2 bedroom unit have both remained above 5 per cent. This figure remains above the other state averages of about 3-4 per cent.