The December 2015 Quarter presented some highlights for the calendar year, but very few, in what could be best described as a lacklustre year. The year, 2015, saw a fall of just over 29 percent in the number of House sales across the Greater Darwin area (which includes Palmerston) but a massive drop in the volume of sales of Unit/Townhouse which fell by some 62 percent. This was according to the quarterly RELM (Real Estate Local Market) report for the December 2015 Quarter, issued today by the Real Estate Institute of Northern Territory (REINT), now published at www.reint.com.au.
“Vacancy rates have continued to increase in most areas with the Darwin/Northern Suburbs area reaching an 8.2 percent vacancy rate on houses and a 9.2 percent vacancy rate on units” stated Mr Quentin Kilian, Chief Executive Officer of the REINT.
“While much of this can be attributed to the additional supply that came into the Darwin market in late 2014 and early to mid-2015, there is also a real issue of a declining population which is simply increasing the effect of the growing vacancy rates”, Mr Kilian said.
One of the few ‘bright points’ for this Quarter was that Palmerston saw a fall in its unit vacancy rate by a sizeable 3.1 percent. “This correlates with the anecdotal evidence we have been gathering that a sizeable number of renters have chosen to relocate to Palmerston in search of newer properties and lower rents” said Mr Kilian.
Alice Springs saw a sizeable jump in its vacancy rates in this last quarter of 2015. Mr Kilian noted, “This was predominantly due to larger numbers of properties coming under management. The number of houses under management by REINT member firms almost doubled in the past quarter and that pushed the vacancy rate up by 3.6 percent to 7.2 percent”. A similar increase in the unit market was noted with these going up by 5.5 percent to a very high 13.7 percent.
“But I must add to this, that while these are high numbers we must bear in mind the smaller size of the Alice Springs marketplace and thus the propensity for statistics to reflect, on a greater scale, movements up and down” said Mr Kilian. “These number are reflective of (at the time of press) 64 vacant houses and 226 vacant units out of more than 2,500 properties under management.”
Sales wise, whilst the volume of house sales fell again this quarter - down 7.7 percent - the median price actually grew slightly to $608,750. Mr Kilian said “This is reflective of the sales activity in the higher brackets with 112 of the 216 recorded sales being above the $600,000 mark and a further 81 of those sales being above $500,000.”
Unit sales bounced back a little in the December 2015 Quarter, up by 37.6 percent. However this is still significantly lower than at the same time last year.
Mr Kilian stated, “One of the biggest issues for us, throughout 2015 and still ongoing into 2016, is the inability of the Government to recognise the impact on the marketplace through its removal of any incentivisation for first home buyers into the existing house market.” He further noted, “We continue to lobby the NT Government for change and the easiest and most effective change would be to simply remove all or part of the stamp duty for first home buyers purchasing existing properties. There are a lot of properties priced under $450,000 in the Darwin, Alice Springs and Katherine markets that are perfect for first home buyers that are not being taken up. “
“This means that ‘empty-nesters’ struggle to sell their properties and downsize, ‘aspirational buyers’ who want to upsize cannot buy the properties from the empty nesters and first home buyers can’t buy what the second group would be selling. So by shutting first home buyers out of the existing home market, the NT Government has disrupted the natural cycle of housing”, Mr Kilian explained.
Mr Kilian said “We will continue to lobby Government on this issue but we would hope that it can see sense and reverse its decision to remove the incentives for first home buyers looking to purchase an existing home, and make that decision sooner rather than later. The damage has been done, but it’s not irreparable.”
Mr Kilian further stated, “The Chinese New Year is almost upon us, so Kung Hei Fat Choy and let’s hope the Monkey bestows favours on you in 2016.”
The full RELM Report is available for free download from the REINT Website – www.reint.com.au.
