Justine Searle never imagined selling her home in Darwin would prove to be a challenge that lost her $100,000.
“We had purchased it back in 2010 off the plan for $465,000, and when we did sell, we sold for $362,000,” she said.
Ms Searle had bought the apartment in the inner-city suburb of Woolner, just before the construction boom of the Inpex gas project, and rented it out.
But she and her partner felt they were “throwing good money after bad” trying to pay off the mortgage, despite it nearly always having tenants.
Late last year, Ms Searle and her partner put it on the market for just under $400,000.
“There were no takers at all, the agent didn’t even get a phone call,” she said.
After months of no traction, increasing interest rates, and chipping in almost $1,000 a month for associated costs, Ms Searle and her partner decided to cut their losses.
The property sold within days after dropping the price.
NT property market ‘in peril’
Darwin remains the cheapest capital city to buy in the country, with median home prices at just over $490,000, PropTrack senior economist Eleanor Creagh said.
And though prices rose marginally — to 0.16 per cent above April 2023 levels — last month, returning to positive growth for the first time in more than a year, Darwin’s market is growing at one of the slowest rates in the country.
Rental prices continue to increase at a fast pace in Darwin, sitting at an average of $600 a week, compared to $560 in Melbourne and $600 in Brisbane.
Derek Hart has been a real estate agent in Darwin for 16 years, and is seeing scores of young people taking advantage of low sales prices, and many others fed up with high rents, buying homes instead.
“We’ve got a lot of first-time buyers coming into the market. So people are realising that the interest rates at the end of the year are going to be dropping,” he said.
“And with rents going up … in the long run with capital growth, it’s better for the buyer to purchase a home instead of renting.”
However, Aswin De Silva, chief executive of REINT, the NT’s peak real estate body, says the “property market is currently facing major issues”.
“I don’t mind calling it, we are in peril,” he said.
He said house prices have remained stagnant since 2022, and in regional centres like Katherine and Alice Springs prices “have taken a beating”.
Mr De Silva said rental yields — the amount of money an owner is making on an investment property — were currently about 7 per cent.
“This is unhealthy and not sustainable as family income available to pay rents are going down, largely due to cost of living pressures,” he said.
“Vacancy rates are stable at slightly under 5 per cent but could increase if we see an escalation of crime and anti-social issues particularly in Alice Springs.”
‘Nobody’s going to stay here if rent rates are high’
In the wake of crime waves that have been covered extensively in the media, interest rate hikes and financial stress, Mr De Silva said the NT’s market challenges are not going anywhere anytime soon.
And to make matters worse, he said a scarcity in affordable homes meant people were not coming to the territory to invest.
“Nobody’s going to stay here if rent rates are high, and there is no affordable housing,” he said.
“It is very difficult to get private investments and developer inducement with exorbitant building costs, supply-chain issues and complex approval processes.”
While some parts of Australia are seeing record increases in population, the NT’s has remained almost stationary.
Mr De Silva said that’s because people don’t see opportunities or a future in the NT and aren’t willing to pay the high housing costs, driving down demand.
“It’s why migrants come, they get their permanent residency or they finish their education and they move elsewhere,” he said.
“Most mums and dads who have young children want to educate their children elsewhere.
“They don’t see a pathway for them to grow.
“All these things need to be addressed for us to be also running the race with other capital cities, to ensure investors and landlords see a capital benefit.”
‘Bold plans’ and building boosts
This month the Country Liberal Party announced it would provide first home buyers up to $50,000 to help build a new home, and $30,000 to new Territorians to build a home to live in, if elected into power at the August election.
“This is a bold plan that will help boost our population, retain skilled workers and stimulate construction,” CLP leader Lia Finocchiaro said.
NT Chief Minister Eva Lawler said first home buyers in the territory have access to $10,000 stamp duty relief, and that up to 100 new homes would be built over the next five years under her government, with $50 million invested in building more affordable homes.
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