I’m not saying it’s now or never, but it seems we are getting closer and closer to a situation where authorities need to address the aspect of affordable housing as the highest priority. It is difficult to have overnight solutions, but actions and perceptions do matter.
The official cash rate at 3.85% is a whopping 3.75% increase since April 2022. Significantly reducing mortgage holder ability to meet housing loan commitments and equally noteworthy is the heightened difficulty for new borrowers to raise capital to purchase dwellings. The proportion of the family income in NT to meet rental payments is 26% which is ahead of the national average at 23%. The good news is that this number has not varied much in 2022. On the contrary, the proportion of the income to meet average loan repayments increased to 32% from 25% 12 months ago. Most significantly we experienced a 27% drop in first-home buyer loans over the last 12-month period. We should all endeavour to keep the door open for this important cohort.
Residential Sales
Of the total NT volume of sales during this quarter, Palmerston contributed 33%. Alice Springs and Katherine contributed 14% and 4% respectively. Although the Median House prices in Darwin over the quarter increased the annual prices dropped by 4%. Darwin North and Palmerston median house prices during the quarter increased by 13% and 4%. Alice Springs median house price movements were negligible. Unit/Town House sales in Darwin reduced materially during the quarter but increased in Alice Springs. Median unit prices in overall Darwin are reporting lower as well.
Residential Rentals
Darwin’s overall rental yields remain strong at 6% and 6.2% for a 3-bed house and 2 bed unit with marginal variance from the previous quarter. However, approximately 2% increase is reported quarter on quarter for weekly rentals. An average weekly rental of $480 for a two-bed unit in overall Darwin is a 13% increase over the last 12 months. Following a similar trend, the weekly rentals of a 3 bed house in Darwin have increased by 12%. A significant increase thus indicating a higher demand for rental properties. Although the unit rental yields in Alice Springs haven’t varied during the quarter, Katherine’s yields increased rapidly and are closing upon double digits.
Vacancy Rates
Darwin’s overall dwelling vacancy rates continue to remain low around 2.5%. As anticipated, higher house vacancy rates are offsetting significantly lower vacancy rates reported in units. However, it is noteworthy to report on vacancy rates in Alice Springs and Katherine. On the back of recent lease breaks from tenants, the vacancy rates of these two regional areas have increased to 5%. Needless to state improvements in security would facilitate lower rates.
It is evident the NT market is changing rapidly. Challenges remain but early assessment of the environment and sound decision making could augment the negatives. We will keep supporting our valued members in this endeavour of sound decision making
Aswin De Silva
REINT, CEO
Q1 RELM CEO Report – March 2023 – to read the full report:
