Following a five-year reign of the “most depressed” property market the Northern Territory has seen in decades, which saw almost a decade of capital gains wiped away, the territory is showing signs of regaining its footing.
New figures from the Real Estate Institute of Northern Territory (REINT) have revealed a 10.8 per cent quarterly increase in residential house sales in the March quarter to 278, with year-on-year growth hitting an impressive 51.1 per cent.
Median house prices also saw solid gains, with three-bedroom homes witnessing a 9.4 per cent quarterly increase to $547,000 — a rise of 16.4 per cent on the year.
But while the gains signal a positive trajectory for the Northern Territory, REINT CEO Quentin Kilian advised investors to remain cautious.
According to Mr Kilian, while the year started with a “real flurry of buying activity”, the Northern Territory is coming off over five years of perhaps the most depressed property market it has seen in decades.
“The start of 2021 has continued the pick-up that began last year. While the buyer demand remains strong, it will continue to take median prices back to normal levels,” Mr Kilian said.
The majority of the territory’s residential house sales were recorded in Palmerston, where sales volumes increased by as much as 62 per cent over the year to 115 properties sold in the first quarter. Palmerston’s median house price also lifted by 17.6 per cent to $500,000 over the same period.
Alice Springs saw a higher 77 per cent annual increase in sales volumes, with a median house price of $469,000.
But it wasn’t just the housing market that flourished, as the Northern Territory’s units and townhouses also proved strong post-pandemic, with sales up by 4.3 per cent over the quarter and 43.3 per cent over the year.
Meanwhile, the median unit price for a two-bedroom unit climbed by 3.1 per cent over the quarter and 9 per cent over the year to $330,000.
Similar to the housing market, Palmerston recorded very solid unit sales, up by 29.4 per cent over the quarter, while its median unit price gained 30.6 per cent to $320,000.
Residential land sales also recorded a strong performance, with sales volumes for blocks under 600 sq m increasing by 128.6 per cent over the quarter and 242.9 per cent annually. The median price remained steady at $191,000, the report noted.
Sales on blocks between 601 and 800 sq m fell slightly over the quarter but still recorded a 300 per cent rise annually.
Even larger blocks up to 2,000 sq m were hot assets, with sales rising by 62.5 per cent over the quarter and 550 per cent over the year. Median price also lifted by 23.5 per cent annually.
Like much of the Northern Territory’s property market, the rental market also provided strong gains for investors and landlords, according to the report.
Rents for three-bedroom houses rose by 6 per cent in the quarter to $538.50 per week — an annual rise of 17.3 per cent.
Meanwhile, median unit rents moved by a much lower 0.1 of a percentage point to $364 over the quarter, but this still represented a 10.3 per cent gain compared with March 2020.
Rental yields also remained strong at 5.1 per cent for houses and 5.7 per cent for units.
“We remain one of the best investor markets in Australia, with the strongest rental yields of any Australian capital city, and the yields in Katherine and Alice Springs regularly exceed 6 per cent,” Mr Kilian said.
Overall vacancies also tightened across most of the territory, with Greater Darwin at 1.8 per cent, Palmerston at 1.6 per cent and Alice Springs at 2.4 per cent.
And while overall vacancy rates stood at 2.4 per cent in regional areas, rural unit vacancies hit zero.
Looking ahead, the CEO expects further growth for the Northern Territory’s property market.
“The territory is looking at some very exciting and major projects coming to fruition, which create jobs and stimulate the economy. So, I don’t see the demand dropping off at any time in the near future,” Mr Kilian concluded.