DARWIN’S established residential property has emerged as one of Australia’s attractive investment market, whereas Perth continues to struggle with local valuers reporting that buyers who bought land to build a new home, have found that upon completion, their house is worth less than they spent.
In the Australian Property Institute’s Residential Market Update, Herron Todd White managing director – Melbourne and API spokesperson Tony Kelly said Darwin is coming off the back of significant price drops, but yields are “quite good”.
“They would say that they’re hopeful that it’s the bottom of market.
“It’s probably one of the markets the start to look at and think, lining everything up, that’s the one with potential to change in the near future,”
However, its fringe market continues to struggle through the mining downturn. Perth’s first home owner market remains the hardest hit for the same reason, with local valuers suggesting that if people buy land and build a new home, it is worth less than the outlay once finished.
Kelly said the middle ring is seeing more activity, particularly among upgraders.
“They’re thinking that they can come in closer to town – better property, spend a bit more money, and there’s value for money in that – so we are starting to see some upgrading happening in that middle ring, which is really good for Perth.”
Sydney and Melbourne’s outer suburbs have seen good land price growth in the past 12 to 18 months in land prices, both at around 10% to 15%, pushed along by population growth and Sydney further by infrastructure projects.
Recent data from the Australian Bureau of Statistics showed that Melbourne led the country for population growth, up by 2.7% to 125,424 in the year to June 2017, while Sydney was next with 2.0% at 101,558.
Kelly said Brisbane is similar, without the price growth in values and new property that Sydney and Melbourne have had.
“But Brisbane across all of its markets tends to be a bit of an overflow catcher …when Sydney and Melbourne are going strong or get too expensive, Brisbane tends to switch on as a real estate market.” Kelly said.
Australian Property Journal