Just thought i'd add this to the stable of interesting articles. I contemplated buying a property up here but I spoke to a few PMs and they put me off. With 10% fees and high incidence of lease breaking etc it was not attractive to me (and high insurance costs).
They have misquoted the project i'm working on - it should read LNG Project (there's a bit of difference in LPG and LNG). The locals here think that there is a huge future for NT but I believe there will still be a -ve population growth. Our project is employing heaps (>1000 eventually) but we will leave next year and <50 people will operate the plant. This was the same for AdRail....
There are some good places to buy that will always be rentable but the city units that are old and tired stay vacant for a long time. I know some people are quite successful investing up here but the Sthn investors may get rather badly burnt in the midday sun....
here is the link for the storey
http://www.theaustralian.news.com.au/common/story_page/0,5744,9477499%5E25658,00.html
Ecogirl
Buyers snap up Top End in search for new territory
By Anthony Klan
May 06, 2004
DARWIN developers are betting the house on a surge in employment in the Top End as residential building heats up and investors fleeing the southern markets pour into the city.
High yields, healthy forecast employment growth and the promise of strong capital gains are luring southern investors to Darwin, according to local agents, and the majority of them are buying property sight unseen over the internet.
Herron Todd White Darwin senior valuer Terry Roth said the large-scale influx of southern investors began in earnest six months ago and had been spurred on by several big infrastructure projects, including the Alice Springs-Darwin railway and the Wickham Point LPG plant on Darwin's Harbour.
Mr Roth said that more than 40 per cent of inner-Darwin apartments sold in the past six months had been bought by interstate investors, and while it was likely Darwin would experience sufficient employment growth to absorb new development stock, there could be problems if the jobs failed to materialise.
"Provided we get the employment growth that's been forecast, it should be okay, but if we don't – and bearing in mind Darwin has had negative population growth over the past four or five years – then there could be big problems," Mr Roth said.
Access Economics has forecast employment in the NT will grow by 4 per cent in 2004-05 and 3 per cent in 2005-06, before falling by 2 per cent in 2006-07 and flattening to 0.8 per cent growth in 2007-08.
James Allnutt, of Access Economics, said that while there were no employment statistics for Darwin itself, the aggregate NT forecast could be applied to the city as it "generally performed slightly better" than the rest of the territory.
Local developers have been quick to respond with more than $100 million worth of other apartment projects already planned, according to the NT department of industry.
Mr Roth said the sale of CBD units, which are traditionally very popular with investors, had more than doubled in the past year.
According to Herron Todd White, 146 units were sold in Darwin's CBD in the year to March 2003 at an average price of $211,797. This figure rose to 320 sales at an average price of $299,861 in the year to March 2004.
Ray White Darwin principal Karl Secondis said rental yields of between 6 and 8 per cent were attracting many southern investors to Darwin and that "in most cases" investors had been buying property sight unseen over the internet.
"The Darwin market has been sleeping for the last few years and there really hasn't been any signs of growth until the last eight months," he said.
Mr Roth said a large transient working population and the relatively low value of property in the city – which only last year recorded its first residential property sale over $1 million – helped underpin the strong yields.
He said, however, that some interstate buyers were buying in areas "that have got risks that they just don't have the opportunity to see" and that this was "definitely a problem".
Mr Roth said some of these investors were paying too much for properties but the heated market had so far prevented any casualties.
But Mr Secondis argued most investors were buying property with leases already in place. "To an investor if it's worth it at $200,000 because they're getting $280 a week rent, then so be it.
Colliers International Darwin director Chris Hyland also said there was a danger of investors paying too much for properties.
"From what I hear there's some (southern investors) that could be being induced to pay 20 per cent over the odds, not knowing what the market is," Mr Hyland said.
"We haven't experienced any ourselves because we haven't got into that arena – but we've had them calling."
Mr Hyland said locals had also become very active in the market.
He said Colliers International had recently marketed a 45-apartment development at Cullen Bay that he "could have sold three or four times" to enthusiastic southerners but "gave preference to locals", who bought 80 per cent of the project.
"We've been inundated with people from Sydney and Melbourne looking to invest in Darwin, they ring up constantly saying 'can we get one, can we get one?'."
Darwin's inner-city market, which includes all suburbs south of Darwin International Airport, saw 623 units (worth a total of $156 million) completed in the nine months to March this year, according to the Australian Valuation Office.
This was up from the 454 units (worth $103 million) which came on to the market in the entire 12 months to June 2003.
According to the Real Estate Institute of Northern Territory (REINT), the median price of units in the inner-city market was $255,000 in the March quarter, up 3.2 per cent for the quarter and 24.1 per cent for the year.
The collective median house price for Darwin (and the satellite city of Palmerston) was $260,000 in the March quarter – up 13 per cent in the quarter, and 20.9 per cent for the year, according to REINT.
Mr Roth said inner-Darwin unit and house price growth figures reflected capital gains and the better quality stock that had hit the market during the past 12 months.
Construction in Darwin is showing no signs of abating and plans for the city's tallest building – a 33-storey, 108-unit apartment block – are currently before the Development Consent Authority.
According to market sources, the NT government, in spite of significant community backlash, is believed to support the $60 million project and local developer Sunbuild is expected to be given the green light this week.
In another big project, the NT Government expects to begin construction of its $600 million Waterfront development public-private joint venture, which is expected to include some medium-to high-density residential development, early next year.
Last month, the Defence Housing Authority announced it was seeking a private partner to develop 77ha of land at Lee Point in Darwin's north. The proposed development is for between 650 and 900 fully serviced allotments. The DHA plans to use 300 of the blocks to build housing for defence force personnel and release the remainder into the housing market.
Work is expected to begin in February.
They have misquoted the project i'm working on - it should read LNG Project (there's a bit of difference in LPG and LNG). The locals here think that there is a huge future for NT but I believe there will still be a -ve population growth. Our project is employing heaps (>1000 eventually) but we will leave next year and <50 people will operate the plant. This was the same for AdRail....
There are some good places to buy that will always be rentable but the city units that are old and tired stay vacant for a long time. I know some people are quite successful investing up here but the Sthn investors may get rather badly burnt in the midday sun....
here is the link for the storey
http://www.theaustralian.news.com.au/common/story_page/0,5744,9477499%5E25658,00.html
Ecogirl
Buyers snap up Top End in search for new territory
By Anthony Klan
May 06, 2004
DARWIN developers are betting the house on a surge in employment in the Top End as residential building heats up and investors fleeing the southern markets pour into the city.
High yields, healthy forecast employment growth and the promise of strong capital gains are luring southern investors to Darwin, according to local agents, and the majority of them are buying property sight unseen over the internet.
Herron Todd White Darwin senior valuer Terry Roth said the large-scale influx of southern investors began in earnest six months ago and had been spurred on by several big infrastructure projects, including the Alice Springs-Darwin railway and the Wickham Point LPG plant on Darwin's Harbour.
Mr Roth said that more than 40 per cent of inner-Darwin apartments sold in the past six months had been bought by interstate investors, and while it was likely Darwin would experience sufficient employment growth to absorb new development stock, there could be problems if the jobs failed to materialise.
"Provided we get the employment growth that's been forecast, it should be okay, but if we don't – and bearing in mind Darwin has had negative population growth over the past four or five years – then there could be big problems," Mr Roth said.
Access Economics has forecast employment in the NT will grow by 4 per cent in 2004-05 and 3 per cent in 2005-06, before falling by 2 per cent in 2006-07 and flattening to 0.8 per cent growth in 2007-08.
James Allnutt, of Access Economics, said that while there were no employment statistics for Darwin itself, the aggregate NT forecast could be applied to the city as it "generally performed slightly better" than the rest of the territory.
Local developers have been quick to respond with more than $100 million worth of other apartment projects already planned, according to the NT department of industry.
Mr Roth said the sale of CBD units, which are traditionally very popular with investors, had more than doubled in the past year.
According to Herron Todd White, 146 units were sold in Darwin's CBD in the year to March 2003 at an average price of $211,797. This figure rose to 320 sales at an average price of $299,861 in the year to March 2004.
Ray White Darwin principal Karl Secondis said rental yields of between 6 and 8 per cent were attracting many southern investors to Darwin and that "in most cases" investors had been buying property sight unseen over the internet.
"The Darwin market has been sleeping for the last few years and there really hasn't been any signs of growth until the last eight months," he said.
Mr Roth said a large transient working population and the relatively low value of property in the city – which only last year recorded its first residential property sale over $1 million – helped underpin the strong yields.
He said, however, that some interstate buyers were buying in areas "that have got risks that they just don't have the opportunity to see" and that this was "definitely a problem".
Mr Roth said some of these investors were paying too much for properties but the heated market had so far prevented any casualties.
But Mr Secondis argued most investors were buying property with leases already in place. "To an investor if it's worth it at $200,000 because they're getting $280 a week rent, then so be it.
Colliers International Darwin director Chris Hyland also said there was a danger of investors paying too much for properties.
"From what I hear there's some (southern investors) that could be being induced to pay 20 per cent over the odds, not knowing what the market is," Mr Hyland said.
"We haven't experienced any ourselves because we haven't got into that arena – but we've had them calling."
Mr Hyland said locals had also become very active in the market.
He said Colliers International had recently marketed a 45-apartment development at Cullen Bay that he "could have sold three or four times" to enthusiastic southerners but "gave preference to locals", who bought 80 per cent of the project.
"We've been inundated with people from Sydney and Melbourne looking to invest in Darwin, they ring up constantly saying 'can we get one, can we get one?'."
Darwin's inner-city market, which includes all suburbs south of Darwin International Airport, saw 623 units (worth a total of $156 million) completed in the nine months to March this year, according to the Australian Valuation Office.
This was up from the 454 units (worth $103 million) which came on to the market in the entire 12 months to June 2003.
According to the Real Estate Institute of Northern Territory (REINT), the median price of units in the inner-city market was $255,000 in the March quarter, up 3.2 per cent for the quarter and 24.1 per cent for the year.
The collective median house price for Darwin (and the satellite city of Palmerston) was $260,000 in the March quarter – up 13 per cent in the quarter, and 20.9 per cent for the year, according to REINT.
Mr Roth said inner-Darwin unit and house price growth figures reflected capital gains and the better quality stock that had hit the market during the past 12 months.
Construction in Darwin is showing no signs of abating and plans for the city's tallest building – a 33-storey, 108-unit apartment block – are currently before the Development Consent Authority.
According to market sources, the NT government, in spite of significant community backlash, is believed to support the $60 million project and local developer Sunbuild is expected to be given the green light this week.
In another big project, the NT Government expects to begin construction of its $600 million Waterfront development public-private joint venture, which is expected to include some medium-to high-density residential development, early next year.
Last month, the Defence Housing Authority announced it was seeking a private partner to develop 77ha of land at Lee Point in Darwin's north. The proposed development is for between 650 and 900 fully serviced allotments. The DHA plans to use 300 of the blocks to build housing for defence force personnel and release the remainder into the housing market.
Work is expected to begin in February.
