Whats driving Darwin Market

[outbackjack]

Moderator please move to different section if you think it should be in different one.



OK whats driving the Darwin Market? It appears on RE.com and domain anything that is below 400k is getting snapped up quickly?

Is it all investors,FHOM?

Seems a lot of buying especially given that we are now in recession etc etc.

I am thinking about buying in Darwin, but at the moment its seems the market is boiling?

Locals whats the go?

Do you see a correction of prices in the future? Darwin is normally 18mth odd behind the rest of the country. It seems like the market Perth was a few years ago?

Cheers

 

[BayView]

It'll be a combo of FHB's and investors, but don't know the ratios.

 

[want2bewealthy]

Mate, We've been on constant boil n simmer for the past 10 years with no break, from 04 onwards prices have more than doubled in value.

We have the fastest population growth in the country and strongest local economy, with a shortage of housing, plus INPEX and a shedload of other big things coming to town so I don't see it coming off any time soon.

It's a combination of low rates, strong growth, supply n demand, infastructure, good employment and Government and Defence sectors, etc etc, its everything really but the FHO's are now pretty well out of the game in terms of securing finance as lenders require genuine savings now so see what happens.

If you check out RP Data's site, you'll find that the market in general has picked up 7% growth from Jan this year to present, possibly interstate investors deciding to park their cash here for strong growth and good rents.

 

[aw1]

10 years?

Things were doing pretty terrible here 10 years ago. The 90's were also flat and many people lost money speculating on things like waterfront blocks of land in Cullen Bay that were $300k then ($1.5 million now). Those blocks didn't budge in price for 10 years and many were sold at a loss (not to mention holding costs really burying people).

The boom here started in 2004.

 

[AUSPROP...]

all a temporary illusion. haven't you heard? US in recession, demand destroyed, we no longer need resources. It's because of 6 trillion USD of CFCs and DFSs set to reset mid year - and that's just the beginning. Expect a 40% drop in housing prices soon.

 

[want2bewealthy]

Well depends where you're looking?

Bakewell median sales graphed

1999 $50,000
2000 $70,000
2001 $110,000
2002 $180,000
2003 $210,000
2004 $270,000
2005 $285,000
2006 $345,000
2007 $380,000
2008 $400,000
Please add a further 7% to date for 2009

Darwin did however see a little uncertainty at some points early on.

 

[MJD]

are you still buying in Darwin

Hi Darwinies,
I am ready for a new purchase and really interested in Darwin Market due to high yield, and strong growth ( I hope). but also concerned about the quick growth during last 6 month. I bought 1 IP in Bakewell around 5 months ago for $360K but now I don't see anything alike within that range. so my question is : if you were to buy now, would you buy in Darwin or park your money somewhere else safer. love to hear your thought.
thanks
MJD

 

[want2bewealthy]

Crystal ball anyone?

FWIW its one of the only places still doing well CG wise..

PS, Good work on your Bakewell purchase, may I enquire if this was a house parcel or unit?

Hi Darwinies,
I am ready for a new purchase and really interested in Darwin Market due to high yield, and strong growth ( I hope). but also concerned about the quick growth during last 6 month. I bought 1 IP in Bakewell around 5 months ago for $360K but now I don't see anything alike within that range. so my question is : if you were to buy now, would you buy in Darwin or park your money somewhere else safer. love to hear your thought.
thanks
MJD

 

[MJD]

Crystal ball anyone?

FWIW its one of the only places still doing well CG wise..

PS, Good work on your Bakewell purchase, may I enquire if this was a house parcel or unit?

yes, it's a 10 years old house on a big block 1000sqm
cheers

 

[want2bewealthy]

Nice work, thats a great price for that area, cant find any at that price anymore

yes, it's a 10 years old house on a big block 1000sqm
cheers

 

[Imitation]

I don't really know what to say.. other than to sum it up by 'there is no financial crisis'... not here, not yet. Of course we will be hit at some point.

I think this will demonstrate what's going on in Darwin affordability wise.. Here's my summary of house / land prices.. it's rough but I think it's fair... just through observation.

1 bedroom units for 200+ (CBD / inner subs)
2 bedroom units for 280 - 320k
3 bedroom units for 300 - 350k
3 bedroom duplex for 370k+
2 bedroom house (if your lucky) for 370k+
3 bedroom house for 390k+
4 bedroom house for 420k +

Bottom end of the housing market will be 25+ year old probably ex housing commission homes in Palmerston or southern Northern suburbs (think Karama-ish). Bottom end of unit/duplex market probably in Palmerston 10 - 15 years old or Northern subs / inner subs 25+ years.

450m2 city (Francis Park) - 450k+
600m2 northern suburbs (Lyons) - 300k+
600m2 in palmerston (Rosebery, Farrar) - 250k+
2.5+ acres in palmerston (Marlow Lagoon) - 450k+
5+ acres in rural area (50km out: Humpty Doo) - 300k+
10 - 20 + acres in ruuuural area (100km out: Acacia, Marrakai) - Some ~ 150k but mostly 300k+++

Rural blocks cannot be subdivided below 2.5 acres I think. It's to maintain the rural living..

Factors for prices
- Agents pushing prices (can't really blame them for that)
- Lack of developed land
- High population growth
- Low unemployment
- High development.. next biggest thing INPEX!
- Investors drawn in by good returns.. increasing demand and creating a cycle...

 

[aw1]

Very flawed data there.

The early part consists almost entirely of vacant land sales. Medians naturally increase in new estates where land and established house sales have not been separated in the statistics, even when the market is flat.

Have a look at API magazine's stats in the back for Farrar. You'll have a laugh. But some people seriously rely on this data.

The median price for a house in Bakewell in 1999 was around $150,000, not $50k.

If you want to see real stats for Darwin, look at suburbs that were established 10 years ago with little or no vacant land available. The market was COMPLETELY dead 1999 through 2003.

Well depends where you're looking?

Bakewell median sales graphed

1999 $50,000
2000 $70,000
2001 $110,000
2002 $180,000
2003 $210,000
2004 $270,000
2005 $285,000
2006 $345,000
2007 $380,000
2008 $400,000
Please add a further 7% to date for 2009

Darwin did however see a little uncertainty at some points early on.

 

[Token Funder]

Same things that have always driven anything in Darwin:

A) alcohol
B) Federal Government money

 

[outbackjack]

Yer, I would say the market has been on the boil probaly 5 or 6 years, before that flat for a long time.

My personal view is that the prices increase cannot be sustained, Inpex(or whatever it is) I dont believe at the end will provide much. There was a lot of hype about the railway line, gas plant etc etc.

In the end Darwin is a place you love or hate. It is not as transient it was 20 years ago, but still high population movement.

I seen it the past the papers and real estate agents talking up there market, lot of southerners get caught up in the hype.

Ok this is my view only and I may be way off, or somewhere in between

 

[want2bewealthy]

At the end of the day, who knows what might happen.

All I know now is that Darwin is well established and growing, and thats a good sign.

There have been many saying that Darwin cannot sustain its prices but the fact is, it has, well beyond what many thought.

And also, we are still under-priced in some areas compared to other major capitals so I think we have a way to go yet personally.

 

[Imitation]

Public sector (17,000+) and Defence (5,000+) is a large % of the worforce so we're less hard hit in that resepect.

 

[Y33]

My understanding of the Darwin market from a few properties acquired over recent years.

Examples:

2BR unit ( previous owner) was original bought for 66K in 96 and sold to me for 72K in 2002, bank value 90K in 2005 and 280-310K 2009.

3Br unit 84K in 2002, 110K in 2005, 300-320K in 2009

2 houses 2005 both 330K each, 2009 450K & 550K. BValue I would put at being under by between 50K on first one and 75-100K on second. Second one is in NC for Darwin members. What do you think any NC houses under 600K?

Really can't see any signs of prices not going up further for at least 18 months due to govt & business spending coupled with extremely good lending rates.

Both of the units 2Br & 3Br will be on the market shortly but only want to off load one.

 

[AshleyS]

I bought a 2br unit in 05 for $170K - just revalued at $345K, rented at $350 per week, below market rent due to long standing tenant.

In 06 bought another 2br for $250 - just revalued at $355, rented at $390 per week.

Both valuations were done by independant valuer.

I'm happy with how things are going so far

 

[burty85]

My parents:
1993 in Howard Springs got a 4x2 on 2.5 acres 220K
2009 approx value 650K
I would say that is some solid growth over the long term.

Myself;
Jan 2007 Farrar 3x1 700sqm 309K
2009 approx value 430K


I was looking at my 2nd IP back in Darwin however I found a deal over here in Townsville that I couldn’t walk away from

Need to wait about 6 months to do the reno's over here to get some more equity for IP 4, Possibly back in Darwin (Palmerston) if I feel that the market has something to offer,

I do believe that the market will flatten in Darwin for awhile, there is only so much that ppl can afford to spend on a house. Could be a Perth over again

Yields up there were great, but now prices are catching up and killing the good deals IMO.

 

[Struddy]

I am very interested in the Darwin market, leaving at the end of the year and would like to get another property before then. Currently have a PPOR in Rosebery that I brought Sept 08 for 455k, very happy with this purchase as we were renting it at the time and didn't feel like moving. Built 2004, 700m2, 3 x 2, double lockup garage, pool. This property will become IP come 2010 and should have a good rental return.

Would like to get a similar property in one of the Palmerston suburbs that defence loves, Rosebery and Farrar first picks, then Durack and Gunn(Don't like the small blocks in Gunn). Think it might be too late for Farrar as every property mag has raved about it, don't really like the fact of being next to highway.

I am new to this but hopefully can sort something out this year around Oct.

Cheers

Struddy