The Northern Territory news Thu 8 Jul 2010
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Community newspapers -- Northern Territory -- Darwin; Australian newspapers -- Northern Territory -- Darwin
Nationwide News Pty. Limited
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Nationwide News Pty. Limited
NT BUSINESS REVIEW, July, 2010 9 P U B : NTNE-WS-DA-TE:8-JUGE:109LO-R: C-M Y-K ANDREW WISE of Herron Todd White surveys the residential property scene AFTER years of solid growth and strong rental returns in the majority of Darwin's residential property market, it appears as though things are slowing down and the market may have reached its peak. Overall, the market is likely to plateau for the short term until the next large infrastructure project starts most likely to be the much anticipated Inpex gas project. Where would one spend $500,000 if given the chance? Unfortunately, there are few options available to buy property in this price bracket. But it is not all grim. With some careful research, such opportunities still exist. As for rental returns versus potential capital growth, this article aims at identifying the types of properties that should remain popular with tenants and owner occupiers in the long term and, therefore, this stock should provide a solid investment. There is an emerging oversupply of newly-built, prestige, three-bedroom units, for sale and rent, in the Darwin CBD. This oversupply may eventually result in softening of sale prices and achievable rents, which could have a flow on effect. On a positive note, Darwin has a very young and transient population, many of whom like to live close to the CBD, for ease of getting to work and proximity to the nightlife. As such, the lower end of the unit market in the CBD is likely to remain popular. For example, there is a two-bedroom, two bathroom unit for sale towards the end of the Mitchell Street entertainment precinct for about $490,000, with a rental return indicating about 6.5 per cent yield. Although this yield appears higher than the average two bedroom unit (generally 5.5-6 per cent), this type of product offers much better future growth potential as opposed to the three-bedroom unit market. City fringe suburbs such as Larrakeyah, Stuart Park, Parap and Woolner are all within five kilometres of the CBD and each offer unique lifestyle qualities, such as proximity to the Parap market or views of the Gardens golf course. The proximity to the CBD, as well as the unique suburb features, will ensure these suburbs remain popular. As with the case of CBD units, the more affordable sector of the market offers the best potential for future growth. The sea-fringing northern suburb locales of Nightcliff and Rapid Creek have always been popular with renters and owner occupiers. Within walking distance of the hospital and university, the scenic Nightcliff foreshore encourages exercise and the Beachfront Hotel ensures those who get thirsty can unwind with a drink. There remain many older style one and two-bedroom units with good sea views for sale along the foreshore. As with most places within Australia, these views should ensure capital growth will continue. A final suburb worth mentioning is Millner. With future expansion of the Homemaker Village planned, as well as development of the airport bulky goods centre, Millner's popularity is likely to increase. Townhouses and semi detached ground level units are another type of property worth considering. These appeal to a broad sector of the market including renters, first homebuyers and those wishing to downsize. Areas such as The Gardens, Fannie Bay, Brinkin, Tiwi and Leanyer are all well sought after for this type of property as they each offer a unique lifestyle appeal. With limited land available for further expansion in Darwin and the northern suburbs, this type of dwelling offers the next best alternative to living in a house. The broad type of buyer that these dwellings appeal to should ensure demand will remain strong. The final type of property worth considering is a house in the northern suburbs. For this price, one could only buy an original basic dwelling. But if the dwelling has good structural bones, and a floor plan that would enable relatively easy extensions and renovations, good capital growth should be enjoyed upon completion of the works. 09PROPERTY PROPERTY PROPULSION: the lower end of the CBD market is still flying high How to spend $500,000 Housing market waits for Inpex 5 0 fa 0 9
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