June 21, 2019 | 02:28 AM

Property & Home

08.08.2018Property round-up: Focus on Northern Territory

This article will explore exactly what the current state of the market is in NT, and it will also look closely at what the future holds for this increasingly beleaguered part of Australia.

The Northern Territory (NT) contains some of the most remote parts of Australia, and the property market here is certainly different in nature to the market in places like Melbourne, Sydney and Perth. While those cities enjoy a diverse labour force and have a range of strong pull factors to offer, Darwin and the rest of the Northern Territory can’t claim these advantages. 

In large part, Darwin’s property market has been reliant on natural resources jobs for many years. With these in decline, things are starting to look less rosy for the property market here. This article will explore exactly what the current state of the market is in NT, and it will also look closely at what the future holds for this increasingly beleaguered part of Australia.

The figures: Drops all around

Unfortunately for homeowners in this state, it’s hard to look at property market performance in Darwin and see anything positive. In the year to February 2018, property prices plummeted by an average of -7.4% – which is not a good sign when compared to a drop of -0.5% in Sydney. Other statistics don’t offer any more hope for the region. At one stage, prices in the area were looking up, but at the end of February this year, they had gone down by an enormous -22.3% compared to the peaks they saw over the last few years. For those who bought during the boom times, this represents a spectacular – and worrying – drop.

The impact of natural resources

In large part, this decline is due to the changing labour market in NT. The area used to attract plenty of new residents with demand for homes thanks to the mining and gas industries, but that’s all changed since these industries went into decline. Figures from the Real Estate Institute of the Northern Territory show that there has been a 53% decline in the value of home sales since the peak of the gas sector’s heady days back in the 2014–15 financial year, which is a real worry for homeowners.

Leaders at the Institute agree, and one said that these figures brought it into sharp focus: "I knew that we were in a tough market, but when you see it written down in numbers like that, that is a massive drop in revenues that are coming in," the organisation’s President Quentin Killian told ABC News.

The NT plays host to a major liquefied natural gas extraction endeavour, known as INPEX-Ichthys. But while in previous years there were plenty of workers in the area for this, that’s now different. Levels of workers reached their heights several years ago and never recovered. Darwin’s job market is also looking low, and it even managed to record a net loss of employment positions in 2017.

Looking to the future

Unfortunately for the NT, it’s looking unlikely that there’ll be a housing price boom in the coming year, or perhaps over a longer period. The $30bn plus INPEX-Ichthys centre doesn’t appear to be returning to its previous worker levels any time soon, and analysts believe that there are no other obvious economic boosts about to arrive in its place. And while the state government in NT did pledge in May to publish a plan to bring more people to the state, this has not yet materialised – a sign which could indicate the general level of pessimism which surrounds the state’s prospects.

The Northern Territory’s housing market is, unfortunately, in bad shape. The overall figures indicate plummeting property values thanks to the end of the natural resources boom, and these statistics don’t look good in comparison to the other Australian cities either. The next hope for residents and investors in the state, then, is for the state government to act to attract more people to the area. If not, it’s possible that the area is in for a period of long-term decline.

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