NT home price figures revealed

The Territory’s property market has gone against the grain and recorded a decline in house prices. But one real estate expert says next year could be a different story.

Darwin’s property market has bucked the national trend, recording a decline on house prices.

According to the PropTrack Home Price Index report, released on Friday morning, Darwin home prices dipped by a 0.12 per cent in November – the only capital city to decline.

However prices for regional NT homes increased in the same time period.

Darwin prices sit 1.75 per cent below their level from this time last year and almost 3 per cent below their May 2022 peak.

However, Darwin’s home prices have increased by a total of 24.9 per cent since the start of the pandemic in March 2020.

Regional NT home prices sit 2.21 per cent below their level in November 2022 with a slim rise of 0.03 per cent from last month.

Senior Economist and report author Eleanor Creagh said the data showed the Territory was not as “resilient” to interest rate rises compared to other cities.

“We’ve seen that interest rates have risen substantially and that’s reduced maximum borrowing capacities for potential buyers,” she said.

“Many other markets have been resilient to the impact of higher interest rates, but I think with the demand to buy in the Northern Territory, and not being buoyed by quite as strong rental market conditions and population growth as other cities have, Territory home prices have not been as resilient to the substantial interest rate rises that we’ve seen this year.”

Housing price changes, November 2023.

Darwin’s median house value remains at $486,000 - the lowest of any capital city.

Ms Creagh said population growth in the “big cities” contributed to the different outcomes in house prices.

“When we look at Sydney and Melbourne, and to an extent Brisbane as well, we know that those capital cities take the body of overseas migrants,” she said.

“So that’s one reason why we’ve seen rental market conditions tighten and property prices turn around a bit quicker because we’ve seen a stronger, faster pick-up in population growth.”

Ms Creagh suggested the “deposit hurdle” may be reduced but there could be other challenges for Territorian first-home buyers.

“Home prices are cheaper than they were this time last year,” she said.

“So that means the deposit hurdle was maybe reduced a little for some, but at the same time mortgage servicing costs are significantly higher so it’s a bit of a trade off.”

Despite the findings, Raine and Horne general manger Glenn Grantham said he believed Darwin’s real estate sector was set to grow.

“2024 promises greater job availability due to a multitude of infrastructure projects either continuing or coming online,” he said.

“These projects in combination coupled with the significantly higher wages paid in the Northern Territory are anticipated to generate the necessary population growth required to turbocharge real estate market growth in Darwin.”

Mr Grantham said interstate investment might occur if population growth and infrastructure projects coincided.

“What we require are tangible indicators in early 2024 of population growth propelled by the infrastructure boom and investors from southern states will begin purchasing Darwin real estate in larger quantities.”

Originally published as NT home price figures revealed