National Property Report – May 2014

New South Wales

A million dollars doesn’t buy what it used to

There was a time when imagining a million-dollar property conjured up images of grandeur, but these days a million dollars buys nothing of the sort.

Sydney now has 163 suburbs, or 20% of the market, with a median price of $1m. Last year alone, an additional 43 suburbs earned their stripes in terms of value and were given membership of the million-dollar club.

Areas like Point Piper were always  going to be on the million-dollar list, along with Vaucluse and Mosman – no big surprises there, but what may come as a shock are some of the other areas graduating towards a million-dollar price tag.

Former trouble-plagued Redfern is just a step away with a current median price of $921,500, while Inner West suburbs like Burwood and Matraville have already hit the mark.   Twenty years ago these suburbs were not even a blip on a millionaire’s diamond-studded radar, and yet today the Inner West is leading the charge down millionaire’s row, with 12 new suburbs hitting a million-dollar median price in 2013.

Even surrounding suburbs like Strathfield and Concord West have exceeded the million-dollar median. So while a million-dollar property once evoked visions of Vivien Leigh draped over a grand bannister, these days a single-fronted terrace with a lovely concrete vista, located between two ethnic restaurants in Burwood, is a more realistic dream.

But the upside of so many new suburbs progressively emerging as million-dollar areas is the exponential drive it is providing the Sydney market. It is no surprise that with this many suburbs boasting price tags over $1m, Sydney is predicted to be the best performer in the country for the year ahead.

The shape of things to come

What does all this mean for investors? After all, many of us cannot afford investments with a million-dollar price tag.

As values rise in these areas, the value of property across the broader Sydney area is pulled up along with it.

According to National Australia Bank’s Quarterly Residential Property Survey released in February, there are a host of Sydney suburbs, some fairly unexpected, that are tipped to outperform in the year to come.

With a 6% increase expected for Sydney as a whole, new predicted growth suburbs include Marrickville and Dulwich Hill, both located in the Inner West, as well as Surry Hills, Rosebery and even some western suburbs including Penrith, Liverpool and Blacktown.

These western, and even outer western suburbs, are low priced and easy for the beginner investor to break their teeth on. For example, at Blacktown you can buy a unit for around $390,000 with a rental yield of 6%.   While these areas are a decent trek from the CBD, keep in mind just how much things can change. There was a time, not decades ago, when Redfern was considered not for the faint of heart, but it is now considered a vibrant cultural area pushing the $1m mark.

Investor’s paradise south of Sydney

For investors keen on finding a good return outside of Sydney, there are many bargains to be had, and some of these can be found in the Illawarra region, according to experts.   A recent report by Herron Todd White revealed an expectation that the area will continue performing after already hitting the ground running this year on the back of a strong 2013.

Last year the area enjoyed increased home values, up by 3.2%, and unit value increases of 4.6%, with the median price of a three-bedroom home $370,000 and a two-bedroom unit $308,000.

The report states that major infrastructure such as GPT’s new Wollongong CBD shopping centre in West Keira and the Shellharbour Marina will be beneficial to employment prospects in the area and keep investors in the market.

“This will be felt principally in off-the-plan sales of new units in and around the CBD, and vacant land in Shell Cove and Flinders,” it says.

The report also states that government rebates offered for purchasing vacant blocks and building or buying new homes will also see large subdivisions, such as Brooks Reach Horsley, continue to grow and keep developers playing a positive role in the market.   A growing population has also been identified as a driver, and the Illawarra region shows an average population growth of 0.7% per year, which is translating to property sales.

According to a report by RP Data, statistics show a 13.8% increase in home sales last year, with 9,479 sales throughout the period.

“Sales volumes have not been this high since the start of 2010, and annual sales volumes have been increasing since April 2013,” the report states.

Rental yields are also on the rise in Illawarra, with houses showing a 3% increase over 2013 and unit rental yields remaining stable at 5.1%.

Meanwhile, a unit in Wollongong’s CBD will cost an investor about $390,000 and offer a rental yield of 5%, while outside the city the median price of homes around the beach suburb of Shellharbour is $513,000, offering a rental yield of 5%.

Victoria

Has Melbourne’s growth become unsustainable?

Melbourne’s expected strong growth during the next 12 months is now raising some concerns about its sustainability

The definition of ‘unsustainable’ according to the Oxford Dictionary is: “not able to be maintained at the current rate or level”. According to some experts, another definition that comes to mind is the Melbourne property market.

After enjoying a strong market economy in 2013 throughout both Melbourne and regional Victoria, some experts are now predicting a price decline across the greater Melbourne area towards the latter half of this year.

However, not all agree. There is divided opinion on the Melbourne market among experts, and only time will tell which outlook is correct. BIS Shrapnel managing director Robert Mellor believes oversaturation of inner-city apartments and an excess supply of homes within the greater Melbourne area will create a drop-off in the market in 2014.

“By our calculations we think there’s an excess supply of dwellings in the Melbourne market, that’s heavily weighted to inner-city apartments in Docklands, Southbank and the CBD,” Mellor explains.

But RP Data’s Victoria housing market specialist, Robert Larocca, firmly disagrees. “There is no oversupply of homes on the market in Melbourne,” he states.

“Compared to this time last year, there are fewer homes on the market and there is no surge of new listings. Sales transactions have also been rising over the last year.”

In the month ending 16 February, RP Data tracked 7,789 new listings – less than this time last year by 0.7% – and the total number of homes on the market was 31,199, 7% fewer than a year ago.

“Prices may be at a new peak in nominal terms but they are still below peak in real terms, indicating there is still scope for sustainable growth in values,” Larocca says.

“Sustainable and lasting growth in the market relies of course on the economy, and rises in unemployment will act to moderate the property market, but not so much as to result in falls in prices at this point.”

Southbank and Docklands oversupply tipped to crash development

At the end of 2012, 56,000 apartments were constructed in the combined inner-city precinct, including Southbank and Docklands.

Mellor says that within the 2012/13 period an additional 5,700 apartments were completed and he predicts an additional 6,000 p.a. to be constructed within the 2014/15 and 2015/16 periods, equating to a 40% increase in apartments within four years.

“So in effect you’re adding 40% to stock over a four-year period,” he explains. “That’s big given you are typically adding 2% for your stock of dwellings across an entire state.

I just don’t see the demand and I don’t think there’s going to be a sufficient shift in the demand pattern – that is, occupier pattern – to absorb that level of supply.”

Based on these numbers Mellor predicts vacancy rates within the CBD, Southbank and Docklands precincts will increase significantly by the second half of this year, and by 2015/16 he expects a vacancy rate of at least 10%.

Mellor also argues that at some point the need for pre-commencement sales will cause a collapse in construction.

“With many developers in the Melbourne market selling off the plan, primarily in Asian and other overseas countries, some could take the view that foreign investors can afford to take a long-term view on their investment, but at some point the next round of projects will struggle to get support because investors will start to feel burned,” he says.

Queensland

Is Queensland finally catching up?

After years in the doldrums, Brisbane’s market is on the rise again, with its booming apartment sector leading the way

Picture if you will a balmy Brisbane night around a BBQ. With tantalising cooking smells in the air and a few glasses of wine in hand, the conversation turns to the topic of the property market in Queensland and, in particular, the capital city.

Not long ago, that conversation would have been pretty negative, says Lachlan Walker from Place Advisory. Local consumer sentiment was sitting low and property investors tended to come from out of state, or even from outside of Australia.

But now there has been a big sea change and Queenlanders are returning to the local market, according to Walker.

“Locals are back buying property here again,” he says. “So much of the conversation around the BBQ is very positive about Brisbane property these days. This is a good indicator for the state of the market.”

The RP Data-Rismark February Hedonic Home Value Index results show just a 0.6% growth in dwelling values over the last quarter, but anecdotally there is a rising tide of enthusiasm surrounding the market.

Walker says the Brisbane market is in an interesting place at the moment, thanks to the combination of affordable prices and investor opportunities. With the city offering house prices 59% cheaper and apartment prices 47% lower than in Sydney, it seems little wonder that his organisation has seen enquiry levels double recently.

This situation has inevitably prompted increasing interest in the market, and from investors, which should drive the market over the next 18 months to two years.

While Walker estimates that actual sales volumes are still about 50% of where they were when the market was at its last peak, traditionally as enquiries increase they are followed by an increase in sales.

As the Brisbane market has lagged behind other capital city markets for some while, this makes for exciting times, he says. “The increased demand will eventually lead to price growth. I don’t think it will be massive in the next 12 months – maybe 4–5%. But after that it will grow considerably, and might even hit 7–8%.”

Booming apartment sector

Perhaps the most interesting current market trend is the strength of Brisbane’s apartment sector.

Place’s inner-Brisbane apartment market report for the December 2013 quarter recorded the highest level of quarterly unconditional sales since June 2002 – 1,011 transactions were recorded in the final quarter of 2013, which equates to almost 80 off-the-plan sales per week over the period.

Walker says they expect to see a further increase in sales volumes across the residential market.

“We expect to see steady but tight price growth in 2014 as apartment prices begin the ‘catch-up’ to their Sydney and Melbourne counterparts.”

This situation gives weight to recent predictions that Brisbane is the market to watch in 2014 and in the years to come, he adds. Recent research from Colliers International – which projects 2,500 new apartment sales for 2014, a 10% increase on last year – backs this assessment up.

Andrew Roubicek, from Colliers International, says local buyers have started to recognise Brisbane’s current value, especially when compared to Sydney and Melbourne, and take advantage of it.

Affordability, low vacancy rates and attractive yields are also leading growing numbers of interstate buyers to invest in the city.

“With more buyers in the inner Brisbane market than has been experienced for some time,” Roubicek says, “the pent up demand is putting pressure on available stock, particularly in the CBD, which currently has the biggest supply shortage.”

As a result of this trend, prices of new apartments are expected to rise by about 7% over the year across the inner-city area. However, the vacancy rate is likely to remain at around 1% over the same period.

Hotspot predictions

There are a number of Brisbane hotspots that should be of particular interest to investors, according to Roubicek. While Toowong, Cannon Hill and the Brisbane CBD all have a limited supply of new dwellings, Toowong is his top pick.

One of Brisbane’s most tightly held suburbs, Toowong appeals to investors and owner-occupiers due to its proximity to the CBD and access to major infrastructure.

Further, the Toowong Village retail precinct is about to undergo a $50m refurbishment, which will boost the local economy and attract workers to the area.

Western Australia

Still running strong

Despite the negative news about the mining industry, WA is still poised to deliver solid returns for investors

According to experts, rental yields and property values have softened in some of WA’s mining towns, but it’s not all bad news for investors.

For those in the know, WA’s mining downturn is a natural cycle of the resources sector, but for those who don’t understand why mining towns are no longer providing massive rental yields, here it is: most of the mines are reaching the end of the construction phase, meaning they are built and ready to start production. Put simply, this means less workers are needed in remote areas, so rental demand falls and exorbitant yields go with them.

A good example of this is the $13bn Woodside Pluto LNG project located 190km northwest of Karratha. With sale agreements for the supply of gas to Kansai Electric and Tokyo Gas, the project provided 15,000 jobs during the construction phase and required accommodation camps for up to 6,000 workers. Now in the production phase, it is understood the project currently employs about 5,000 workers.

So while many property investors have enjoyed riding the wave of WA’s construction years, unfortunately highs are too often followed by lows, and in this case the low will likely present itself as a significant fall in property values and rental yields.

Local agents say that, despite the natural downturn, investors who bought in mining towns like Port Hedland, the Pilbara and Karratha will continue to enjoy positive rental yields, but investors who leveraged returns of 12% or higher during the boom could be in some trouble.

Rob Sleator, CEO and licensee of Pilbara Real Estate, says investors need to be aware that at some point the ‘boom’ will come crashing down.

“People are still getting really good rents here, and three years ago 80% of our clients were investors and they were getting decent money,” he says.

Now some of his clients are experiencing current rental decreases of up to $2,000 per month.

“Remaining rental amounts are still in the vicinity of $1,200 per week, though, on properties with price tags of around $700,000 plus,” he says.

“These investors might have paid top dollar, but they still have a positively geared property at the moment, despite the decline in rents.

“But what happened is a lot of investors relied heavily on this income and used it to leverage other properties, and now there’s been a gross realisation that at some point things have to come back.”

New opportunities

Released in February, the Western Australian Business Outlook report predicts the slowing of construction in WA will result in “employment plummeting in comparison to the ‘boom’ of recent years, in particular 2012”.

No surprises there, but while experts wail and holler that the ‘boom’ is over, the outlook for investors is not all doom and gloom, according to the report. It states that if WA can manage an economy transitioning from construction to production, there could be an opportunity for other sectors to emerge.

While a weakening economic outlook for short-term growth is predicted, it is also thought that this could be counteracted by medium-term forecasts for gross state product (GSP) that remain above the Australian trend, with a quick rebound of about 4% predicted. This would then allow WA to retain its mantle of Australia’s fastest-growing state over the next decade.

Property developers take notice

Of interest to investors should be the report’s view that other sectors may soon have the opportunity to step out from what has primarily been a looming shadow cast by the gargantuan resources sector.

In recent years the WA economy has been defined by the state’s production of iron ore for Asian markets and by demands on the mining sector, but as construction in the resources sector begins to slow, the market beginning to poke its head out into the sun seems to be property development.

“While most of the state’s economy is looking soft or at risk of softening, the state’s housing construction sector is zigging at the time those other big drivers of growth are zagging,” it states.

In fact, research shows that 2013 recorded the highest number of new private housing approvals since 2006, and the report states that “it looks as if 2014 may be the peak year for the current housing construction cycle, but we see good gains extending into 2015 and 2016 as well”.

South Australia

Slow but steady growth

Adelaide is unlikely to ever display the dramatic highs of other capital city markets, but its slowly growing market is getting healthier – and proving more attractive to investors

Rapid change is not a hallmark of the Adelaide property market. Rather, much like the gradual fall of sand through an hourglass, change occurs at an incremental pace.

As a result, it can sometimes seem as if not a whole lot is happening, let alone changing, in the market. For example, it looks like recent predictions that SA is finally beginning to grow will be difficult to sustain in the face of the 0.2% growth recorded for this market in the latest RP Data-Rismark Hedonic Home Value Index results.

However, according to Real Estate Institute of SA (REISA) president Ted Piteo, the Adelaide market ended last year on a positive note with strong indications that the upswing would continue into 2014. There was a rise from $395,500 to $403,650 in Adelaide’s median house price over the 12-month comparison period, he says.

“This is the first time in almost three years that the median price has crossed the $400,000 threshold. This is a great result, particularly when coupled with the increase in the volume of sales over the December quarter,” he says.

The increase in volume of sales indicates that more buyers are starting to enter SA’s capital city market.

A further positive indicator is the fact there was also a 15-day decrease in the time properties spent on the market, plus a nearly 1% lower vendor discount on advertised prices.

Piteo believes these indicators mean consumer confidence is improving and Adelaide’s market is bouncing back to a healthier state.

His upbeat assessment of the market’s status is supported further by the latest Herron Todd White report. It emphasises that throughout 2013 the market saw improving conditions. These included growing sales interest and activity, a reduction in the number of days on the market, and even some minor price improvements.

The improving conditions have largely been driven by investors returning to the market due to numerous factors in their favour, such as low vacancy rates, steady rental rates, ongoing low interest rates, and comparatively affordable property prices.

According to the report, the market is also likely to appear increasingly attractive as it is believed to have now reached the bottom of its cycle and is starting to show signs of capital growth.

Just to add to the slow-grow mix, the latest RP Data-Rismark February Hedonic Home Value Index results show that, yet again, Adelaide remains the most affordable of the mainland capital cities, with a median dwelling price of $396,550. The attractions of this ongoing affordability should increase investor interest in the market.

Stamp duty no. 1 issue for buyers

Indeed it seems that the perceived need for a reduction in stamp duty is the biggest issue for SA property buyers.

A recent REISA survey found that, while stamp duty has long been ranked number one in the issue stakes, dissatisfaction with it has now reached almost double that surrounding issues like housing affordability and land tax.

Stamp duty on Adelaide’s latest median house price is currently $16,730, plus $2,989 for an LTO transfer fee.

REISA CEO Greg Troughton says that since 2000 the median house price has risen from $136,000 to $403,650, an increase of 200%. Over the same period, stamp duty on the median house price has risen from $4,270 to $16,730, an increase of 291%.

Stamp duty reform is necessary because it is inequitable and is impeding the ability of people to buy and invest in property, he says. “Stamp duty thresholds and rates should be reviewed annually to better reflect market conditions.”

No longer most liveable

Meanwhile, Adelaide recently lost its top spot as Australia’s most liveable city, in the Property Council of Australia’s annual ‘liveability’ survey.

After four years at number one, the SA capital (with a score of 63.9) was relegated to number two this year, largely due to increasing pessimism about local economic and employment opportunities. Survey participants were also unhappy with the state government and the public transport system.

Richard Angrove, from the SA division of the Property Council, says there is an urgent need for active tax reform, job growth, population growth and a revised infrastructure strategy. The survey results are a call to action for both the government and the opposition, he says.

Tasmania

Time is ripe for reform

While there is more positive news for the property market, industry confidence seems a bit shaky. But government and economic reform could be the answer

Much like the first fragile flowers of spring struggling to emerge from the cold ground, signs of recovery in the Tasmanian market continue to slowly break through the confines of a still chilly economy.

According to the RP Data-Rismark February Hedonic Home Value Index results, Hobart was one of the bestperforming capital cities, with growth in dwelling values of 7.7%. For the month of February, Hobart joined Sydney and Darwin as the only cities to record positive growth.

This is good news indeed for Hobart’s market. The hope now is that the ongoing recovery of the Apple Isle’s capital city market will start to trickle down to broader Tasmania.

Unfortunately, elections – shrouded in uncertainty as they are – have a way of slowing much around them down to a standstill. And Tasmania’s state government election on March 15 has done just that.

The resulting climate of uncertainty is one possible reason for the slight fall in industry confidence revealed in the latest survey by the Tasmanian wing of the Property Council. Executive director Mary Massina of the Property Council (Tasmania) says the survey tends to be a good test of where decision-makers in the industry are sitting. That in turn provides an insight into how well the broader economy is perceived to be running.

However, the survey result seems surprising given the current signs of recovery in both the housing and office markets. Massina believes it is a reflection of the importance of the election to both the property industry and the property market, and their future.

Reform necessary for economy

There are some key, but long-neglected, policy areas the new government needs to commit to addressing in order to ensure long-term growth of the property sector, Massina says. “Government action is action necessary to reinforce the signs of economic recovery.”

First and foremost, there is an urgent need to generate employment and ensure external investment in Tasmania, she continues. “Further investment is crucial to galvanize ongoing job creation and population growth. This will ensure demand for property grows too.”

Both tax reform and reform of the planning system are also necessary to encourage investment and development in the state and its economy. With two tiers of government and 29 local councils plus other authorities, there is simply too much red and green tape – and associated costs – for many potential investors.

Massina believes there is a very innovative streak running through Tasmanian society and culture, but that is not currently reflected at a government level. “The system is old, staid and afraid to embrace the new. It needs to be more nimble and flexible, and costs need to be lower in order for Tasmania to compete against bigger, more robust markets.”

New developments

Massina is hopeful that the latest government will shape reform and drive relevant change, but in the meantime she is focusing on some of the developments underway. These include the Parliament Square redevelopment, a big new hotel on the Hobart waterfront, and a hotel development at the Museum of Old and New Art.

She adds that over the next three years there is a clear pipeline of exciting inner-city developments in Hobart, although it would be good to see such developments – and their economic benefits – more widespread across Tasmania.

“If the market continues to improve, and if policy initiatives by the new government lift some of the current key barriers to development, that would be great. There is so much untapped potential and opportunity in Tasmania. And it rewards investors: if the economy recovers there is no reason to believe that investors will not make excellent returns.”

Suburbs to watch

Meanwhile, the latest Herron Todd White report offers a range of suburb suggestions for investors who are interested in Tasmania’s property market but don’t qualify for the state’s generous First Home Builder Boost.

In Hobart, the report recommends the suburbs of Kingston, Lindisfarne and Glenorchy. All three suburbs are within a 6–12km radius of the CBD. Median house prices for properties that fit the second home buyer profile (four bedrooms with two bathrooms) are at around $340,000 upwards.

In Launceston, the report recommends the suburbs of Prospect, Legana and Newnham. While located slightly further out from the city centre, they all offer median house prices of between $350,000 and $450,000 for four-bedroom, two-bathroom residences.

Australian Capital Territory

Can the ACT market be resuscitated?

Those who enjoy medical TV dramas will be familiar with doctors jolting a dying patient back to life with a defibrillator. But what does that have to do with the Canberra property market?

Well, like the doctor’s life-saving defibrillator, the release of this month’s Federal Budget could act as a regenerating force for the area’s property market, according to experts. In the meantime there seems to be mixed opinion as to whether to invest in the ACT market, or to wait.

According to RP Data senior research analyst Cameron Kusher, many potential buyers and vendors are in a state of flux, and who could blame them? With 12,500 proposed jobs cuts within the public sector, there is good reason to be wary.

But other experts believe the ACT has enough going for it that, regardless of the upcoming Federal Budget’s contents, the market will still offer investors a good bang for their buck.

For investors on the wary side, Kusher says until the budget is released and job cuts to the public sector are announced, the market will remain unsteady.

“Because the Federal Government flagged reductions in the size of the public sector but made no firm announcements, uncertainty has weighed quite heavily on the Canberra housing market. … If job cuts aren’t overly severe we would expect there would be a level of pent-up demand in the market which may be unleashed over the second half of 2014. Until such time …. it is difficult to determine the likely market direction for Canberra.”

Then there is the other point of view. Real Estate Institute of ACT CEO RJ Bell says there is still a positive view to take of the current market, regardless of the impending budget release. “Irrespective of the government’s desire to continue reducing the public sector, more than 50 senior bureaucrats have been approved to be hired since October of last year, and a further 430 non-executive positions have also been approved. So, it all doesn’t seem to be heading for a serious crash in Canberra’s employment base,” he says.

He believes it is also important to consider the age of public sector workers in the area. “When looking at the age of public servants we find that, in 2012, 15%, or 11,400, of ACT-based employees were aged 55-plus and, if they follow history, a great number will retire taking redundancy packages and consulting a couple of days a week, providing a very good piggy bank. Hopefully they will consider investment properties in the area.”

There are two other things to bear in mind: affordability and popularity.

The ACT is at the top of Australia’s affordability index for housing, at 29.8%. This compares to about 36% for Sydney, 25.4% for WA and 28.4% for the NT. That means market activity for first home buyers and investors. For example, in Crace you can pick up a brand new four-bedroom, two bathroom home with two-car garage within 10 minutes’ drive from the CBD for $599,000. For investors the rental yield is about 4%, with 12-month growth of 6% and a vacancy rate of 0%.

And it seems Canberra is also a popular place to live. In a recent annual survey of 5,400 people across 10 cities, Canberra was ranked Australia’s most liveable city. It also took the silver gong for healthcare services, cleanliness, design, roads, and employment and economic opportunities.

Northern Territory

Boom slows, but goes on

Recent market data suggests Darwin’s boom times might be slowing, but others paint a more positive picture of the NT’s capital city market

Feverish migration and related activity, followed by an inevitable slowdown in all areas, are the traditional hallmarks of a gold rush. Thanks to the NT’s resources boom, the last few years in Darwin’s property market have certainly displayed the supercharged characteristics of a rush.

Now, after several years of boom-time excitement, it could be argued that a slowdown might be getting underway.

According to the latest RP Data- Rismark February Hedonic Home Value Index results, Darwin was the weakest-performing capital city over the three months to January 2014, with a change in dwelling values of -1.2%.

In the Property Council of Australia’s recent annual ‘liveability’ survey, Darwin was once again rated the least liveable city in the county. This was in large part due to poor performance on housing affordability measures.

However, Real Estate Institute of NT CEO Quentin Kilian says the market remains buoyant and vibrant.

“It is a bit of a volatile market, but all the signs point upwards… I don’t see things dying off for quite some time.”

While the December 2013 quarter saw the highest volume of house sales since December 2009, units are now outselling houses in volume. This is largely due to the ongoing buyer and tenant preference for one-bedroom units, which should continue to dominate the market.

Darwin has a particularly young and mobile population, which is growing rapidly as increasing numbers of people move to the NT looking for work. This tenant pool doesn’t want three- to four-bedroom houses, which means that one-bedroom units remain the best type of property to invest in, Kilian says.

Further, the RP Data index results confirm that Darwin continues to record the highest rental yields of any capital city for both houses and units, at 6.1% and 6% respectively.

Kilian believes these high rental yields are unlikely to diminish due to the very limited availability of both land and stock in Darwin.

“Investors are the only big winners out of this situation. While there is an undersupply of stock, rental yields will remain high,” he says.

Given the current level of economic activity and population growth, which has been predicted to be as much as 7–8%, Kilian says the situation in the capital city should remain unchanged in the foreseeable future.

“The reality is that Darwin is a growing city. Development of onshore mining activity – like fracking – will ensure that population growth doesn’t drop off,” he says.

“So there will continue to be a steady supply of people arriving in town at a time when there is an ongoing undersupply of stock.”

An increase in available stock, along with a stabilisation of the extreme price growth the city has seen, would be good, Kilian adds.

“We want to see continued growth in prices, but the market needs to grow at a more organic, sustainable and manageable pace.”

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