Housing

House prices can be a useful indicator of overall economic activity. This section looks at the analysis of key indicators for the Northern Territory's (NT) residential housing market. This includes the current state and performance of the property market by regions, residential building activity and approvals, house and unit prices, and rental pricing. Analysis on housing affordability based on average incomes, home loans and rentals, and housing-related finance commitments are useful indicators of demand and supply for the NT's property market.

Key facts | Greater Darwin | Alice Springs | Katherine | Tennant Creek | Capital city comparison | Housing finance commitments | Affordability | Dwelling supply | Explanatory notes

Following a peak in new residential construction activity and supply as well as prices and rents in 2013, the NT housing market has weakened substantially over recent years. A range of indicators, such as building approvals, building activity and housing finance approvals, are below long-term averages.

Accessibility and affordability of residential property in the NT is highly dependent on the supply side responses that boost the stock of housing. Over the past few years, there has been a sustained period of above-average supply in the number of new dwellings in the NT, which has dampened prices.

Lower property prices have improved affordability in many areas and, partly as a result, the number of housing commitments by first home buyers has been increasing steadily. This significant improvement in housing and rental affordability enhances the livability of the NT, and highlights housing is no longer acting as a substantial deterrent to interstate residents moving to the NT.

While lower prices have helped improve affordability for first home buyers, housing finance commitments for non-first home buyers have fallen. In a period of falling property prices, likely reasons for such a decline include a decrease in investor-driven activity, a decrease in resident population and an inability of those who bought at the peak of the market to afford to move.

To help stimulate the current residential market, the NT Government has launched a range of home owner incentives, discounts and grants, which can be viewed on the NTG website.

For further information on residential property prices in the NT, visit:

• the Department of Treasury and Finance Property price index economic brief
• Real Estate Institute of Northern Territory to access their quarterly Real Estate Local Market publication .

Key facts

Greater Darwin

In the December quarter 2019:

• the median house price remained at $460,065 but decreased by 6.8% in annual terms
• median unit price increased by 3.7% but decreased by 12.9% in annual terms, to $305,000
• number of houses sold increased by 33.3% to 252 and increased by 11.5% annually (Chart 1)
• number of units sold increased by 2.0% to 156 but decreased by 1.9% annually (Chart 1).

• median weekly asking rents for a house increased by 12.3% and by 2.5% in annual terms to $472 per week
• median weekly asking rents for a unit increased by 4.0% but decreased by 0.6% in annual terms to $338 per week (Chart 2)
• rental yield for houses and units in Greater Darwin increased by 0.5 percentage points and 0.7 percentage points in annual terms, to 5.3% and 5.8%, respectively.

• vacancy rate for dwellings was 7.7%. In annual terms, the vacancy rate for houses decreased by 1.3 percentage points to 5.2% and decreased by 0.3 percentage points to 8.9% for units

Alice Springs

In the December quarter 2019:

• the median house price decreased by 1.1% and by 5.3% annually to $450,000
• median weekly asking rent for a house increased by 2.9% and by 2.9% annually to $535
• number of house sales increased by 3.3% to 63 in annual terms (Chart 3)
• rental yield for a house increased by 0.5 percentage points to 6.2% in annual terms

• median unit price decreased by 6.9% and by 7.0% annually, to $304,500 (Chart 4)
• median weekly unit rent decreased by 4.8% but increased by 2.6% in annual terms to $400 (Chart 4)
• sales volume for units increased by 46.7% and by 15.8% in annual terms to 44 sales. The rental yield for a unit was 6.8%, which is a 0.6 percentage point increase in annual terms
• vacancy rate for all dwellings increased by 0.4 percentage points in annual terms to 4.3%, due to a 1.0 percentage point increase in unit vacancies to 4.3%, partly offset by a 1.1 percentage point decrease in house vacancies to 4.4%

Katherine

In the December quarter 2019:

• the median house price decreased by 7.0% and by 4.6% in annual terms to $297,500 (Chart 5). There were ten houses sold in the quarter
• median house rent increased by 5.9% and by 12.5% in annual terms to $450. The house rental yield increased by 1.2 percentage points in annual terms to 7.9%
• median unit rents increased by 8.2% but was unchanged in annual terms to $330.
• in annual terms, the vacancy rate for all dwellings increased by 5.7 percentage points to 11.0%. The average vacancy rate for houses increased by 6.3 percentage points 11.8% and increased by 4.6 percentage points to 9.4% for units

Tennant Creek

Data is highly volatile due to the lower sales volume as there are only a small number of properties on the market. Consequently, the Real Estate Institute of the Northern Territory does not report sales, rental prices or vacancy rates for units in Tennant Creek.

In the December quarter 2019:

• the median house price increased by 25.0% but decreased by 16.7% annually to $150,000 (Chart 6). There were five houses sold in the quarter.

Capital city comparisons

In the September quarter 2019:

• Darwin had the lowest median house price of the capital cities at $460,000 (Chart 7)
• the eight capital city weighted average median house price was $743,776, an increase of 2.6% and a decrease of 1.1% in annual terms
• Darwin median unit price ($294,000) was ranked the lowest of all capital cities (Chart 7)
• the eight capital city weighted average median unit price increased by 2.6% and decreased by 1.7% in annual terms to $577,135

• Darwin had the fourth highest median weekly house rent ($420) and the second lowest median unit rent ($325) of all capital cities (Chart 8)

• Darwin recorded the highest vacancy rate of all capital cities at 5.9%. Darwin’s vacancy rate is susceptible to fluctuations due to the transient nature of the NT’s population (Chart 9).

Housing finance commitments

In the year to November 2019:

• the number of housing commitments (excluding refinancing) decreased by 12.8% to 2,012, driven by a 27.1% decline in non‑first home buyers, partly offset by a 15.8% increase in the number of first home buyer commitments (Chart 10)
• value of total housing commitments for owner occupation (excluding refinancing) fell by 16.0% to $747 million
• for the latest data and analysis about housing finance commitments in the NT, see the Department of Treasury and Finance’s Housing finance for owner occupation economic brief.

Affordability

In the June quarter 2019:

• housing affordability in the NT decreased with the proportion of income required to meet loan repayments increasing by 0.4 percentage points to 20.6% (Chart 11), as a result of a 2.8% increase in the average loan repayment to $1950
• NT recorded the lowest proportion of income required to meet home loan repayments of all jurisdictions, equal with the Australian Capital Territory

• NT experienced the third largest improvement in rental affordability with the proportion of median weekly family income required to meet median rent of the jurisdictions, decreasing by 0.7 percentage points in the quarter to 20.2% (Chart 12).

Dwelling supply

In the year to December 2019:

• residential building approvals in the NT decreased by 22.4% to 565 approvals, driven by a 30.1% decline in house approvals to 416 (Chart 13), below the 10‑year average of 713 approvals
• unit approvals increased by 26.6% to 138, however below the 10‑year average of 686 approvals
• for the latest data and analysis about building approvals in the NT, see the Department of Treasury and Finance’s economic brief Building approvals.

In the year to September 2019:

• the average number of residential dwelling completions in the NT increased by 12.8% to 883 (Chart 14)
• unit completions fell by 88.2% to 318, new house completions increased by 33.3% to 544 and conversions increased by 50% to 21
• number of new residential buildings under construction decreased by 26.2% to 695, driven by unit construction decreasing by 29.4% to 480 and new house construction decreasing by 18.0% to 215. Construction levels remain below the 10‑year annual average of 1,226 dwellings (Chart 14)

• value of residential building work yet to be done decreased by 17.5% to $687.5 million, driven by a 17.3% decrease (to $448.1 million) in the value of unit work yet to be done and a 24.9% decrease in the value of houses (to $144.2 million). Alterations and additions work yet to be done decreased by 4.0% to $95.3 million
• for the latest data and analysis about residential construction in the NT, see the Department of Treasury and Finance’s Building activity economic brief.

Explanatory notes

NT median house and unit prices and rents are sourced from the Real Estate Institute of the Northern Territory (REINT). REINT groups the regions of Darwin and Palmerston together as Greater Darwin. Darwin is further broken down into zones that cover the following suburbs:

• Inner Darwin: Bayview, Cullen Bay, Darwin City, East Point, Eaton, Fannie Bay, Larrakeyah, Ludmilla, Parap, RAAF Base Darwin, Stuart Park, The Gardens, The Narrows, Tipperary Waters and Woolner
• Darwin North Coastal: Alawa, Brinkin, Casuarina, Coconut Grove, Jingili, Lyons, Milner, Moil, Muirhead, Nakara, Nightcliff, Rapid Creek, Tiwi, Wagaman and Wanguri
• Darwin North East: Berrimah, Marrara and Winnellie
• Darwin East: Coonwarra and Darwin Airport
• Darwin North: Anula, Bagot, Buffalo Creek, Charles Darwin University, Holmes, Karama, Leanyer, Lee Point, Malak, Northlakes, Sanderson, Woodleigh Gardens and Wulagi

• Caution needs to be used when interpreting quarterly movements for regional markets such as Alice Springs, Katherine and Tennant Creek. The small size of these markets and low number of sales can lead to volatile results.
• The median house and unit prices, and rents for the capital cities are sourced from Real Estate Institute of Australia (REIA), which receives data from state and territory Real Estate Institutes. REIA adopts the ABS definitions of ‘houses’ and ‘other dwellings.’ A ‘house is a single self-contained place of residence detached from other buildings. An ‘other dwelling’ is a single self-contained place of residence other than a house such as flats, home units, town houses and terrace houses. However for Sydney the definition of ‘houses’ includes houses, cottages, terraces, semi-detached dwellings, townhouses and villas, and ‘units’ include units, studios and duplexes.
• REIA’s weighted average median prices are derived from the quarterly median prices for all capital cities weighted according to the number of houses and other dwellings for each corresponding city. These numbers are sourced from the ABS 2011 and 2016 Census.
• REIA’s housing affordability data is based on data from lending institutes and the ABS. They define median weekly family income as income from married couples with or without dependent children.
• The ABS building activity survey is compiled using building approval details and returns collected from builders and other individuals, and organisations engaged in building activity. The estimates represent all approved public and private sector residential building activity valued at $10,000 or more and non-residential building activity valued at $50,000 or more. The statistics relate to building activity so construction activity not defined as building such as the construction of roads, bridges, railways and earthworks are found in other ABS publications.
• The ABS publication of housing finance commitments are derived from returns submitted to the Australian Prudential Regulation Authority and covers housing finance commitments statistics from banks and permanent building societies.