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.

 Infographic showing median unit price Infographic showing weekly house rent Infographic showing weekly unit rent


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

Greater Darwin

Greater Darwin (Darwin, Darwin suburbs and Palmerston) housing market conditions have begun to flatten, following a period of decline. However, unit prices have continued to decline in trend terms. The median house price in Greater Darwin decreased by 0.5% in the June quarter 2019, but was unchanged in annual terms at $500,000. The median unit price increased by 3.4% in the quarter, however it decreased by 14.9% in annual terms to $325,000.

In annual terms, house prices increased across Darwin and Palmerston, with the exception of Inner Darwin (which declined by 7.1% to $650,000). The annual decline in the median unit price reflected declines across Greater Darwin.

The number of houses sold in Greater Darwin increased by 25% to 205 in the June quarter 2019 and by 5.1% in annual terms (Chart 1). The number of units sold in Greater Darwin increased by 47% in the quarter to 147 and increased by 15.7% in annual terms.

Median weekly asking rents for a house in Greater Darwin decreased by 2.9% in the June quarter 2019, and decreased by 8.3% in annual terms to $442 per week. Median weekly asking rents for a unit in Greater Darwin increased by 1.3% in the quarter but decreased by 10.5% in annual terms to $320 per week (Chart 2). The rental yield for houses and units in Greater Darwin decreased by 0.1 percentage points in annual terms in the June quarter 2019, to 4.6% and 5.1% respectively.

The vacancy rate in Darwin for all dwellings was 6.3% in the June quarter 2019. The vacancy rate for houses in Darwin decreased by 1.4 percentage points to 5.2% in annual terms but increased by 1.4 percentage points to 6.7% for units.

Alice Springs

Caution needs to be used when interpreting quarterly movements for regional markets. The small size of these markets and low number of sales can lead to volatile results.

In Alice Springs, the median house price decreased by 3.3% to $442,000 in the June quarter 2019, and by 6.4% annually. The median weekly asking rent for a house in Alice Springs increased by 1.0% in the quarter, but decreased by 3.8% annually to $510. The number of house sales in Alice Springs decreased by 20.3% to 63 sales in annual terms (Chart 3). The rental yield for a house in Alice Springs increased by 0.2 percentage points to 6.0% in annual terms in the June quarter 2019.

In the June quarter 2019, Alice Springs’ median unit price increased by 0.2% to $325,500 but decreased by 2.3% compared to the June quarter 2018. The median weekly unit rent increased by 2.7% in the quarter to $380, but decreased by 5.0% in annual terms (Chart 4). The sales volume for units increased by 4.2% in the quarter but decreased by 7.4% in annual terms to 25 sales. In the June quarter 2019, the rental yield for a unit was 6.1%, which is a 0.2 percentage point decrease in annual terms.

The vacancy rate for all dwellings in Alice Springs was 3.5% in the June quarter 2019, which is a decrease of 0.4 percentage points compared to the same time in the previous year. This was due to a 0.6 percentage point decrease in unit vacancies to 3.7%, partly offset by a 0.5 percentage point increase in house vacancies to 3.1%.

Katherine

Due to the small number of properties on the market in Katherine median prices for houses and units tend to be highly volatile.

The median house price in Katherine increased by 4.5% to $350,000 in the June quarter 2019, and increased by 8.5% in annual terms (Chart 5). There were 13 houses and three units sold in Katherine in the quarter.

The median house rent increased by 1.2% in the quarter and in annual terms to $425 in the June quarter 2019. Median unit rents decreased by 3.2% in the quarter to $300, and decreased by 14.3% in annual terms. The house rental yield in the June quarter 2019 decreased by 0.5 percentage points in annual terms to 6.3%.

The vacancy rate for all dwellings decreased by 2.6 percentage points to 5.9% in annual terms in the June quarter 2019. The average vacancy rate for houses decreased by 2.7 percentage points 5.5% in annual terms and the average vacancy rate for units decreased by 2.6 percentage points to 7.1%.

Tennant Creek

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 June quarter 2019, the median house price increased by 26.7% in the quarter and by 1.8% annually to $280,000 (Chart 6). There were three houses sold in the quarter.

For further information on residential property prices in the NT go to:

Capital city comparisons

The following capital city comparisons is based on data published by the Real Estate Institute of Australia (REIA).

In the June quarter 2019, Darwin had the second lowest median house price of the capital cities, at $500,000 (down 0.5%). Most capital cities recorded a quarterly decrease in median house prices, with the exception of Hobart (up 7.5%) and Canberra (no change). The eight capital city weighted average median house price was $720,000 in the June quarter 2019, a decrease of 1.0% in the quarter and 5.7% in annual terms.

The Darwin median unit price ($325,000) was ranked the lowest of all capital cities. Elsewhere, prices ranged from $354,900 in Adelaide to $688,700 in Sydney (Chart 7). Darwin (up 3.4%), Melbourne (up 0.6%) and Hobart (up 0.4%) were the only capital cities to record a quarterly increase in median unit prices. The eight capital city weighted average median unit price decreased by 0.6% to $565,800 in the quarter and by 4.5% through the year to June 2019.

In the June quarter 2019, Darwin had the third highest median weekly house rent ($442) and the second lowest median unit rent ($320) of all capital cities (Chart 8). The median weekly asking rent for a house in other capital cities ranged from $340 in Perth to $520 in Canberra. The annual change in median weekly asking rents for houses ranged from an 8.3% decline in Darwin to an increase of 11.4% in Hobart. The median weekly asking rent for a unit in other capital cities ranged from $300 in Adelaide to $540 in Sydney. The annual change in median weekly asking rents for units ranged from a decline of 10.5% in Darwin to an increase of 3.6% in Melbourne.

In the June quarter 2019, Darwin recorded the highest vacancy rate of all capital cities at 6.1%, Elsewhere, vacancy rates ranged from 1.4% in Canberra to 3.3% in Sydney. 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 August 2019, the number of housing commitments (excluding refinancing) decreased by 10.0% to 2,306, which was driven by a 26.8% decline in non‑first home buyers, partly offset by a 31.4% increase in the number of first home buyer commitments (Chart 10). The value of total housing commitments for owner occupation (excluding refinancing) fell by 11.7% to $729 million. Over the same period, the total value of housing finance commitments for investment properties (excluding refinancing) decreased by 27.2%.

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

The following analysis of home loan and rental affordability is based on data published by REIA.

Housing affordability in the NT decreased slightly in the June quarter 2019 with the proportion of income required to meet loan repayments increasing by 0.4 percentage points to 20.6%, however was 4.2 percentage points lower when compared to the same time in the previous year (Chart 11). The average monthly loan repayment for the NT also increased by 2.8% to $1,950 in the June quarter 2019. The NT recorded the lowest proportion of income required to meet home loan repayments of all jurisdictions, equal with the Australian Capital Territory, which elsewhere ranged from 22.4% in Western Australia to 37.1% in New South Wales. Nationally, 31% of income was required to meet home loan repayments.

In the June quarter 2019, the 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%. In annual terms, affordability improved by 2.4 percentage points. The proportion of median weekly income required to meet the median rent in other jurisdictions ranged from 16.4% in Western Australia to 29.9% in Tasmania (Chart 12).

Dwelling supply

Accessibility and affordability of residential property in the NT is highly dependent on 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. This, coupled with lower demand for dwellings, is anticipated to continue to restrain property prices in the NT.

Residential building approvals in the NT decreased by 22.4% in the year to August 2019. This was driven by a 32.4% decline in house approvals to 433 (Chart 13). House approvals have been in decline for the past four years, and are below the ten year average of 732 building approvals per annum, as well as reaching the lowest level on record. The decline in house approvals was partly offset by a 45.5% increase in unit approvals, to 160. Despite the increase, the number of unit approvals remains well below the ten year average of 704 approvals per annum.

For the latest data and analysis about building approvals in the NT, see the Department of Treasury and Finance’s Building approvals economic brief.

In 2018-19, the average number of total residential dwelling completions in the NT increased by 12.7% (or 102) to 903. The increase in dwelling completions was mainly driven by a 128.6% increase in unit completions to 352, which is still below the 10-year average of 681. This was partly offset by declines in new house completions by 15.2% to 534 and in conversions by 5.9% to 16.

The number of new residential buildings under construction decreased by 19.8% in 2018-19, with unit construction decreasing by 24.7% and new houses under construction decreased by 6.2%. In this period, the average number of residential dwellings under construction was 791, which comprised of 527 units and 245 new houses. Construction levels remain below the 10‑year annual average of 1,252 dwellings (Chart 14).

The value of residential building work yet to be done decreased by 17.4% to $689.7 million. This was due to a 24.0% decrease (to $428.5 million) in the value of unit work yet to be done and a 5.2% decrease in the value of houses (to $168.3 million). Alterations and additions work yet to be done decreased by 0.9% to $92.9 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 which covers the following suburbs:

The median house and unit prices and rents for the capital cities are sourced from Real Estate Institute of Australia (REIA), who 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.

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