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.
Greater Darwin | Alice Springs | Katherine | Tennant Creek | Capital city comparison | Housing finance commitments | Affordability | Dwelling supply | Explanatory notes
Greater Darwin (Darwin, Darwin suburbs and Palmerston) housing market conditions have continued to moderate over the last couple of years following strong growth. The median house price in Greater Darwin decreased by 0.5% in the September quarter 2018, but increased by 0.5% annually to $497,500. The median unit price decreased by 7.7% in the quarter and by 13.0% in annual terms to $352,500.
The annual increase in the median house price was driven a 9.7% increase in Darwin North East and a 1.8% increase in Darwin North. This was partly offset by declines in inner Darwin (down 6.9%), Darwin North Coastal (down 10.6%) and Palmerston (down 2.2%). The annual decline in the median unit price was also driven by declines across all regions in Greater Darwin, with the exception of Darwin North Coastal which increased by 17.7%.
The number of houses sold in Greater Darwin increased by 1.5% to 198 in the September quarter 2018, but decreased by 4.3% in annual terms (Chart 1). The number of units sold in Greater Darwin decreased by 8.7% in the quarter to 116 and declined by 32.2% in annual terms.
Median weekly asking rents for a house in Greater Darwin decreased by 22.6% in the quarter and by 22.1% in annual terms to $373 per week in the September quarter 2018. Median weekly asking rents for a unit in Greater Darwin decreased by 1.8% in the quarter and by 4.1% in annual terms to $351 per week (Chart 2). The rental yield for houses in Greater Darwin has decreased by 1.1 percentage points in annual terms to 3.9% in the September quarter 2018, while the rental yield for units increased by 0.5 percentage points to 5.2%.
The vacancy rate in Darwin for all dwellings was 8.2% in the September quarter 2018. The vacancy rate for houses in Darwin has increased by 0.1 percentage points to 6.7% in September quarter 2018 and by 2.8 percentage points to 8.1% for units.
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 increased by 0.5% to $474,000 in the September quarter 2018, but declined by 0.4% annually. The median weekly asking rent for a house in Alice Springs increased by 1.9% in the quarter and by 4.9% annually to $540. Alice Springs recorded the only annual increase in the median house rent of the regional centres in the NT. The number of house sales in Alice Springs decreased by 16.5% to 66 sales in the September quarter 2018 (Chart 3). The rental yield for a house in Alice Springs increased by 0.3 percentage points in annual terms to 5.9% in the September quarter 2018.
In the September quarter 2018, Alice Springs median unit price decreased by 3.9% to $320,000 but was the same compared to September 2017. The median weekly unit rent decreased by 1.3% in the quarter to $395, but increased by 6.8% compared to the same time in the previous year (Chart 4). The sales volume for units increased by 59.3% in the quarter and by 30.3% in annual terms to 43 sales. In the September quarter 2018, the rental yield for a unit was 6.4%, which is a 0.4 percentage point increase in annual terms.
The vacancy rate for all dwellings in Alice Springs was 3.1% in the September quarter 2018, which is a decrease of 0.7 percentage points compared to the same time in the previous year. This was due to a 2.7 percentage point decline in unit vacancies to 2.9% whilst house vacancies increased by 2.1 percentage points to 3.6%.
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 decreased by 7.0% to $300,000 in the September quarter 2018 and by 3.2% in annual terms (Chart 5). There were 9 houses sold in the quarter, but there were no units sold in Katherine in the quarter.
The median house rent remained at $420 in the September quarter 2018 but declined by 2.3% in annual terms. Median unit rents decreased by 8.6% in the quarter to $320 and by 8.6% in annual terms. The house rental yield in the September quarter 2018 increased by 0.1 percentage points in annual terms to 7.3%.
The vacancy rate for all dwellings increased by 2.1 percentage points to 7.2% in the annual terms in the September quarter 2018. The average vacancy rate for houses increased by 1.7 percentage points 6.9% in the annual terms and the average vacancy rate for units increased by 2.8 percentage points to 7.7%.
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 September quarter 2018, the median house price decreased by 39.5% in the quarter and by 41.2% annually to $166,250 (Chart 6). There were six houses sold in the quarter.
For further information on residential property prices in the NT go to:
The following capital city comparisons is based on data published by the Real Estate Institute of Australia (REIA) and the Adelaide Bank.
In the September quarter 2018, Darwin had the fourth lowest median house price of the capital cities. The median house price declined in Darwin, Sydney, Perth, Hobart and Canberra in the quarter. The eight capital city weighted average median house price was $751,400 in the September quarter 2018, a decrease of 1.6% in the quarter and 1.5% in annual terms.
The Darwin median unit price ($352,500) was ranked the second lowest of all capital cities, which ranged from $344,000 in Adelaide to $734,800 in Sydney (Chart 7). Melbourne (up 0.2%) and Canberra (up 1.8%) 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 0.8% to $588,000 in the quarter and by 0.5% through the year to September 2018.
In the September quarter 2018, Darwin had the second highest median weekly house rent and the fourth lowest median unit rent, of all capital cities (Chart 8). The median weekly asking rent for a house in other capital cities ranged from $330 in Perth to $500 in Sydney and Canberra. The annual change in median weekly asking rents for houses ranged from a 10.0% decline in Darwin to an increase of 10.8% in Hobart. Perth was unchanged through the year to September 2018. The annual change in median weekly asking rents for units ranged from a decline of 4.1% in Darwin to an increase of 9.7% in Hobart.
In the September quarter 2018, Darwin recorded the highest vacancy rate of all capital cities, which ranged from 0.6% in Canberra to 3.9% in Perth. Darwin’s vacancy rate is susceptible to fluctuations due to the transient nature of the NT’s population (Chart 9).
In the year to October 2018, the number of housing commitments (excluding refinancing) decreased by 9.6% to 2,483, which was driven by a 15.6% decline in non-first home buyers, partly offset by an increase in the number of first home buyer commitments (up 8.1%) (Chart 10). The value of total housing commitments (excluding refinancing) fell by 7.5% to $803 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.
The following analysis of home loan and rental affordability is based on data published by REIA and the Adelaide Bank.
Housing affordability in the NT improved slightly in the September quarter 2018 with the proportion of income required to meet loan repayments decreasing by 0.5 percentage points to 21.0 per cent, but is 1.6 percentage points higher when compared to the same time in the previous year (Chart 11). The average monthly loan repayment for the NT was $1,953 in the September quarter 2018. The NT recorded the second lowest proportion of income required to meet home loan repayments of all jurisdictions, which ranged from 20.0% in the Australian Capital Territory to 36.6% in New South Wales. Nationally, 31.0% of income is required to meet home loan repayments.
In the September quarter 2018, the NT experienced the largest decline in rental affordability with the proportion of median weekly family income required to meet median rent of the jurisdictions, decreasing by 2.6 percentage points in the quarter to 20.0% and by 2.7 percentage points in annual terms. The proportion of median weekly income required to meet the median rent in other jurisdictions ranged from 16.1% in Western Australia to 28.5% in New South Wales (Chart 12).
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.
Since the peak in mid‑2014, residential building approvals in the NT have decreased markedly, down 24.4% in the year to October 2018. This was driven by a 13.7% decline in house approvals to 565 and a 68.3% decrease in unit approvals to 58 (Chart 13).
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 2017-18, the annual average number of total residential dwelling completions in the NT decreased by 33.1% (or 394) to 797. The decline in dwelling completions was primarily driven by a 62.6% decline in unit completions to 154. New house completions also declined by 17.5% to 627, below the 10‑year average of 790.
The number of new residential buildings under construction increased by 6.1% in 2017-18, with unit constructions increasing by 15.3%, whilst houses under construction decreased (down 12.8%). Construction levels remain below the 10‑year annual average of 1,245 dwellings (Chart 14). In 2017-18, the annual average number of residential dwellings under construction was 960, which comprised of 700 units and 260 new houses.
In 2017-18, the value of residential building work yet to be done increased by 8.0% to $812 million. This was due to an 18.2% increase (to $549.8 million) in the value of unit work yet to be done, partially offset by a 14.8% decline in the value of houses (to $171.2 million). Alterations and additions work yet to be done increased by 6.0% to $90.8 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.
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.