A landmark, joint study by Aussie Home Loans and CoreLogic has revealed Darwin house values have risen at an annualised rate of 6.3 per cent or $17,900 since 1999.
At the same rate of growth over the next 25 years, Darwin’s median house value could rise from today’s $496,500 to reach $2,284,000 in 2043.
The Aussie/CoreLogic ’25 years of housing trends’ report found the typical Darwin apartment has risen at an annualised rate of 4.1 per cent or $9,400 over the last 19 years, reaching their current median value of $334,400. In 25 years, the median unit value in Darwin could be $917,000.
Chief Executive Officer of Aussie, Mr James Symond, said “Our report reveals that although property values in Darwin have been falling since 2014, the housing market has actually returned a solid performance over the longer term thanks to high rates of capital gain prior to 2014.
“I expect Darwin will continue to perform well over the long term, given between 2004 and 2007 Darwin house values rose at more than 15 per cent per annum, so it’s definitely got it in it for strong growth.”
The percentage of annual household income in Darwin required to service a loan – at an 80 per cent loan to value ratio – has risen from 19.2 per cent to 22.1 per cent since 2001.
Mr Symond said “With average mortgage rates currently close to their record low levels of the 1960’s, loan serviceability levels have actually improved in recent years, helped by the trend towards lower home prices since 2014.
“However, despite recent price falls, housing affordability remains an issue for some people in Darwin, especially first home buyers.”
The report expects Darwin to increase its housing density as the population grows and urban planning strategies maximise the use of strategically located land and transport corridors.
The report also revealed the top 20 suburbs in Darwin for value growth, with Bakewell the star performer.
Bakewell has experienced extraordinary growth in its median house value from $47,000 to $422,500 - annualised growth of 12.3 per cent which is well above Darwin’s average.
Detached houses have been the primary drivers of the market, with the Top 20 listing featuring only one suburb dominated by apartments; Rosebery at number 20.
“If the changing face of residential property and staggering growth of technology we’ve seen over the last 25 years continues, it’s likely the next 25 years will produce even greater change,” concluded Mr Symond.
To view the full Aussie/CoreLogic 25 years of housing trends report, visit www.aussie.com.au/25years or contact an Aussie Broker for a free copy.