Since arriving in Darwin in January 2003 I’ve seen Darwin house prices boom. Some property experts say that property typically doubles every seven to ten years but until you actually see it happen, it always seems like such a bold prediction. Yet Darwin prices have more than doubled in that time.
Last year we saw a correction in the market and while property hasn’t come down a lot in price, the market has definitely cooled, to the point that inflation has caught up slightly making the Darwin property market more affordable than it was prior to 2011.
Along with that, last year we had several interest rate drops, with some industry experts tipping at least one more drop on the way. With 1 to 3 year fixed interest rates hovering around 6% currently, that seems reasonable to me, although obviously that’s not for me to say.
So, if you have thought that buying a property has been out of reach, or you were knocked back by your lending institution in the past, now could be a good time to look into it again. Banks lend more to people while interest rates are low as it obviously makes the repayments more affordable. The trick is though to always budget for several rate rises to ensure that you can comfortably afford higher repayments. A professional mortgage broker or lending manager can easily do these calculations for you.
So with our property prices during 2011 flat lining and in some cases dipping, and interest rates as low as I can remember, opportunities start to abound. Darwin’s future has never looked brighter. Now that the Impex deal has been given the final go ahead, I’ve been hearing that it really is just the tip of the ice berg. Darwin is on the verge of becoming one of the largest gas and mining hubs on the planet over the next 10 years.
This will bring well paying jobs and massive government infrastructure to our region, if we can maintain some genuine long term population growth to the region then it’s a sure recipe for strong property price growth. We’ve also seen iconic Darwin company Paspaley announce that they wish to invest in Darwin’s future with the new 84 million dollar Charles Darwin Centre in the middle of the city. Business confidence is back in our part of the world, make no mistake.
If you currently have equity in your home and you have considered property investment as a way to create wealth for your future, I strongly urge you to look at your options; perhaps even make an appointment to see a mortgage broker or your lending manager to see how viable it is. By utilising your equity you may find that becoming a property investor is more achievable than you thought. Even if you decide that property in Darwin doesn’t fit your budget, there are countless opportunities to invest in the southern states where the property market has been flat for some time, and the entry point of quality property is much lower than in the N.T.
As with any investment, there is an element of risk, the European economy is haemorrhaging, and its monetary issues won’t be solved overnight. The Northern Territory is a unique part of Australia in that we continually seem to buck the trend economically. When things are flat in most of Australia our resource sector keeps us insulated. China’s growth is slowing but their appetite for our resources are still massive.
Dick Grant is a Senior Mortgage Broker and Franchise Manager of Aussie Darwin.