NT Darwin Crash - Why are the asking prices still High?

Trying to organise a meetup in Darwin if anyone is interested?

NT - Any takers for a Darwin meetup?

 

Category: | NT News

Hopefully signs of things to come

 

I wish you were right, but i dont think were out of the woods yet.

I think this is a case of having the right property with a very low reserve and the agent marketing the hell out of it post sale to drum up the market. 750k in nightcliff is In The relm of believable. Remeber, these were 800k plus a few months back.

The NT news is notorious for this crap.

The ABC had a REA on the other day saying she's had 5 foreclosures recently. The only ones she's ever had in 10 years.

Listings are still increasing and 3 br apartments are now available under 400k and vacancy rates are 5 to 8 percent depending on who you ask...

I think we have a while to go. Happy to be proven wrong though...

 

I'm no where near experienced enough to be giving you guidance on the future of the market.

I suspect we've got a while to go...but who knows?

I started charting the listings when I decided my family needed our own house. I figured if I was going to spend lots of $s I should know what's going on first...

Anyway, you're welcome to these charts if you want. Just PM me and I'll give you access.

Add them to your arsenal, and hopefully theyll help you make your own decision?

 

Cheers mate appreciate the offer.

Keep us posted if you hear of any developments of interest.

 

Hey hammer and co, I found this thread months ago when it was active and lurked on it because I found the discussion interesting. I thought I should finally sign up here and see if I could poke the discussion a little and see what your respective thoughts are almost 6 months later?

I have zilch experience with property, but am hoping to start the property journey by the end of next year. From talking with friends in my network there are very mixed views of how much longer people feel the market will drop, but the general consensus is that we haven't reached the bottom yet.

Have you bought in yet hammer?

 

Hi, I would be very keen on hearing how things went too as I've also been following it. I have a couple of friends trying to sell there, but without luck. One of the properties has been vacant for almost a year.

 

Haven't bought yet. Been Gazumped a couple of times...but have been lowballing and surprised at the takeup rate. However I am not buying primarily as an investment. I'm taking the novel approach of buying a house to live in.

As an investor though....you would be brave buying into Darwin at the moment. The market is still dropping rapidly. I'm seeing 2br apartments come online now for 250k (were 410k), and 3x1 houses for 420k (were 550).

Elevated houses still command a premium, probably always will.

The elephant in the room is still the inpex project. You'll see hundreds of busses in the morning carting workers to and from the site. Everyone seems to know someone involved in it. It feels like it is the only thing propping up the economy and now we have some stats that seem to back that up.

If you look at the latest comsec "state of the states" report you'll see that the NT economy is not doing great....except for "construction" which is off the charts. "Construction" basically means inpex, and the 36 billion dollar inpex is due to finish in a year or two.

https://www.commsec.com.au/content/dam/EN/ResearchNews/NT_State_of_the_States_July2016.pdf

So with all that said...Here's my crystal ball prediction....(as in best guess...)..

The market will pick up after the election as Labour will bring back a 28k first home buyer's grant.
There's a few hundred first home buyers out there, so that will give things a big boost for a while. Then after a year or so, things will start winding back again, with a huge drop as inpex finishes up as everyone realises what has happened....

Once Inpex finishes, you're looking at a huge spike in the vacancy rate. As the majority of the 8000 workers leave, and a corresponding drop in house prices.

So, @Luka if I was your friend, I'd be pricing and staging their property to appeal to a first home-buyer. Once that grant is reintroduced right after the election will be the only time to sell for quite a while.

But hey, this is only my take on things. Someone else might have another opinion.

Also worth mentioning that things can change quickly up here, One announcement, a new policy, an even more ******** state government or a new industry and things will go nuts again. It's volatile.

 

Property prices in Australia are stabilised towards crazy high prices by a number of factors.

1) artificially restricting supply of land to the people by councils, state Goverment, and developers who are in bed with each other with the singular aim of maximising profit who cares about the cost to society.

2) artificially restricting supply of money to the people by having an expensive intermediary in the banks who makes about 45% profit from every dollar taken from the Goverment, deposits or loans from other international banks via the fractional banking system. The bank takes $100 dollars from the Goverment at 1.5% lends out $900 dollars of virtual money out to home buyers at 5.5%. Money created out of thin air and who cares about the inflation effect on society amongst the other ills.

3) artificially holding up and inflating house prices by not allowing fixed interest for 30 year periods which keeps people scared of future high interest rate fluctuations, thus making them greedily exploit their neighbour, combined with the law which never makes the bank responsible for its poor business decisions. If you default on mortgage the banks take the house, sell it and recover their money plus keep all the interest you already paid thus even when a mortgagee is repossessed it's still a profitable business for the banks because the courts enforce debt slavery in Australia. You are always responsible for the debt and with interest that has been added you are always in the loss making position when selling prices stop climbing.

4) real estate agent monopoly, if you try sell your house too cheap or too expensive, in a price range that is outside of the range agreed by the association at any given time, then they will not accept the sale or will mess you around. When their sales are slow and they need their salaries, but there is a market to buy but no properties available to them, then they will move bad tenants into your property or keep it vacant so that you are forced to sell and they will start gently and slowly dropping or raising prices depending on the situation so that they always have a salary. If an agent starts lowering prices too much they kick him out of the association and don't allow him access to domain or realestate.com

5) stupid buyers. Those who believe all the propaganda subsidised heavily by the banks, developers, government and the real estate agents plied every day into the heads of the young, mum and dad investors and so forth, using the commercial media, forums and magazines like the property investor, plus the banks. The stupid buyer walks into a property and does not see the real value of something and as a result we have stupid crazy high prices of poor quality housing stock filled with angry and frustrated tenants or homeowners who can't use their money to get the country moving in other ways.


That's why prices are high. That's why they don't drop. It's a rigged game it's not a free market. It's equivalent to some communist country manipulating the market so that it can't operate freely.

 

Hey, did you read the thread? I agree the game can be rigged but i gotta say that prices DO drop. I started this thread very naive about a year ago. Since then, prices have plummeted.

 

Yes I agree I must clarify my point.

Craigie is the best indicator for Perth property Prices. It's the median suburb for Perth. Any suburb north of the river that's better than Craigie but will have positive growth. Any suburb that's worse then Craigie will have negative growth. Craigie has a designation as a coastal suburb opinion as its west of the freeway but not west of west coast highway, if it was it would be a beachside suburb.

In 2002 you could buy a block with a 25 year old house on it in Craigie WA for $110 k. In 2004 that same old rubbish house was $250k. Then in late 2007 the house was worth $440k. Then the crash happened and the property was worth $390k, until JULIA Gillard gave the banks free printed money which has resulted in this debt crippling the country and handed out FHOG at $14k and $21k for new builds. The same old rubbish house went up to $430k again. Now it's sitting there at the same price. Rents have gone up from $200 a week to $450 a week.

In a increasing property price market all the suburbs south of Craigie are growing at a faster rate than Craigie is. In a decreasing property price market they are generally dropping at a greater rate than Craigie as they would tend to be overpriced.

Now this is my point, there are less jobs in Perth right now then there were in 2004, there are less people in Perth then there were in 2008 and the govt debt is 30 billion higher. But rents and property prices have not dropped to 2004 levels which would happen if the game was not rigged. It's not a free market. Never invest with a banks money in a rigged game. It's their game.

 

Thanks for the detailed reply, it's really good food for thought and I appreciate it even if I'm three months late with my response. I may have forgotten to check back until now...

I'm in a similar boat to you, wanting to buy something up here to own and live in - what a novel concept! I'm still still a few years off jumping in, and you're right the first home buyers grant will maintain prices a bit for now, but it'll be very interesting to see how it all plays out.

The upside is I'm currently renting, and the lease is up soon so I'll get to move to somewhere bigger and cheaper than where I am now, definitely a renters market.

Do you have any thoughts on the rural area? The more I consider the future the more I think 5+ acres at Howard Springs/Girraween is a pretty safe bet for comparable money to a northern suburbs property. Especially when the City of Palmerston seems to be attempting to establish itself as a better proposition to Darwin when it comes to some infrastructure and the likes of the Gateway shopping centre nearing completion.

 

I broke all the rules and bought. A Deal of the century came up, and I took it.

I still stand by if you can wait another year, I would do so. But in the meantime make sure all your ducks are in a row so you can pounce when your deal of a century comes up.

If you do buy, mitigate risk by buying cheap. The lower the price the lower the risk. There is no point paying the asking price now. there are no buyers, you will be in the box seat.

Also I found that in this market you may as well buy something renovated. Costs about the same as something that needs work and makes it easier re finance and cashflow.

Rural is a solid plan! However I'd be looking at Marlow's or Virginia. Occasionally really cheap properties come up. These are close enough to Palmerston to be prime subdivision when the time comes.

Anyway, good luck!

 

here, here...

" If you buy a dollar bill for 60 cents, it’s riskier than if you buy a dollar bill for 40 cents, but the expectation of reward is greater in the latter case. The greater the potential for reward in the value portfolio, the less risk there is."

How Warren Buffett Thinks About Risk – Vintage Value Investing