The property market in Darwin is flying since the Northern Territory Government introduced its $50,000 Territory Home Owner Bonus last month, according to leading property expert Glenn Grantham, General Manager, Raine & Horne Darwin.
In the month since the announcement, Raine & Horne Darwin has sold 31 vacant land lots at Zuccoli Aspire in Palmerston to first home buyers, which the firm is exclusively marketing, as well as 16 established properties spread across the entirety of Darwin.
“Most of the established homes are being purchased by first-time buyers with large deposits and who are also utilising the $33,929 in government assistance available to them. First timers can claim a $23,929 stamp duty break and a $10,000 renovation grant if they purchase an established home.
To illustrate, the Darwin property firm sold an immaculate three bedroom home at 350 Trower Road, Tiwi to a first time buyer for $425,000.
Mr Grantham said, “Overall we’ve achieved a five-fold surge in sales since the announcement, and the sweet spot for first-time buyers lies between $400,000 - $550,000.
However, NT’s government’s generosity comes with a pressing deadline, warned Mr Grantham. On the 7 May 2019, the first homeowners’ grants will be slashed from $26,000 to $10,000 for those building or buying a new home[i].
“While first-timers will still be able to claim up to $18,601 in stamp duty concession as part of the Territory Home Owner Discount, the smaller grant means they will have less money to put towards a deposit for a new home, which affects their loan affordability,” he said.
“This is a significant change because those with smaller deposits are buying or building new homes to take advantage of the more generous incentives.
“On the flipside, those first-timers with bigger deposits and therefore need the incentives less are choosing established homes.”
Mr Grantham said investors are selling most of the established stock in Darwin being snapped up by first home buyers.
“The loss of rental stock will present a significant challenge for the Darwin market. We expect rental vacancy rates to plummet, which will push up rents across the city.
“As the resources sector continues to pick up steam finding rental accommodation will be a challenge for workers shifting to Darwin, and we expect rental yields to surge as we progress through 2019.
“However, to take advantage of rising yields, investors need to make a purchase pronto before residential prices start surging too on the back of the improving resources sector and the buying challenges presented by first-time buyers armed with government incentives.
For all your sales and property management requirements in Darwin and Palmerston, contact Raine & Horne Darwin on 08 8941 8941.