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Empower Wealth Blog post by Empower Wealth

2015 Australian Property Market Outlook | Part 5 – Northern Territory and Australian Capital Territory

Although property investment in the Territories is not the most popular choice, there are still pockets of opportunities. The most important thing is to do your research and find out the hot spots in these area. In the fifth part of our 2015 Australian Property Market Outlook, Ben Kingsley and Bryce Holdaway talks about the property market cycle in Darwin and Canberra. How had they performed in previous years and what’s the outlook going to be in 2015? Watch the video to find out more.

The 2015 Australian Property Market Outlook is broken into six short parts. Click on the links to learn more:

Part 1: Property Market in Sydney and Regional NSW
Part 2: Property Market in Melbourne and Regional VIC
Part 3: Property Market in Brisbane and Regional QLD
Part 4: Property Market in West Australia, South Australia and Tasmania
Part 5: Property Market in Northern Territory and Australian Capital Territory
Part 6: Summary of Australian Property Market in 2015

 

2015 Australian Property Market | Darwin and Canberra [Transcript]

 

Ben: So the territories, we will start with the Northern Territory. Alice Springs is a no-go zone for me. Just really struggles with identity and job opportunities.

So from that point of view, very transient community, so you’ve always got some good rental demand but the growth prospects there are really drag-up growth stories from what’s happening in the other marketplace. Darwin, some views on Darwin, Bryce?

Bryce: Yeah. We often have slight varying views on Darwin because you’re quite bullish on the job opportunities that are out there. But I think that they’re being quite strong for the last – better part of the last 18 months to two years and again, where the median price is really starting to jump up and the yields are – as a – what you’re paying for really compared to what you think is value in the other states is quite high. So for me, I don’t think that that’s an area that you would look at sort of in 2015.

Ben: No. Again, we’ve missed the opportunity there. The pace of growth. I think we actually looked at Darwin over the last five years. It has been either number one or number two in terms of our top performers. So we’ve missed the both and those who did get in when we were telling them to get in around sort of 2012, have done well. So good on them. Again you will always find that one-off opportunity in there and if we need to diversify for our clients’ land tax liabilities, that would be a marketplace that we would consider. But all in all, we will probably leave Darwin alone on a general rule.

Bryce: Experienced investors consider it. Beginner to sort of novice investors, just leave it alone.

Ben: OK. Let’s go into our national capital. This is where we finish off. Let’s talk about the nation’s capital. Job opportunities there, look, you know, federal government doing what they’re doing. Uncertainty around that and we also had a boom of shortage of accommodation. Now, all these new accommodations coming online, so it’s going to be an oversupply lag that’s happening at the moment. So Canberra for me is flat, no growth design for 2015.

Bryce: Yeah, it’s largely not a lifestyle location, is it? It’s an income play and if you’ve got a change of government that’s shedding jobs and there’s some job insecurity there, that’s not an environment that you want to be investing in.

Ben: Mind you, some Canberrians will tell you that it is a great lifestyle and that we’ve got friends out there and look, some of the lifestyle that is really good out there, but I think on the mass, the broader community doesn’t see it that way and that’s a really great point is people who discover a great lifestyle centre. But if the rest of us don’t think it is or we have a perceived view on it, then it’s not going to give that demand and that strength of growth that’s going to see their property prices grow.

So that’s that sort of stigma/status that goes on. So when you hear people talking about Noosa and all those other, those status sort of things going, and that’s how people buy it. It’s that human interest, human behavior story.

Bryce: Because I think that’s the point because you’re right. I have been to Canberra and I’ve had a great time and I’ve got some really good lifestyle options, but it’s perception and you go there for income.

Ben: OK. So let’s wrap it up if we can …

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