Domain Group's latest data: Australian house prices fell 3% in March quarter
Darwin's real estate market has fallen sharply from the early days of Xiangfeng. Photo: Glenn Campbell
Text: Nicole Frost
According to the Domain Group’s state market report, national house prices fell 3% in the March quarter.
Darwin had the largest decline in the March quarter, which reached 3%, followed by Sydney, which fell 7.5%.
Perth house prices have also fallen from their peak in December 2014, when the median house price was $12. The median house price in Perth is now $616,229.
The Perth market has begun to show signs of recovery in recent years, but it is also easily affected by the season.
Local analysts pointed out that the economic recovery in Western Australia may help stabilize housing prices, but it will still take some time for real growth to occur.
The strongest performing market was Hobart, where house prices rose 2.7%, while Canberra and Adelaide both rose 0.8%.
Of all the cities, Hobart has the strongest annual growth. Photo: Tamara Voninski
In Darwin, apartment prices also fell sharply, with a quarterly decline of 15.9% and an annual decline of 26.9%.
Nicola Powell, a data scientist at the Domain Group, believes that Darwin has always been an unstable market, and the latest report shows that these situations continue to occur.
She pointed out that the market is affected by seasonal factors, so there are seasonal changes.
Darwin's actual median price is back to 2008 prices. Darwin is now the cheapest city for apartments. In March last year, the median price of a Darwin apartment was $3, this year it was $422,875.
Domain’s recent rental report shows that the median rent of houses and apartments in Darwin is also decreasing year by year. The rent for houses is $530 per week and the rent for apartments is $410 per week.
John Daley, chief executive of the think tank Grattan Institute, said: "During the mining boom, there was strong growth. Now it's different." He pointed out that it is difficult for the government to intervene in the market.
He said: "The factors that drive regional economic growth and population growth are things beyond the government's control. They cannot make the mining industry prosper, nor can it stop it."
"The government can ensure that there are enough hospitals and schools, but Darwin already has these things."
Quentin Killian, chief executive officer of the Northern Territory Real Estate Association, said there are more and more positive news about Darwin's economy.
Killian said that Darwin has experienced 21 consecutive seasons of population loss from interstate migration. However, recent news about the use of hydraulic fracturing to extract shale oil is encouraging. This will stimulate the economy and bring more people to work in Darwin.
Median house price in each capital city Source: Domain Group's March Quarterly House Price Report
But on the other hand, Darwin's rental rate of return is very high, and investors can consider buying lower-priced properties. He said: "There are a lot of bargains here."
Although Killian believes that the market will not improve immediately, the scale of the Darwin leasing market means that investors will soon feel the impact of the economic recovery.
He said: "Darwin is a small market, and it is changing very quickly. Here, there are at most thousands of properties on the market, which can change within 12, 16, 18 months.
Median apartment price in each capital city Source: Domain Group March Quarterly House Price Report
In the rest of Australia, Melbourne’s annual growth rate was 8.8%, but the quarterly increase was only 0.1%.
Brisbane house prices are relatively stable, rising 1.5% in the past year, but fell 3% in the March quarter.
Daley said the price growth in Melbourne and Hobart was driven by "very rapid population growth."
He pointed out that taking Brisbane as an example, the decline in apartment prices is not necessarily due to the excessive construction of apartments.
He explained: "Many people say there is oversupply, but Brisbane does not have many vacant apartments, and some sellers cut prices for sale."
"As prices start to fall, those who have been excluded from the market in the past have begun to enter the market."
For more details, please refer to: https://www.domain.com.au/news/house-prices-drop-12-per-cent-across-australia-with-darwin-leading-the-charge-domain-group- 20180426-h0z5gq/