Chief Economist at the Macro Investor Leith van Onselen shared his 12-month price forecasts for Australia’s capital city housing markets based on consideration of key price drivers: housing finance; housing supply; affordability; and the macroeconomic outlook.
Darwin: 3% to 6%
Darwin’s housing market has experienced the heaviest losses in Australia, falling by 15.2 per cent (houses) and 16.9 per cent (units) from peak as at May 2012, according to RP Data-Rismark.
However, key indicators suggest that Darwin’s fortunes are turning around, which should support price growth of between 3 per cent and 6 per cent over the next 12 months.
Affordability in Darwin has improved considerably, with home prices relative to incomes just below the national average, and prices compared to rents the second lowest in the nation. Rents have rising sharply – up by around 14 per cent (houses) over the past year according to APM – caused by a rental vacancy rate that is the lowest in the nation and has tightened considerably over the past year.
The tightening of Darwin’s rental market has been driven by the lowest rate of dwelling construction in the nation. Meanwhile, the number of homes for sale is also relatively low, and has fallen by 30 per cent since the same period of last year.