A recent report by Herron Todd White has found that despite rising construction costs, limited government stimulus, and a dwindling supply of land, homebuyers in Darwin are still eager to build new homes. The report analyzed vacant land markets across Australia and discovered that demand for land remained stable in the Northern Territory’s capital city, even though many buyers nationwide preferred established homes over building.
Kevin Brogan, Herron Todd White’s national director of group risk and compliance, explained that factors such as interest rate hikes, longer build times, and higher construction costs were influencing buyer behavior. Some buyers are considering the costs and uncertainties associated with building and choosing to purchase existing properties instead. Others are purchasing land with the hope that construction costs will eventually decrease.
In contrast, Darwin seems to be defying this trend. Megan Cornish, a local Herron Todd White valuer, revealed that there is still a demand for new houses and land in the region, despite rising construction costs and limited government incentives. The Northern Territory offers only a $10,000 First Home Owners Grant, much less than other states, yet the demand for new builds remains strong.
Cornish acknowledged that buyer confidence may have experienced minor fluctuations due to interest rate increases, but it hasn’t significantly affected demand or property values. The values for new builds in Darwin and Palmerston have aligned with the costs of construction, as buyers are willing to pay premiums for new homes. Land prices have remained relatively stable over the past year.
However, the availability of land in the Darwin area is limited. Cornish mentioned three master planned communities – Lee Point, Northcrest, and Zuccoli – where buyers can find land for sale. Nevertheless, supply is constrained due to a lack of suitable development sites and title delays. The rural residential land market has also experienced a stall, with little to no readily available stock.
It remains uncertain how the land market will evolve in the future, as interest rates and construction costs continue to rise. However, for now, homebuyers in Darwin are still eager to invest in new builds, outweighing the challenges of increased costs and limited land supply.
Sources:
– Herron Todd White Month in Review
– Realestate.com.au