propell market
SEPTEMBER | 2008
Darwin Still Defying The Odds But
The Tables Are Turning
Darwin had the highest price growth in housing across Australia with a 2.14%
increase for the September quarter 2008. This growth is lower than June and is a
sign that Darwin’s reign at the top is starting to wane. Significantly, there were 151
building approvals which is a 27.75% decrease on the previous quarter while housing
finance commitments were down 8.38%. This compares to a decrease nationally of 5.78%
and 9.19% respectively.
• 151 building approvals
for the quarter. 27.75% Underpinning the state’s housing market are strong labour market conditions in the three
decrease on June 2008 main industries of Defence, Mining and Government Services. Strong wages growth and a
population growth of 2.04% (compared to Australia at 1.5%) have kept house, and
particularly rent prices moving in a positive direction. It currently takes a larger percentage
• 8.38% decrease in
of income to cover rent in Darwin than it does a mortgage (29% compared to 25%). An
housing finance
over-supply of unit projects currently on the market is starting to subdue growth as is the
commitments.
falling sales numbers in both units and houses.
• 2.14% growth in house
prices for quarter, Darwin’s strong labour conditions have seen the unemployment rate decreasing to 2.9%
12.89% year-to-date from 3.2% registered in June. This is the lowest in the country. There has been concern in
the mining sector with the general slowing of world economic growth and commodity
prices potentially placing some projects and developments on hold. The $12billion Inpex
• Unit prices and sales
LNG plant is a case in point. While front-end work is currently in progress, there is still
numbers slowing
some uncertainty as to whether it
considerably due to
will go ahead on schedule. The
oversupply
Defence sector however is
continuing to grow which is helping
to offset employment worries.
Darwin house prices increased
2.14% for the quarter. The median
house price for September 2008 is
$476,661. This represents an increase of 12.89% since September 2007. Median unit prices
are $329,904, an increase of 1.67% for the quarter and 10.34% year-to-date. House and unit
prices are considered to be over-valued with rents also reaching unsustainable levels.
1300 VALUER Property Intelligence for today and tomorrow

Propell National Valuers | Residential Overview | SEPT 2008
House and unit price growth in the top 10 suburbs for the year-to-date varied from 41.9%
in Virginia through to 13.7% in Stuart Park for houses, and 35.4% in Larrakeyah to 10.5%
in Karama for units. Surprisingly, houses in the very outer suburbs of Darwin (i.e, further
than 20 minutes or more drive) performed the best followed by waterfront or near
waterfront areas. Not surprisingly, the best unit growth was focused around the city
centre and closely located suburbs and again, the waterfront did well. Darwin has free-
flowing transport routes which enables easy access to the city.
• Virginia top performing
The table below illustrates the top 10 Darwin growth suburbs based on median house
and unit prices for the September quarter 2008 year-to-date. suburb with growth of
Top 10 Growth Suburbs 41.9% for houses and
Larrakeyah with 35.4%
Suburb Median Q3 Median% Suburb Median Q3 Median%
for units
(Houses) 2008 Change (Units) 2008 Change
Virginia $550,000 41.9 Larrakeyah $430,000 35.4
Girraween $420,000 38.2 Brinkin $283,750 19.2 • Easy road access and
proximity to CBD has
McMinns Lagoon $510,000 35.6 Rapid Creek $300,000 19.0
driven suburb growth
Nightcliff $605,000 20.7 Bakewell $290,000 18.4
particularly in the outer
Bayview $717,500 20.6 The Gardens $425,000 16.4
suburbs for houses
Coconut Grove $550,000 19.0 Leanyer $298,500 14.8
Moulden $325,000 14.0 Marrara $310,000 14.7
Fannie Bay $820,000 13.9 Moulden $272,850 13.7
Nakara $446,250 13.7 Fannie Bay $378,000 12.8
Stuart Park $613,000 13.7 Karama $242,000 10.5
Source: RPData
Darwin’s house price has increased by 12.89% for the year to September, while unit price
growth has been 10.34%. This compares to South Australia(10.84% and 11.46%),
Melbourne(5.80% and 4.16%), Brisbane(3.66% and 1.73%), Hobart(9.94 and –7.23%),
Perth(-4.31% and 1.26%), Canberra(2.73% and 7.64%), and Sydney(-1.48% and -1.18%)
Source: RPData
2| QUARTERLY RESIDENTIAL REPORT—Darwin

Propell National Valuers | Residential Overview | SEPT 2008
Residential Rental Market
In the September quarter vacancy rates were 0.3%, down from 0.7% in June 2008. The
average weekly rent for a two bedroom unit in Darwin is $400 per week. This is an
increase of 6.66% over the quarter and 17.64% for the year-to-date. The average weekly
rent for a three bedroom house in Darwin is $480 per week, an increase of 6.66% and
20.00% year-to-date.
Current tenant demand for rental properties in Darwin is extremely high with intense
competition for properties, yet unit and house sales themselves are down. This is an
anomaly considering that it costs more to rent than buy in Darwin at present.
The graph below illustrates the average residential rent growth in three bedroom houses
and two bedroom units in the Darwin metropolitan area over the last two years.
• Vacancy rates return to
historic lows of 0.3%
down from 0.7% in
June
Source: Housing NT
• Intense competition for
The table below highlights median rents within Darwin and Northern Territory for the
rental properties. Unit
September quarter 2008 while the table over the page highlights the median rent by
sales demand slowing. property type in the Darwin Statistical Division for the September quarter 2008.
• Inner Darwin has Median rents within Darwin and Northern Territory September Quarter 2008
highest rent increase of (3 Bedroom House)
8.3% for quarter an Area Median Rent p/w Qtr % Annual
23.8% year-to-date Change % Change
Inner Darwin $520 8.3% 23.8%
Northern Suburbs $440 7.3% 20.5%
Palmerston $390 8.2% 21.8%
Katherine $300 3.4% 15.3%
Alice Springs $350 6.0% 20.6%
Source: Housing NT
Suburb Sales Q1
2007 Median Q1
2007 Sales Q1
3| QUARTERLY RESIDENTIAL REPORT—Darwin

Propell National Valuers | Residential Overview | SEPT 2008
Median weekly rent by property type (Darwin SD)
Median Rent p/w Qtr % Annual %
Change Change
Darwin
1 Bed Unit $330 6.4% 11.8%
2 Bed Unit $400 6.6% 17.6%
3 Bed House $480 6.6% 20.0%
4 Bed House $570 3.6% 14.0%
Source: Housing NT
Population
As at December 2007, The Darwin Statistical Division had a population growth of 2.65%,
the highest in the country above the Statistical Divisions of Perth (2.32%) and Brisbane
(2.04%). This represented a total of 3,027 people or the equivalent of 58 people per week. • Darwin population
The Northern Territory as a whole grew by 2.04% or 4,301 people. The balance of the
growth of 2.65%, the
Northern Territory grew at a rate of 1.32% or 1,280 persons.
largest in the nation
Net Interstate migration has seen the greatest increase for the Northern Territory with 871
• Net interstate migration
arrivals in the December quarter (up from 357 in the previous quarter), with Net Natural
Increase also contributing with 2,130 persons (up from 2018). Net overseas migration has
showing signs of
fallen for the same period with 781 arrivals as opposed to 1,019 in the previous quarter.
recovery while
overseas migration falls
The Northern Territory’s Gross State Product for the year to December 2007 was 5.6%
(above the average of 4.3%), with a State Final Demand of 1.5%. This contributed to Total
Domestic Demand by 0.1%. • Public Administration
highest employment
During 2008 the majority of the Northern Territory’s workforce were employed in the industry at 22% of
Public Administration and Safety industry(22%). The most common occupations are
workforce
Professionals (18%), Technician and Trades workers(15%), Clerical Administration(15%),
Labourers(12%) and Managers(12%). There was a decrease in the Retail Trade industry
from 11.9% of the employed workforce in 2001 to 9% in 2007. It is interesting to note that
even though a large portion of the rise in median income between 2001 and 2008 has
been attributed to persons in the mining sector, only 2% of the NT workforce was
employed in this industry, a decrease from 2.4% in 2001.
The mining industry (comprising mineral ore and energy production) contributed $1.93
billion to the Northern Territory economy in 2005-206 and was projected to be higher in
the 2006-2007 financial year (figures not currently available). This figure comprised
metallic mineral production of $1.67 billion, non-metallic mineral production of $17.8
million and energy minerals of $233.8 million.
The largest proportion of this mineral production was sourced form the East Arnhem land
regions with large mines located at Nhulunbuy and Groote Eylandt. The production
consisted of manganese, bauxite and alumina.
4| QUARTERLY RESIDENTIAL REPORT—Darwin

Propell National Valuers | Residential Overview | SEPT 2008
Major Projects
Darwin’s primary industries revolve around Mining, Government Administration and
Defence and it is no surprise to see these three sectors attracting the lion’s share of
funding for the state’s development. Of particular note are the recent projects
undertaken within the Timor Sea Gas fields.
Timor Sea Gas: Aside from ongoing exploration and appraisal of drilling
programs within the Greater Sunrise, Caldita/Barossa and Evans Shoal fields, a
detailed 3D seismic survey is being undertaken to identify reserves for a new
onshore LNG plant. Also, the development of a downstream gas manufacturing
industry to broaden the industrial base within Darwin.
Darwin Waterfront Upgrade: Construction of the Darwin Convention Centre is
well under way with the main structure in place and supporting infrastructure
being finalised. Stage One of the project is due for completion in 2008. Over $130
million worth of contracts have been awarded to local companies and more than
1000 jobs created. The centre is expected to create $193 million in tourism
expenditure over 20 years.
Defence : Projects include the $20 million upgrade of HMAS Coonawarra,
development of the 8,700 square kilometre Bradshaw Field Training Area, the
relocation of 1st Aviation Regiment from Queensland with 16 new Tiger attack
• 3D seismic surveys to
helicopters, the commissioning of 14 Armidale Class Patrol boats and a $170
identify new reserves million investment by the Defence Housing Association in the suburbs of Lyons
for onshore LNG plant involving 300 homes for Defence personnel.
• Major Defence projects
to keep industry active FOR MORE INFORMATION
Summary CONTACT
Darwin has been defying the odds since 2005 and it
Aaron Parker
looks like the run might be coming to an end as
investors start to shy away from the high prices of Research Manager
property and sales volumes slow dramatically.
Opposing this is the high rental returns available and
Phone: 07 5443 2322
the disparity between rental costs and mortgage
Fax: 07 5443 8039
costs which may push locals into buying instead of
renting, thus supporting the current market. The E-mail: aparker@propellvaluers.com
question here is, can the locals afford it?. Or is it just
investors and miners who have the money.
Uncertainty on the world stage is affecting some
employment sectors (aka mining) where a lot of
renters come from and if they go then another hole
may open in the market. It’s a fragile equation at the OR CALL
moment and one that will require close scrutiny. If
industry turns bad in Darwin, so will house prices, 1300 VALUER
despite the high rental returns. (1300 825 837)
Propell National Values does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information
contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. Whilst all
care has been taken in the preparation of this report, we have no belief one-way or the other in relation to the accuracy of such information, figures and projections
contained herein. Propell National Valuers will not be liable for any loss or damage resulting from any statement, figure, projection or any other information that you rely
upon that is contained in the material. COPYRIGHT - Propell National Valuers 2008
5| QUARTERLY RESIDENTIAL REPORT—Darwin