• ThemedianhousepriceinDarwinincreasedto$585,000from$547,000.• ThemedianhousepriceinPalmerstonincreasedagainto$492,000from$480,000.• Darwin’smedianunitpricefellto$432,000from$438,000.• Approximately88%ofallunitsaleswereunder$600,000intheMarchquarter.• Theofficialcashrateremainsonholdat4.25%

RESIDENTIAL MARKET OVERVIEWTheDarwinmarkethasshownhigherlevelsofconfidenceatthebeginningof2012,followingsoftconditions in2011.Agents report strongbuyer optimismwith increased enquiry andpurchaseoffers,followingtheannouncementoftheINPEXIchthysproject.Whilstthetopendofthemarketremainssluggish,thelowerendofthemarketcontinuestorecordsubstantialactivity.

AccordingtoRPData,DarwinwasthebestperformingcapitalcityforhousepricesintheDecemberquarterandrecordedthehighestrentalyieldsoverthepast5years.RentalratesinDarwinareexpectedtoincreasein2012duetoatighteningsupply;howeverRPDatadoesnotanticipatethesameincreasetobereflectedinhouseprices.Affordabilityisthekeyfactorthatwillaffectpropertygrowth.Ideally,agrowthindisposableincomemayleadtofurthergrowthinpropertyvalues.

First home buyers are active again, thoughmore than ever, affordability is crucial. This is ofparticularconcerninDarwinwherebuyersareleftwithlittlechoiceinthesub$500,000market.Inthetotalnumberofhousessoldover2011inDarwin,the$500,000-$600,000pricerangeheldthehighestvolumeofsalesat33%,whilstinPalmerston51%ofallhousesaleswererecordedinthe$400,000-$500,000pricerange.Pentupdemandforaffordablehousingisanticipatedtokeepthemarketbuoyantthroughout2012.

ThevolumeofhousesalesinbothDarwinandPalmerstonremainedhealthy,whilstthemedianhousepricesshowedsignsofgrowthnotseensince2009.Demandforaffordablypricedhomeswasstrong,withthebulkofsalesrecordedunder$700,000.InPalmerstonsalesvolumecontinuedtoimprove,withahealthynumberoftransactionsforpropertiesunder$600,000.HomespricedatthehigherendofPalmerston’smarketrecordedfairlylowdemand,makingitclearthatbuyersareseekingaffordablypricedhomes.

Theunitmarketshowedincreasedactivitywithhighervolumeofsales,however,themedianpriceremainsbelowthatrecordedin2011.Unitspricedbetween$400,000and$500,000arerecordingthemostactivity.

LandsalesinPalmerstonremainedquitestableasthemarketabsorbedthestagedlandreleases.Moresupplyofnewland isexpectedtocomeon line in2012and isanticipatedtokeeppricessteady.

Meanwhile land sales in Darwin increased due to the release of land in the new Muriheadsubdivision.

DARWINRESIDENTIALRESEARch & FOREcAST REpORT

www.colliersnt.com

Q1 2012 | RESIDENTIAL

city-fringe units record strong demand.

MARKET INDIcATORS FOREcAST - 6 MONThS

OVERALL pERFORMANcE

TRANSAcTION AcTIVITy

SuppLy

DEMAND

SENTIMENT

VAcANcy RATE

EcONOMIc gROWTh

INfRASTRucTuRE

POPuLATION GROWTH

SuMMARy

Transactionalactivityimprovedwithstronglevelsofbuyeroptimism.

MARch QuARTER hIghLIghTS

Darwin market on the move...

TOp FIVE SALES

SUBURB PROPERTY SETTLEDPRICE

Larrakeyah 11HickeyCourt $2.65m

Larrakeyah 78CullenBayCresecent $2.2m

FannieBay 14ChristieStreet $1.385m

Larrakeyah 4GodfreyCourt $940,000

FannieBay 7McKinlayStreet $935,000Source: Land Titles Office & colliers International Darwin

N.B. Information for this table was obtained from a public domain source

TOTAL SALES OF DWELLINgS (hOuSES & uNITS)ThetotalsalesvalueofallresidentialpropertyinDarwinandPalmerstonincreased in the first quarter to $320.8million, up from theDecemberquarterwhere it was recorded at $302.4million. This represents 665property transactions and increase of approximately 6% from the endof 2011. In the regional breakdown, Darwin and the Northern Suburbsrecorded a total of $205.6 million and Palmerston recorded a total of$115.2million.

RENTALSTheDarwinrentalmarketshowedstronggrowthinthefirstquarterof2012, with returns anticipated to continue to rise over the next 12months. Vacancy rates have dropped sharply,with in-house propertymanagementrecordingvacancyofapproximately1%.Itisexpectedthatrental rates will be forced up due to a shortage of available stock.Currentrentalyieldsarewithintherangeof5-7%ofpropertyvalue.

DarwincontinuestorankasoneofthemostexpensiveplacestorentinAustralia.Rentalratesvarygreatlydependingonqualityandlocationofstock.Anaverage3bedroomhouse inDarwin rents for$550-$650.Larger executive style homes attract rent from $800 per week andupwards.WhilstinPalmerston,housesrentonaveragebetween$500-$600perweek.

Unitswithincloseproximityofthecitycontinuetohavestrongdemand,andabasic2bedroomunitfetchesapproximately$400-$500perweek.Darwin continues to achieve the highest rent for units, along withSydney,wherebothcitieshaverecordedanaveragerentalof$460perweek.

Rental demand for executive apartments has improved as largecompaniesmoveintotheTerritory.Executiveapartmentscurrentlyfetchbetween $800 to $1000 per week, and this figure is anticipated toremainstableduring2012.

PROPERTYTYPE AVERAGERENTALRETURNS

Darwinhouse(3bed) $550-$650perweek

Palmerstonhouse(3bed) $500-$600perweek

Darwinunit(2bed) $400-$500perweek

Palmerstonunit(2bed) $350-$450perweek

Executiveunit(3bed) $800-$1000perweekSource: colliers International Darwin

RENTAL MARKET

Darwin’smedianhousepricewas$585,000.

DARWIN hOuSE pRIcESDarwinandtheNorthernSuburbsrecordedatotalsalesvalueof$98.6million forhouses intheMarchquarter.Therewere 153transactionsrecordedandtheseequatedtoanincreasedmedianpriceof$585,000.Forthefirsttimeinapproximatelyayear,thereweremoresalesatthehigherendofthemarketforhomesover$600,000.Comparatively, inthelastquarterof2011thetotalsalesvaluewas$99.9millionandthemedian price was $547,000, reflecting only a slight decrease intransactionalactivity.

SUBURB AMOUNTOFTRANSACTIONS

MEDIANPRICE

Wulagi 19 $550,000

Leanyer 17 $550.000

Karama 11 $540,000

Lyons 11 $740,000

DARWIN - MOST pOpuLAR SuBuRBS

Source: Land Titles Office & colliers International Research Darwin

TOTAL VALuE OF DARWIN hOuSE SALES

Source: Land Titles Office & colliers International Research Darwin

$89,359,875

$75,409,643

$83,945,488

$99,864,949 $98,566,150

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

ThemostpopularsuburbtopurchaseinwasWulagiwith19transactionsrecordedandamedianpriceof$550,000.Wulagiisfavouredbyyoungfamilies due to its affordability and central location to Casuarina, theairportandschools.ThesecondmostpopularsuburbcontinuedtobeLeanyerwith17salesandamedianpriceof$550,000.

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RESEARcH & fOREcAST REPORT | Q1 2012 | RESIDENTIAL | DARWIN

pALMERSTON hOuSE pRIcESPalmerstoncontinuedtoproducestrongsalesfigures intheMarchquarter,with150transactionsrecordedandatotalsalesvalue$78.2million.ThemedianhousepriceinPalmerstonalsoincreasedforthethirdconsecutivequarterto$492,000,andwaslargelyattributedtothe sale of newly constructed houses inRosebery andBellamack.Comparatively,inthepreviousquarterthemedianpricewasrecordedat$480,000.

Durackwas themost active suburb inPalmerston for thequarter,recording 24 transactions and a median price of $484,000. ThesecondmostpopularsuburbwasRoseberywith22transactionsanda median price of $590,000, reflecting the higher prices that arebeingachievedfornewhomesinthenewlandsub-divisions.

Affordableunitsareinhighdemand.

LANDTherewerefewerlandsalesrecordedinPalmerstoninthefirstquarterof 2012, though this was attributed to last year’s absorption of thesubdivisionsinBellamackandJohnston.Intotal,67transactionswererecorded with a sales value of $15.6 million. The median land priceincreasedslightly to$218,000andwasattributed to thesaleof largesemi-ruralallotmentsinBellamack.

InDarwin,therewasasanincreaseinthenumberoftransactionsforresidentiallandwith28salesrecordedandamedianpriceof$330,000.This increase was largely attributed to the new northern-suburbsubdivisionofMuirhead.TheMuirheadblockswillbereleasedinstagesoverthenext6-8yearsandwithatotalof1096lotsavailable,theyareanticipatedtohelpeasethehousingsupplyshortage.

ThereisaproposalbytheNorthernTerritoryGovernmenttoamendtheplanning scheme for single dwelling (SD) blocks over 1000sqm. TheamendmentwillallowfordualoccupancyofapprovedSDallotmentsandisanticipatedtoimprovehousingoptionsandeasethedwellingshortageinDarwin.

“Darwin cBD was the most popular location for unit buyers...”

Source: Land Titles Office & colliers International Research

TOTAL VALuE OF DARWIN uNIT SALES

uNITSTheDarwinunitmarketcontinuedtoimproveinsalesvolumeovertheMarchquarterwitha13%increaseinthevalueofalltransactions.The total sales value was $97.9 million, with 209 transactionsrecorded. The median unit price continued to decrease from theprevious quarter and was recorded at $432,000, compared to$438,000 intheDecemberquarter.Thedecrease inmedianpricereflectedtheinclinationforbuyerstoseekaffordablypricedproperty,withoverpricedstockgenerallyremainingonthemarketforextendedperiods.

DarwinCBDwasthemostpopularlocationforunitbuyerswith45transactions recorded and a total sales value of $22.9 million. IntheMarch quarter CBD apartments accounted for 23% of all unitsales,reflectinganimprovementfromtheDecemberquarterwheretheCBDcontributed 16%of unit transactions.City fringe suburbsdominateda largesectionof theunitmarket,withLarrakeyahandStuart Park both recording 20 transactions each for the quarter.Other popular suburbs for purchasers included Parap and RapidCreek. Itappearsthatasteadysupplyofaffordablypricedstock iskeepingthissegmentofthemarketbuoyant.

InthePalmerstonunitmarketthevolumeoftransactionsremainedstablewith58salesrecorded.Thetotalsalesvalueforthequarterstoodat$21.4million,withamedianpriceof$359,000.Themedianprice is anticipated to remain stable, as a large number of newlyconstructedunitscometomarketinthearea.

EXEcuTIVE ApARTMENTSSales of executive apartments continued to be subdued in theMarchquarter of 2012, with purchasers selecting more moderately pricedstock. The highest sale price recorded in the first quarterwas $1.35millionwith3othersalesrecordedinasimilarpricerange.DatahasshownthatCBDexecutiveapartmentsover$700,000representedonly3.5%ofallunittransactionsinthefirstquarteroftheyear,andthisisapatternexpectedtocontinueforthetimebeing.

“Large companies seeking accommodation for employees are expected to absorb stock...”

Whilstsalesforexecutiveapartmentsremainflat,theuptakeofleasesforexecutiveapartmentshas improvedandthistrend isexpectedtobeafeatureof2012.Largecompaniesseekingaccommodationforemployeesareexpectedtoabsorbstockfromdevelopmentsthathavesufferedanoversupply.

$121,351,446

$71,517,429$66,813,164

$77,014,400

$86,557,091

$97,919,000

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

Q42010 Q12011 Q22011 Q32011 Q42011 Q12012

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RESEARcH & fOREcAST REPORT | Q1 2012 | RESIDENTIAL | DARWIN

OutlookTheterm“cautiousoptimism”springstomindinanattempttogenerallydescribethemoodoftheAustralianpropertysector.Australianscontinuetobeconservativeintheirspending,withmanychoosingtosaveorreducetheirexistingdebt,atrendcommonlynotedinuncertaineconomictimes.AstudybytheABShasalsorevealedthattherefinancemarketwasupby20%on2010figures,suggestingthatAustraliansaretakingadvantageofthecompetitivelendingenvironmentandreducedpenaltybarrierstorestructuretheirdebt.

A low interestrateenvironment isassisting inrestoringconfidence intheAustralianpropertymarket.TheReserveBankhaskepttheofficialcashratesteadyat4.25%duetoastabilisingeconomic environment. These efforts however, have been slightly counteracted by some ofAustralia’slargebanksdecidingnottopassdiscountsontoclientsandinsteadincreasingtheirlendingrates.Thispracticeposesathreattorecoveryinthenationalhousingmarket.

“... the Territory was ranked second for optimism in the property market, and first for confidence of residential property values increasing...”

Buyerscontinuedtomakecautious, informedpurchasingdecisionsandasresultsalesactivityimprovedwhilstpricesremainedlow.Itisanticipatedthatnationallyin2012,buyeractivitywillremainsteadybutpriceswillshowlittlesignofcapitalgrowth.ThisisincontrasttotheDarwinmarket,whichisexpectedtorecordgrowthinvalues.InamediareleaseissuedbytheNorthernTerritoryGovernment,asurveybytheAustralianPropertyCouncilreferencedthattheTerritorywasrankedsecondforoptimisminthepropertymarket,andfirstforconfidenceofresidentialpropertyvaluesincreasing.

“Employment prospects are strong for the Territory and this coupled with a growing economy; suggests a positive outlook for 2012.”AccordingtoAccessEconomics, in2012-2013economicgrowth intheTerritory is forecasttostrengthenby3.8percent.ThisgrowthprojectionisattributedtoprivateconstructioninvestmentandthecommencementofmajorresourceprojectsintheTerritory.InternationalexportgrowthisalsoanticipatedtostrengthenduetoincreasedtradewiththeTerritory’sAsianpartners.

Employmentprospectsarestrong fortheTerritoryandthiscoupledwithagrowingeconomy;suggestsapositiveoutlookfor2012. Increasedconfidencefollowingtheannouncementofthemulti-billiondollarINPEXgasproject isanticipatedtoboostactivityinboththeresidentialandcommercial sector. In the long term, continued growth of the resource industry provides apromisingfutureforDarwin.

Information Sources

Easy Access, ABS, Land Titles Office, NT Government, Access Economics, AMP National Centre-Social and

Economic Modelling, REINT, NT Treasury, Territory Economic Review, RP Data, National Bank of Australia

Residential Property Index, Colliers International Research Darwin

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RESEARchER

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ColliersInternationaldoesnotgiveanywarrantyinrelationtotheaccuracyoftheinformationcontainedinthisreport.Ifyouintendtorelyupontheinformationcontainedherein,youmusttakenotethattheinformation,figuresandprojectionshavebeen

providedbyvarioussourcesandhavenotbeenverifiedbyus.Wehavenobeliefonewayortheotherinrelationtotheaccuracyofsuchinformation,figuresandprojections.

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Acceleratingsuccess.

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