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Emerging Growth Location
- Real Estate in Australia
By John
Faulkner
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| Looking for an emerging
growth location in Australia, consider investing in Darwin Australia, in
a project that offers investors a long term lease with guaranteed returns.
As a property investor, you are probably looking for excellent value today
as well as solid projected medium to long term growth.
Based in Sydney, Australia, Home
Port Property is a real estate agent that specialises in finding investment
properties for international clients that meet those criteria.
Real estate
markets are cyclical and at any point different areas are at different
stages in the cycle. At any one time some areas are better for property
investors than others. That is why Home Port Property, sources a
selection of residential investment stock from throughout the growth areas
in and around Australia and New Zealand that position clients to benefit
from market changes. |
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One area of
particular interest at this time is Darwin, located in Australia’s north,
it is an emerging growth centre, with excellent projected capital growth,
a low vacancy rate and prices that are well short of those in Australia’s
other major capital cities.
This article
will look at some of the factors that make Darwin a good place to invest
and how as an international investor you can go about this process.
Home Port has recently listed a project in Darwin that is gaining substantial
interest from both local investors and our off shore investors, due to
its central city location, water views, long completion period, secure
long term flexible leasing options and guaranteed 6% rental returns.
Some limited details are included in this article, but the article has
been prepared primarily as a general informative document, so please email
for further project specific information.
WHY INVEST
IN DARWIN:
Introducing
Darwin, Northern Territory (NT), Australia’s northernmost capital city
and International gateway. “The fastest growing property sector and
fastest growing economy in Australia” - reported by BIS Shrapnel Property
Prospects Update December 2004.
Access Economics
said that the NT has the strongest investment in the country. Economic
growth would be 5.8% this financial year and 5.2% over the next five years.
This is the highest growth prediction in Australia and is 1.4% above the
national average (NT News, September 2004).
The demand
for residential housing is high and the residential vacancy rate is at
a low 1.6%. Experts say in effect, it is close to zero because there
are always homes empty between tenancies or for renovations. (Source: RELM
May 2005).
Northern Territory
prices are forecast to rise by 20.8% over the three years to June 2007
(Source: BIS Residential Property Updates Dec 2004).
Darwin is positioned
to play a pivotal role in the nation’s future industrial growth.
It has long been a major port for the export of live cattle and it is fast
becoming a primary supply base for onshore and offshore oil and gas projects.
The area is
seeing significant growth in exploratory mining, oil and gas all of which
present immediate opportunities for major growth.
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MUTLI BILLION
DOLLAR INFRASTRUCTURE PROJECTS
Workers and
jobs are flowing into the Northern Territory as a result of a number of
new projects:
• $2 billion
expansion of Gove Refinery creating 1,700 more jobs
• $1.7 billion
railway project just completed
• $2.5 million
Cruise Ship terminal at Fort Hill Wharf as part of the
• Waterfront
redevelopment
• $200 million
new wharf facility nearing completion
• $3 billion
Darwin LNG Gas Plant, including the Australian/Timor gas
• Fields creating
2,100 more jobs
• $1 billion
Darwin Waterfront project
• $7 billion
sunrise gas field negotiation between Australia and Timor
• nearing
completion
• 20,000 new
jobs possible from the Greater Sunrise gas field development
• $2 billion
expansion of Grove Refinery creating 1,700 more jobs
• $1.7 billion
railway project just complete
• $200 million
new wharf facility nearing completion
• $3 billion
Darwin LPG Gas plant
• $1 billion
Darwin Waterfront project
• The Greater
Sunrise gas field is estimated to contain gas worth $41 billion |
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Territorians
are paid more that the average Australian wage, the ABS reported. The average
annual pay in the NT is $51,090 compared to a national rate of $50,762.
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AN
EMERGING GLOBAL ENERGY CENTRE
Darwin is fast
becoming a global energy centre. As work nears completion on the world’s
largest above ground LNG tank ($1.6 billion). Several projects are expected
to come online. They include the new offshore gas field, Blacktip
worth $500 million; new gas processing plant at Wadeye worth $180 million;
Proposed 940 km pipeline from Wadeye to the Gove Peninsula worth $500 million.
(NT Business Review, May 05).
Current negotiations
between Australia and East Timor are expected to finally unlock the gas
and oil riches off the Timor Sea. Especially those of the Greater Sunrise
field about 450km northwest of Darwin. |
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“It will create
jobs, expand business and investment opportunities and aid the nation’s
wealth and strengthen the economic development of northern Australia and
in particularly the NT.” The gas is worth $41 billion. (NT Business Review,
Clare Martin – NT Chief Minister, May 05).
“The still
underdeveloped Greater Sunrise gas field – three times the size of Bayu-Undan,
has the potential to create 80,000 jobs Australia wide – 20,000 in the
Northern Territory.” (Bruce Fadelli President NT chamber of Commerce, Four
Corners ABC TV May 04).
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A BOOMING
TOURISM SECTOR
Darwin features
a strong tourist industry and the region’s Crocodile Dundee image attracts
tourists from all over the world to the splendors of Kakadu and Litchfield
National Parks, the Katherine Gorge to the South and the Tiwi Islands just
100klms to the north of Australia. Tourism is now the Territory’s
biggest employer.
• There is
a chronic shortage of quality hotel rooms currently available
• The NT Government
has committed more than $60 million into tourism infrastructure and an
additional $27.5 million is being spent overseas selling Destination Darwin.
This campaign alone is expected to create 950 additional jobs. (Source
NT News 15/11/04)
• Access Economics
forecast a 28% + increase in international arrivals this year.
• The Ghan,
one of the world’s great trains provides a transcontinental link to Adelaide
2,979 klms in the south of Australia with touring options along the way
at Alice Springs (just 280miles from Ayers Rock - the world’s largest monolith)
and Katherine Gorge. This train alone brings 1,000 tourists a week
to Darwin and extra Ghan trains have been added to cope with the demand.
From Adelaide it links with rail services to Perth in the West, Melbourne,
Sydney, Canberra and Brisbane in the East.
• Aboriginal
land and culture is a major draw card for thousands of visitors to Darwin
each year. The presence of indigenous art and culture in the Northern Territory
is stronger here than anywhere else in Australia.
• Qantas has
added 750 more seats weekly on the Sydney-Darwin route during the Dry and
Virgin Blue will be offering a daily Sydney service during the next three
months.
• Cruise ship
visitors contribute more than $10 million annually to the NT economy. Eighteen
cruise ships are scheduled to berth in the next 10 months. |
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A STATE GOVERNMENT
COMMITTED TO GROWTH
Chief Minister,
Clare Martin’s government is committed to fuelling and supporting strong
economic growth, with greater funding than ever before. “Treasurer Syd
Stirling promised Tax cuts worth $40 million over the five
years….including
record payroll tax cuts, making the Territory the lowest taxing jurisdiction
for a small business with up to 100 staff from July 26 2005…the Treasurer
also earmarked $476 million for infrastructure, part of
which will
go towards the $600 million redevelopment of Darwin’s waterfront.” It’s
growth, is going to transform Darwin, it’s going to make Darwin like no
other city in Australia.” Mr Stirling said. “This is going to be a milestone
in Darwin’s history – not only will it create thousands of local jobs…it
will provide a draw card for conventions and tourists for many, many years
into the future.” (AFR 4/5/05)
WHY INVEST
IN PROPERTY IN DARWIN?
The differential
between property values in Darwin and the eastern seaboard
markets of
Sydney, Melbourne & Brisbane makes it possible to buy a CBD property
in Darwin for what represents outstanding value by comparison. For
example:
Sydney CBD/waterview
$10,000+ per square metre.
Brisbane CBD/waterview
$8,000+ per square metre.
Darwin CBD/waterview
$5,000+ per square metre.
Latest figures
show that the Darwin property market is booming. Brisbane, Perth
and Darwin are forecast to show the strongest growth in house prices over
the next three years. With Northern Territory prices forecast to rise by
20.8% over the three years to June 2007. (BIS Shrapnel Residential Property
Prospects – Update December 2004).
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“Darwin’s
housing boom is set to continue for at least another four years before
leveling, property experts have predicted.” (NT News, REINT) The
Northern Territory Real Estate Institute predicts that prices will go up
by 6% to 7% per year for the next 6 years. (NT News Dec 04) According
to the Australian Property Monitors, Darwin’s median house price was up
by 14.7% year ending 2004. (SMH Domain Dec 04) Median house prices in Darwin
are forecast to rise by 22% over the 2004 to 2007 period, with population
increasing to an inflow of 1,000 by 2005/06.” (BIS Shrapnel, Residential
Property Prospects, May 2004) |
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The average
annual occupancy in CBD serviced apartments for the period 2003-04 was
over 70% with an average room rate of $122 per night. (Source: Mike Jones,
Resort Brokers and Prime Investment Marketing Report Oct. 04)
The defence
community in Darwin has almost doubled since the early 1990’s with the
number of defence personnel and their families increasing from about 6200
in June 92 to an estimated 12,900 by June 2004. The presence of defence
forces has put enormous pressure on housing stock in Darwin. (AFR Sept
04)
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