{"id":7778,"date":"2016-04-25T01:00:46","date_gmt":"2016-04-24T15:00:46","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=7778"},"modified":"2016-04-25T01:00:46","modified_gmt":"2016-04-24T15:00:46","slug":"challenge-facing-nt-property-owners","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/challenge-facing-nt-property-owners\/","title":{"rendered":"Challenge facing NT property owners"},"content":{"rendered":"<p>&nbsp;<br \/>\n<strong>Korgen Hucent<\/strong> gives us a sobering report on the Northern Territory and that the oversupply is bringing a whole different type of investor into that market.\u00a0\u00a0 He tells us about the new challenge property owners are facing.<br \/>\n<strong>Transcript:<\/strong><br \/>\n<b>Kevin:<\/b>\u00a0 Let\u2019s go from one end of Australia to another. Two very different markets \u2013 Sydney and Darwin \u2013 and this time, we\u2019re going to take you to the Darwin Northern Territory market. I\u2019m talking to Korgan Hucent from Ray White at Bayside, working out of the Darwin market.<br \/>\nKorgan, thank you very much for your time.<br \/>\n<b>Korgan<\/b>:\u00a0 Thanks, Kevin. It\u2019s good to be on the show.<br \/>\n<b>Kevin<\/b>:\u00a0 I\u2019d have to say as an outsider, Darwin\u2019s had a bit of a patchy year. Would you agree with that?<br \/>\n<b>Korgan<\/b>:\u00a0 Yes. Look, that\u2019s probably being a little bit conservative. Property values and the market performance probably peaked in mid-2014, and we\u2019ve certainly seen a softening of the market, certainly in the last 12 months. That\u2019s for sure.<br \/>\n<b>Kevin<\/b>:\u00a0 What impact has that had? Has that brought more opportunistic buyers into the market, Korgan?<br \/>\n<b>Korgan<\/b>:\u00a0 It has. We\u2019ve seen a drop in volume both in the housing and the unit market of a significant figure. Housing, overall, Darwin is down by about 30%, but the unit market is down and probably more affected by almost 50%. Just a result of oversupply and of developments that were up and running in 2013 and 2014, and now, obviously, just loads of choice. The market is certainly not where it was this time in 2014.<br \/>\n<b>Kevin<\/b>:\u00a0 One of the questions I wanted to ask you was how would you assess investor sentiment, but I might swing that around and ask you about developer sentiment. What are they saying to you? Are they confident about coming out of the ground?<br \/>\n<b>Korgan<\/b>:\u00a0 In my conversations on the ground, there\u2019s certainly a loss of confidence both from investors for properties that we manage and just general sentiment, but also developers recognizing that obviously the market is down, and while there\u2019s so much choice around, obviously, people are holding back. They are holding back.<br \/>\n<b>Kevin<\/b>:\u00a0 It must be an interesting dynamic in the market. You\u2019ve come off a fairly hot time to now a difficult time, and your communication with sellers is probably one of the most difficult things you have to do right now because I imagine there would be a number of people who want to get out but can\u2019t get back what they paid for their properties.<br \/>\n<b>Korgan<\/b>:\u00a0 No doubt. In the last three, four, even five years, if someone is looking to exit the market, in the current climate, it\u2019s certainly going to be a challenge. It just means people need to either accept the status of the market and make decisions accordingly or be prepared to ride out the next two, three years, what we believe where it\u2019s probably going to remain a little bit flat, and obviously, maybe in the medium-term, things will pick up from there.<br \/>\n<b>Kevin<\/b>:\u00a0 How has that impacted rental returns?<br \/>\n<b>Korgan<\/b>:\u00a0 We\u2019re seeing yields at the moment for housing and units combined somewhere around 5.5%, so they\u2019ve come back a little bit, as well. Average housing at the moment, around $550 for an apartment, somewhere around $400 per week. Vacancy rates are sitting somewhere around 9% and have sat there for probably a good two, three quarters now.<br \/>\n<b>Kevin<\/b>:\u00a0 That\u2019s a pretty big number, isn\u2019t it \u2013 9%?<br \/>\n<b>Korgan<\/b>:\u00a0 Yes. Again, two, three years ago, it was probably less than 50% of that, so we\u2019re facing right now a market where both the values in terms of the volume as well as the actual values have dropped, and equally, on the rental side, we\u2019re seeing vacancy rates up and rental values drop in some instances, Kevin, up to 20%.<br \/>\n<b>Kevin<\/b>:\u00a0 Korgan, what\u2019s on the horizon? Are there any developments coming up, infrastructure projects that are going to enhance the market a little bit?<br \/>\n<b>Korgan:<\/b>\u00a0 There are some positives and some negatives. We\u2019re seeing that the big INPEX gas project brought a lot of confidence back into our market a few years ago. That\u2019s within 12 months of shifting from the construction phase to the ongoing maintenance phase, so that will, we believe, have an impact on the market within the next 12 months.<br \/>\nWe have a local election within a few months, so what we\u2019re anticipating is that the government might roll out some spending to bolster up the market and the economy. One of the most significant changes that, as an industry, we\u2019d like to see is the shift from first-home owner\u2019s grant being directed towards new dwellings only to established, and I think that will make a significant impact in improving the status of the market.<br \/>\n<b>Kevin:<\/b>\u00a0 Just to round out our chat, Korgan, best places to buy right now in Darwin? If I had some money in my back pocket, where should I invest?<br \/>\n<b>Korgan<\/b>:\u00a0 I think probably the northern suburbs right now would be the place to be investing in or both investing or buying a home within. There\u2019s good value there. Certain parts, despite the challenging market conditions, are still holding values to some degree. Probably two areas that I would pick would be Jingili and Leanyer. Average house prices are probably a touch over $600,000, mid-$600,000 in both those areas, and I think they\u2019re probably the places to be looking at in Darwin.<br \/>\n<b>Kevin<\/b>:\u00a0 Very sobering, but thank you for your insight there. Korgan Hucent from Ray White Bayside in Darwin.<br \/>\nKorgan, once again, great talking to you mate, and thanks for your time.<br \/>\n<b>Korgan<\/b>:\u00a0 Thanks again, Kevin.<br \/>\n&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Korgen Hucent gives us a sobering report on the Northern Territory and that the oversupply is bringing a whole different type of investor into that market.\u00a0\u00a0 He tells us about the new challenge property owners are facing. Transcript: Kevin:\u00a0 Let\u2019s go from one end&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":20883,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,10,11,13,22,27],"tags":[101],"class_list":["post-7778","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-research-topic","category-trends-topic","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Challenge facing NT property owners - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/challenge-facing-nt-property-owners\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Challenge facing NT property owners - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Korgen Hucent gives us a sobering report on the Northern Territory and that the oversupply is bringing a whole different type of investor into that market.\u00a0\u00a0 He tells us about the new challenge property owners are facing. 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