Real estate market ‘crashing and burning’

p2214-real-estate-generic

A scene from the boom times …

 

By ERWIN CHLANDA

 

The real estate market is “crashing and burning” at least in part because of the NT Government’s restriction of its grants for new home buyers to new dwellings.

 

This is the view of a prominent local real estate agent who spoke to the Alice Springs News Online on the condition of not being named.

 

A second one, Eli Melky, says this firm, Golden Homes, has so far this year received just one application under the First Home Owner Grant (FHOG) scheme.

 

In the last quarter of 2014, when the grant was available for existing homes as well, he had about 15 applications.

 

As of January 1 FHOG provides $26,000 for new homes, nothing for for established homes.

 

Until December 31 established homes in the urban area qualified for $12,000, and elsewhere for $25,000.

 

Mr Melky says he is now making a resolute bid for more market share, employing six new staff, “to fight for the scraps”.

 

Industry sources say the changes to the grants play into the hands of builders and developers of new homes, while vendors of existing homes are disadvantaged.

 

First home buyers are copping a double whammy: Cutting out part of the grant scheme on December 31 may be an incentive to increase the price of new homes.

 

Mr Melky says it seems Chief Minister Adam Giles is giving the new Kilgariff suburb – a pet project of his – a shot in the arm as buyer interest in that development is less keen than anticipated.

 

The News has asked the government for its latest NT Land and Property Transfer Report. So far the Registrar General is denying us access to it.

 

[We are seeking further comment and are likely to be updating this report tomorrow.]

 

 

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8 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Market is Realistic
    Posted February 21, 2015 at 3:53 pm

    Our ex-government 3 bedroom, 1 bathroom and single toilet Desert Dwelling (the old H or U shaped government houses) was valued at $500,000 at the end of 2008.
    It’s real price is $400,000 – $425,000. I don’t have a problem with that, especially as we bought it at a realistic price over a decade earlier.

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  2. Daniel Davis
    Posted February 19, 2015 at 5:16 pm

    @Melanie Ross: Ah Melanie, and here I was thinking you were a bit of a socialist, but lo and behold, out comes the capitalist greed in you.
    Values have not been dropping significantly for the last two years but the market has been flat. The median house price for a three bedroom house has sat around the $400,000 mark. I would point people to the REINT quarterly publication (RELM) for the stats.
    For some time real estate agents have been listing significantly above realistic sale prices, and this has created an inflated expectation of people’s housing values. This has been reflected in the average days on market statistic which currently sits at around 130. For comparison Darwin and suburbs sit around 80.
    It’s a damned if you do, damned if you don’t situation for any government, if housing costs remain high people complain they can’t afford housing, if housing values drop people complain that their investment has lost value.
    It will certainly be interesting to see what has happened in the first quarter of this year.

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  3. Melanie Ross
    Posted February 19, 2015 at 1:36 pm

    I have lost $15,000 off the price of my house in the past 12 months. This is my family’s major asset and prime investment.
    The value of my home has dropped but the cost of living keeps skyrocketing – nasty shock with my latest power and water bills, food costs keep increasing, it goes on.
    How exactly is this “good news for the town”?
    The only ones who seem to be benefiting from this ill thought out First Home Owner changes are the builders and developers of the ticky tacky units going up.
    It seems this change in the First Home Owners scheme was brought in to help developer mates rather than the wider Alice population.

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  4. Janet Brown
    Posted February 19, 2015 at 10:36 am

    I am so tired of the greed in the Territory being supported by the Department of Housing.
    There is nothing stopping our government departments to change their policies and allow single income or casual and part time partners who are with full time employee families to rent.
    There has been a large number of houses sold off and there is also a large number of houses empty in Alice Springs.
    And the rumour is that a big group is going to be auctioned off.
    Not good for new home owners to buy and not sure who is going to buy them.
    The last lots put to auction where difficult to sell.
    We have as Daniel said issues in town with getting and holding staff.
    Adam, time to bring in the big bosses of some of your government departments and find out what the hell is going on.
    My personal opinion they are doing and implementing actions to bring the CLP government down and discredit you.
    Dept of Housing is dysfunctional and staffing issues are a major issue.
    That to me speaks volumes of poor or no management.

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  5. Roger W Miller
    Posted February 19, 2015 at 9:23 am

    Denied access to a report is a familiar theme for the last two years in many categories.
    If the infamous “renewable management board” report is still secret I doubt that any information will be forthcoming from any reports, including the current overdue Hawke report on fracking.

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  6. Sean
    Posted February 19, 2015 at 7:29 am

    Rather than chasing the Government for the stats that prove your story to be factual Erwin, get a copy of the Dec RELM from the REINT.
    It shows all the figures Territory wide. It demonstrates the market has done more than “ease”.
    I’ll also tip / suggest the worst of the dip is yet to come in the March and June quarters.

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  7. Fred
    Posted February 19, 2015 at 6:42 am

    This is a sign of the future. Grants or not, there was bound to be a slowdown. It is happening all around Australia. Just need to keep positive, Alice.

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  8. Daniel Davis
    Posted February 18, 2015 at 9:15 pm

    The market is not quite “crashing and burning” but has eased significantly from the heights of 09-10.
    Although not financially great for those of us who own property in town in the short term (especially those who bought at the top of the market) this is good news for the town.
    The unfortunate reality of the last few years with high cost of housing is that businesses cannot find staff, renters leave town and new entrants to the housing market struggle to get a foot in the door.
    As cost of living pressures ease and new housing comes online, Alice can once again start looking towards a prosperous future.
    Of course the real estate agents will be unhappy and predict doom and gloom. The easy money they’ve gotten used to will be gone and, as Eli has stated, they’ll be forced to fight hard for market share.

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