Homes up a bit but commercial vacancies 'abnormally high'


p2392-industrial-area-cbdBy ERWIN CHLANDA
Home sales in the December quarter showed a slight improvement while there is insufficient data in the  units market to give any meaningful commentary, and there are “abnormally high” vacancy rates in the retail, commercial and industrial sector which will force sellers to sharpen their pencils.
That’s the view of Doug Fraser, local managing director of L J Hooker, who says house sale numbers increased by 40% and the median sale price by 6.7%.
Both increases are from a very low recent base.
“Although it is still too early to see if there has been a significant shift as a result of First Home Buyers Assistance reintroduced by the new NT government, there are certainly signs that the market has responded favourably to them,” says Mr Fraser.
“There are certainly more attendees at weekend open inspections and the market generally appears to be surrounded by increased optimism.
“Braitling, Stuart and the East Side were the most popular residential areas with 16 sales each.
“The highest prices were for two properties in Baldissera Drive at $975,000 and $925,000, a property in Cavanagh Crescent on the East Side for $971,000, a property in Eagle Court Desert Springs for $859,000 and two more rural properties in Heenan Road and Greatorex Road for $850,000 and $825,000,” says Mr Fraser.
“A brand new unit development in Winnecke Avenue resulted in three sales ranging in price from $579,000 to $597,000.
“The top of the market generally was reasonably active with 25% of the house sales being above $600,000 and 25% of the unit sales above $400,000.
“There was very little activity in the commercial and industrial market during the quarter with the exception of a substantial sale of a light industrial property in Ghan Road for $1.7m.
“There were also a small number of lower priced properties in Priest Street, Smith Street, Kidman Street and Elder Street.
“This segment of the market can best be described as soft at present as there are very few investors in the market,” says Mr Fraser.
“It may well be that commercial property owners have not kept abreast of changes in investor expectations regarding property yields and may need to consider what yields are available in other major regional centres and adjust their expectations accordingly.
“With abnormally high vacancy rates in the retail, commercial and industrial sector, investors will factor vacancies into their calculations when assessing a commercial property acquisition and therefore expect a higher rate of return.”

However, residential vacancy rates continue to fall and there have been slight increases in rents, says Mr Fraser.
“This is healthy for the market as rents and vacancy rates fall into equilibrium. A vacancy rate of between 2.5% and 3.5% means there are still properties available for new arrivals in town but at rents that are attractive for both landlords and tenants.”

p2340-Doug-FraserMr Fraser (at left), in his summer 2016/17 report, describes L J Hooker as “the leading real-estate agency in Alice Springs throughout 2016 in terms of sales volume”.
Statistics supplied by Mr Fraser puts his firm at about 36% of the sales volume. Elders is number two, First National third, Professionals fourth and “others” fifth, with approximate shares of the sales at 28%, 24%, 10% and 1%, respectively.

PHOTO at top: Google Earth image of the industrial area and the CBD, bottom right in the picture.


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