General Market Overview
Darwin is the capital of Australia's Northern Territory and Australia's Northern-most city. This city acts as Australia's gateway to Asia, potentially opening up numerous business opportunities throughout the region.
The Norther Territory Government has been developing business relationships throughout the region since the late 1970's. These relationships have been developed over time with the Governments of Malaysia, Phillipines, Brunei, Indonesia, Singapore and China. A number of these countries have signed Memorandums of Understanding, strengthening the business commitment between them and the Northern Territory.
Darwin is stratigially located, which makes it the natural entrance to Australia. The famous Darwin Harbour is one of Australia's largest harbours and Australia's Norther most port, taking full advantage of the increased Asian interest in Australia.
Australian investment and trade with Asian nations continues to increase, and Darwin is important nationally and internationally. The economy of the city will benefit from any such increased activity, and the benefits should be more diverse, creating a stronger and larger economy.
The first direct flights from China have just commenced and it is expected to create enormous benefits for tourism but also further strengthen and increase trade. The new service will enable stronger trade links to develop between Shenzhen and Darwin. China is the Northern Territory's largest trading partner. In the last calendar year alone trade between China and the Territory totalled $2.06 billion - including exports worth $1.93 billion.
As Asia continues to develop (in particular East Timor and Indonesia) there is the potential for many of the required services to be provided from Darwin. The stability of the Australian and Northern Territory governments is also an important factor for consideration in locating any businesses servicing the Asian region in Darwin.
Joint ventures between Australian and Asian companies within the Northern Territory are expected to increase. "Spin -off" activity in Darwin in the areas of finance, transport, legal, business services and infrastructure is expected to follow. These factors along with a rebounding population growth, increased tourism activity and Darwin's central location as 'The Gateway to Asia' provide the basis for strong and strategic investment in and around Darwin.
The Darwin investment market is currently experiencing stronger interest as a direct result of the Northern Territory's future economic growth prospects due to the Oil and Gas and Resource sectors. This is coupled with the increase in Defence activity North of Australia including the recent decision by the U.S to station 2500 troops in Darwin on a permanent basis. With yields for investment stock dropping in other capital cities. Darwin is becoming more attractive to non-institutional investors.
The residential property market continues to grow in Darwin as the city areas become more of a focal point for a young local population. There is also a demand from people seeking residential lots of manageable size but larger than those traditionally available in the city areas.
While demand for one and two bedroom apartments has declined recently following a large uptake following the commencement of the INPEX Gas project, the top end of the market has been steady in recent months.
Residential yields have held up well and generally range between 5 - 5.5% across the range of property types, although yields are somewhat less for larger or prestige rental properties. Demand has softened in the past 12 months, although this has not had a major effect on yields thus far.
The property industry is anticipating major changes and strong growth prospects, particularly on the back of two major projects, being the development of the Oil and Gas Industry in the Timor Sea and the development of an onshore oil and gas supply base close to Darwin.
In addition, the Norther Territory has experienced a build-up of the defence forces in the Palmerston region and the resulting benefits that have flowed on from this on-going growth. This project has injected over $850 million into the Northern Territory economy over the last seven years with significant additional defence infrastructure spending planned for the next three years.
The Inpex final investment decision was made on January 13th, 2012. This project is estimated to be worth in excess of $50 Billion and created over 4,000 full time jobs at the peak of construction in 2016. The Ichthys gas field which is the driver behind the project has an estimated life of 40 years. The site as Blaydin Point will have the capacity to develop 4 tranes so there is capacity to bring additional LNG on shore to this processing facility. The Inpex project is now transitioning from a construction phase to an operational phase.
The Railway continues to gain momentum with freight volume continue to increase and this is expected to continue into 2020 and beyond.
The Darwin Port is also getting busier and there are plans to further expand the wharf and surrounding areas in 2020 with the extra demands placed on it from projects like Inpex and other mining projects. The NTG has also committed $100m for a ship lift facility at East Arm and Paspaley Group of Companies has been named as the successful tenderer to deliver the project.
Landbridge Lessee of the Darwin Port has also committed to build a new $200m Westin Hotel at the Darwin Waterfront Precinct.
As part of it 2030 Vision for developing the North of Australia the Federal Government has identified those parts of Australia North of the Tropic of Capricorn that span Western Australia, Northern Territory and Queensland as 'the next Frontier of Australia'.
Over many decades Northern Australia has given rise to outstanding resource, agricultural, business, scientific and cultural assets, vibrant and growing communities in some areas and the promise of much more. Nevertheless it remains underutilised relative to the rest of the country despite its natural geographic and strategic assets.
The Tropical region encompasses everything between the Tropic of Cancer and Tropic of Capricorn and includes 40% of the world's population
The rise of these regions, underpinned by a set of global macro-trends will create significant opportunities for Northern Australia to capitalise on its strengths and unlock major economic value. This growth will ultimately create new jobs, greater income and better prospects for all Australians.
The Government has widely discussed the four industry pillars that play to Australia's strengths and have the most potential for growth:
food and agribusiness
resources and energy
tourism and hospitality
To unlock the North's full potential, the Commonwealth Government will address challenges to development by:
making it easier to use natural assets in close consultation with and the support of Indigenous communities
providing a more welcoming investment environment
investing in infrastructure to lower business and household costs
reducing barriers to employ people