Katherine is a regional centre with a population of approximately 10,000 people located on the Katherine River about 320 kilometres south of Darwin. The town is a service and retail centre for the surrounding pastoral and horticulture industries and aboriginal communities with both State and Commonwealth agencies based there. The town is also home to the headquarters of three major local government authorities, being Katherine Town Council, Roper Gulf Shire Council and Victoria Daly Shire Council.
Katherine is a major tourist destination in its own right, with attractions including the Katherine Gorge and Cutta Cutta Caves with additional attractions such as Edith Falls and Mataranka Hot Springs within easy day commuting distance. The Ghan has a four hour stopover in Katherine to allow visits to see the Katherine attractions.
Katherine also provides local services for the Tindal Air Force base, located to the south of the town. Pine Creek, located approximately 90 kilometres north of Katherine, is the focal point of local mining activity and provides an economic stimulus to the town of Katherine in serving the mining industry.
Traditionally the Katherine commercial and industrial market is small and it is difficult to analyse any firm trends. In recent history, the town has shown a relatively stagnant commercial & industrial market with little movement in commercial property values and rental levels other than by CPI adjustment which is the norm for most current leases in the town. This stagnant period or cycle in the market continues in the commercial market with few sales over the past 2 years. The industrial market is a little better with a positive response to the NT Government sale of six industrial lots in late 2013, and several new developments completed in Emungalan Road in the last two years. The Land Development Corporation is also currently investigating the feasibility of establishing the Katherine Industrial Precinct and Transport Hub on land adjoining the Railway Precinct off the Victoria Highway. Stage 1 of the current proposal could see the release of up to 16 new industrial lots in the short to medium term.
The Katherine residential market has continued to be buoyed by a steady demand for residential rental accommodation although the demand has dropped off over the past six months. Two bedroom units currently rent for $350 to $400 per week for the older stock with new 2 bedroom and 3 bedroom townhouses recently let within the range of $500 to $550 per week. Three bedroom dwellings rent for $400 to $450 per week for older stock and newer, better quality 3 and 4 bedroom dwellings rent from $500 to $650 per week, with demand coming from both the private and Government sectors. The excesses of the accommodation shortage in early 2014, where rents of up to $750 per week for the superior quality 4b2b houses were obtained, have however now eased with these rents dropping back to about $600 to $650 per week.
In the 12 months to the end of December 2014 there were a total of 87 house sales which was a decrease from the 106 of the previous year, reflecting a significant downturn in sales volume particularly in the mid-year. This trend has continued into 2015 with agents reporting very limited sales activity since January. This is evidenced by the fact that there were only 15 recorded sales for the March quarter and 11 sales during the June quarter.
Recent sales within the Katherine Rural area have generally indicated that there continues to be demand for good quality rural residential properties particularly within 10 km proximity to the town area and priced at below $600K. The most recent evidence points to a similar slight reduction in values in the order of 5% to 10% with purchasers able to negotiate discounts particularly where buildings are not fully certified. The demand for rural residential property is however significantly smaller than for the town blocks and selling periods in the rural areas are a bit longer with a 3 to 4 month selling period being the norm.
A period of very limited residential development also appears to have come to an end with the release of land in Katherine East for residential subdivision. Stage 1 of the Casuarina Park Estate involving some 67 lots is nearing completion with contracts in place for a significant number of the lots to date.
Notwithstanding the above evidence of optimism within the marketplace, some measure of caution should be adhered to, as there is still some vacant commercial space within the town. Regional sales throughout the NT have been relatively scarce and we are of the opinion that investment yields, as has been the case historically, would remain above those achievable in major centres such as Darwin and Palmerston.