Pine Gap employees must now rent or buy their own accommodation, leading to the spike. (Supplied: Kristian Laemmle-Ruff)
While Darwin grapples with the nation’s weakest capital city real estate market, house prices in Alice Springs are on the up-and-up, with rental yields among the strongest in the country.
According to real estate agents, that can be partly attributed to changes at Pine Gap — a renowned secret American spy base — where employees used to have their housing supplied.
Now they must rent or buy their own accommodation — and that is driving up the market.
“We’ve seen probably a 37 per cent increase in the total number of house sales,” said Andrew Doyle from the Real Estate Institute of the Northern Territory.
“The majority of that has been the last six months of 2017 and that’s continued on into 2018.”
Current market data indicates the median house price has increased to $500,000 (compared to $482,500 in 2017), while the median unit price is tipping $348,000 — an increase of more than $25,000 on last year.
The change in housing provision means Pine Gap employees are entering the market, many for the first time.
So too is Pine Gap’s ageing housing stock.
“Over the last six to 12 months a greater number of Department of Defence houses have come onto the market,” Mr Doyle said.
“They’re well maintained three and four-bedroom houses that have been providing accommodation to US and Australian employees out at Pine Gap for the last 40-odd years.”
Pine Gap employees increase demand for ‘mid to upper range’ homes
But Pine Gap will not release all their stock at once. Experts say if they did, it could cause the local real estate market to collapse.
Mr Doyle said rental prices have been going up and vacancies dropping.
“We’ve seen a lot more of the Pine Gap employees coming into the private market, which has seen increased demand, particularly in the mid to upper range,” Mr Doyle said.
“We’re starting to see rental prices starting to sneak up and the demand for housing and units increase.
“We’ve seen the vacancy rate come back from about 5.5 per cent down to under 3 per cent.”
But US citizens who wish to buy into the Australian market will have to provide a greater deposit compared to their Australian counterparts.
“They do have to meet the foreign investment review criteria, and the main one is that they must have 30 per cent deposit in cash to come up with if they’re looking to acquire an Australian property,” Mr Doyle said.