Rental growth through the roof
Darwin property prices are increasing at a time when neighbouring states are floundering and rental returns are amongst the highest in the country, and it’s not tipped to change any time soon
Our nation’s northernmost capital city is in the unique position of holding a number of ace cards, that all but guarantee its growth and prosperity over the coming years.
With a booming economy, growing population, low land supply and diverse employment nodes, boosted by a healthy resources industry, the city of Darwin wants for little… except, perhaps, some more affordable housing options.
The city’s rising rents are cause for celebration for investors, but cause for concern for local residents. Even Real Estate Institute of NT chief executive Quentin Killian admits that the lack of affordable rentals in Darwin is a serious problem, with a definite “under supply of properties in the lower price ranges”.
“We need to start bringing people back into the city and the northern suburbs, and we need more apartments for the younger generation,” Killian says, pointing out that supply and demand issues are likely to continue throughout 2013.
“More and more people are coming to town for the economic activity,” he adds. “No other capital city (in Australia) is showing the level of growth that we are facing, and will be facing, for the next 10 years.”
NT’s economic activity “highest in the nation”
There’s only one state in the country that is performing better than NT from an economic perspective, and that is WA, according to a new report by CommSec.
Their most recent quarterly report ranked the Territory as second highest for retail spending, up 21% on the 10- year average, while overall economic activity is a massive 48% higher than the decade average.
Business Minister Peter Chandler says robust oil gas projects, particularly INPEX, were driving activity, which is predicted to continue for the foreseeable future: “Construction will be an ongoing driver,” Chandler confirms, “as the project work progresses.”
Indeed, INPEX Chairman Naoki Kuroda says the Ichthys Project, which constitutes “one of the world’s largest LNG facilities”, is based on an estimated 40 years of gas and condensate reserves from the Browse Basin, offshore Western Australia.
It will pump $3.5bn into the Australian economy each year of construction, and requires around 2,700 workers during peak construction, with another 300 ongoing jobs once it is complete and operational
A northern suburb of Darwin located around 8km from the CBD, Nightcliff is home to around 3,400 Australians.
Nightcliff’s high-rise apartment blocks command spectacular views out to sea, which is partly why local agent Joanne Griffiths from One Real Estate says the area is one of the most popular in all of Darwin. Another factor in its favour? The neighbourhood’s large blocks of land which are ripe for development.
“Nightcliff is an older area and the block sizes are massive, which makes it attractive for subdivision down the track. A lot of clients who have bought in the area buy to renovate or just to hold onto, because they really are big blocks,” Griffiths explains.
“A lot of people in the area have owned properties for a long time and with the recent growth in the property market here, their returns have been phenomenal.”
Nightcliff boasts loads of amenities to suit different target markets – “Everything from private and public schools to the boardwalk, shopping centres and weekly markets,” Griffiths adds – and it’s coastal location means you never far from the beach.
Here, you’ll find traditional houses on big tropical blocks adjacent to high-rise buildings and apartment blocks, meaning there are property types and price points to suit all buyers.
“Nightcliff is really popular with the locals, which is good from a rental return perspective, as it’s the spot that most people want to move to,” Griffiths adds.
“There’s also lots of new development happening and there’s a real sense of rejuvenation going on at the moment.”
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