It’s been a market that has seen more than its fair share of struggles in recent years, but one real estate franchise is predicting somewhat of a revival for Darwin
While investors may have been put off from venturing into the Northern Territory as the mining boom continues to wind down, one real estate professional in the city is predicting a surge in sales volumes this year.
“There's already increased interstate activity at the coal face and this is translating to more contracts,” Glenn Grantham, general manager of Raine & Horne Darwin, said.
“Darwin, however, is a small capital city property market and we still need one more major announcement relating to the economy, an infrastructure development or more government jobs, to attract even more investors from the southern states,” Grantham said.
A poor performer in terms of capital growth in recent years, Grantham believes the fact that Darwin’s rental yields of 5.3% for houses and 5.1% for units compares favourably with the national capital averages of 3.4% and 4.3% will prove attractive to investors.
A new initiative from the Northern Territory government, aimed at attracting emergency services and hospital workers, will also provide landlords with greater security in terms of their rental returns
“Through the Home Buyer Initiative, the government guarantees investors a head lease rate starting at $550 a week. It's guaranteed for 52 weeks of the year for ten years, with CPI increases annually,” Grantham said.
“The scheme is designed to stimulate accommodation opportunities for those working in the NT's hospital and emergency services sector and to make it affordable for them to live and work here.”
Under the terms of the scheme, the tenant pays a percentage of the weekly rent and the balance is made up by the government and returns from a property secured through NT's Home Buyer Initiative are locked in regardless of what occurs in the wider real estate market
“If a tenant pays a rent of $450 a week in the first year, the government will top up the rent with an additional $100 to bring it up to the agreed amount of $550,” Grantham said
“In Eclipse (a development featuring 30 two-bedroom apartments), prices range from $460,000 for a ground floor apartment to $480,000 for a second floor unit. Yet the rent paid to the owner will be $550 a week regardless of the floor they choose to buy an apartment on.”
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