The state of the property market in Darwin does not look much different from how it has been for quite some time, but the 2019 Property Investor Sentiment Survey conducted by Your Investment Property, Property Update and Onthehouse reveals that there are investors hoping for better things from this capital city in the next five years.
The survey revealed that more investors were looking at Darwin than at Canberra, likely because the falling prices have been to buyers’ advantage.
“The September 2019 quarter saw a further fall in the median price of a house in Darwin, dropping by a further 8%,” says Quentin Kilian, CEO of the Real Estate Institute of the NT.
“While that is good news for buyers, for those looking to sell in this market it has taken prices back to the equivalent of March and June 2009, and in the Palmerston market house prices have retreated to the same levels as 2008.”
In that same period, Greater Darwin’s median price fell to March 2007 levels.
“We have a number of people choosing to put their properties into the rental market at present, rather than trying to sell them – which in itself would not be an issue, but this market condition is being driven by a continuous exodus of population from the Top End, and that is an issue,” Kilian explains.
Rental demand has already dropped since the mining downturn began; the Domain Rental Report for Q4 2019 showed that both house and unit rents fell over the year in Darwin. However, the rental market may also be at a turning point, since vacancy rates dropped as well. Darwin’s rental yield remained the highest among the capital cities (5.9% according to CoreLogic’s Home Value Index for December 2019), and the rate at which dwelling values declined was greater than the rate at which rents did.
In its Month in Review for December 2019, Herron Todd White also reported that house and land construction in new estates located within Darwin and Palmerston is creating opportunities in established suburbs. As a result of the NT government’s Build Bonus Grant, market activity is concentrating on land sales and new builds; in turn, properties in established areas are showing greater value for money.
SUBURB TO WATCH
THE GAP: Yields remain on the up
Values are still plummeting in the Alice Springs suburb of The Gap, but rental returns are at a remarkable high.
The yields for houses averaged at 7%, and the rental rate actually increased by 2.1% over the year to October 2019 to hit a median weekly advertised rate of $480.
Meanwhile, unit yields averaged 5.8% and rental rates slipped by 1.4% in the same period to $365 per week.
As a result of falling values, properties have become very affordable in this suburb, with the median prices of houses and units not surpassing $400,000 and the median unit price down to just a little over $250,000.
Yield: Rental returns are very high, at 7% for houses and 5.8% for units
Affordability: The median prices of houses and units are both under $400k
Top Suburbs :
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