Darwin’s property market performed "well beyond expectations" over the first half of the year, according to the latest report from Herron Todd White (HTW). Are investors already taking advantage of the city's booming environment?
Jeremy Callan, a property valuer at HTW, said Darwin recorded substantial lift in dwelling prices over the recent month.
Citing figure from CoreLogic, Callan said Darwin posted a 20.3% annual growth in house values in June, representing the strongest performance of any capital city in Australia over the period.
"The greater Darwin market is seeing increases in housing value, shorter days on market, an increase in weekly rental rates and a decrease in vacancy rates. These large increases in value must be tempered by a reminder that the Northern Territory is starting from a far lower base than other states, with five or so years of continued decline in property values and business confidence," he said.
Three factors are driving the housing boom in Darwin: population, stimulus packages, and renewed confidence. Callan said Darwin served as a “haven” amid the national lockdowns, with many southerners relocating to the city.
"Given the small population base, the extra thousands who came north provided an immediate upswing in the rental market. This has now flowed into more permanent residents in the Northern Territory, especially looking to take advantage of lifestyle opportunities and the relatively low house prices," he said.
It appears, however, that investors have yet to cash in on this boom, as owner-occupiers still dominate the housing market. Investors in Darwin are traditionally inter-state buyers targeting the unit market. Callan believes that the very strong rental market and the availability of relatively cheap units in the city could potentially lure in investors eventually.
"While the stimulus packages for new builds and stamp duty concessions are being wound back, it is expected that the positive movements of the Greater Darwin market will continue. The forward pipeline of construction, mining and gas and infrastructure projects has placed the Northern Territory in a positive frame for the first time in a good while," Callan said.