There are positive signs for the active home sales market in Darwin heading into the end of 2020, according to the latest market analysis from Herron Todd White (HTW).
Property sentiment in Darwin is strong, with many agents reporting increasing numbers of potential purchasers, said Will Johnson, Northern Territory local expert at HTW.
"The volume of sales appears to be increasing, although pricing remains static. This can be attributed to several factors, one being Darwin is considered quite close if not at the bottom of the property price cycle," he said.
While the medium- to long-term impacts of the robust market activity on capital growth remain to be seen, Johnson said Darwin is expecting to finish the year strong.
Darwin and the whole Northern Territory have been less affected by the COVID-19 outbreak compared to other southern states, Johnson said. Still, the state's local economy has suffered considerably due to the slowdown in the tourism sector.
Despite the uncertainty, Darwin remains a top spot, especially for local investors due to its strong rental returns.
"A consistent downturn over the past four years has led to what many property professionals are considering the bottom of the market and offers potential purchasers not only strong returns but the possibility of capital growth," Johnson said.
Established dwellings make up majority of Darwin's property market, with local investors dominating the segment. The market has a high gross rental yield of up to 4.7%, particularly in the northern suburbs. This is higher than the gross rental yields in Sydney, which were only at 2.4%.
Units, however, remain the more affordable investment option for investors. While gross rental yields are higher in this segment, investors must consider additional expenses like the body corporate fees.
"Looking to the short and medium term, Darwin still provides opportunities for investors to put their money in property. Whilst capital growth may be some time in the future, recent signs of strong purchasing activity are positive signs," Johnson said.
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