Buyer’s market offers opportunities for investors

With property values in Darwin easing, investors have a good chance to buy at a reasonable price, with potential for both solid growth and strong rental returns. It is just a matter of choosing the right strategy

Despite what the top-line numbers say, Darwin’s local economy remains solid and continues to attract young professionals to the city. 

“There is plenty of work up here,” says Adam Hayes, CEO of Call2View Real Estate. “If people say you can’t get a job in Darwin, they haven’t been looking. 

“We’ve got the gas industry, construction, tourism, defence, and government is quite a big employer up here as well. Darwin is also the gateway to Asia, our biggest trading partner.”

According to the latest CommSec State of the States report, the NT has the strongest job market in Australia, with an unemployment rate of 4.3% on trend terms. But investors have to be careful in deciding what they want to achieve from their investments, which should influence where and what they decide to purchase.

A major benefit for investors targeting young professionals (and retirees) is that apartments in the cities offer high rental returns, says Hayes. Units in Darwin City have a high gross rental yield of 7%, and another inner suburb, Larrakeyah, has a yield of 6%, says CoreLogic RP Data.

“The inner city is where all the office buildings, restaurants and nightlife are,” says Hayes. But he adds that families are more interested in traditional house blocks in Palmerston and the northern suburbs.

“Those traditional house blocks might get a lower rate of return, but they have probably got a better capital appreciation outlook,” says Hayes.

Palmerston houses in suburbs such as Driver, Gray and Moulden have average annual growth rates of 10.2%, 10.5% and 11% respectively. 

Hayes says Darwin is definitely a buyer’s market at the moment. “We are starting to see the return of investors,” says Hayes.

“I think Sydney and Melbourne prices are soaring and we are getting people looking for more affordable options.

“I do think we will see more investors coming back into the market because we have a big gas plant up here under construction.”

The most recent Deloitte Access Economics Business Outlook report says the fall in the Australian dollar is doing good things for tourism in the Top End, where latest data indicate that both domestic and international visitor arrivals to NT are up strongly over the past year.

Meanwhile, it says some of Darwin’s challenges include slowing population growth and the fact that the NT will need a new growth driver for the long term.  Despite the potential around the Greater Sunrise LNG project, it isn’t clear what that longer-term growth driver will be.


Stuart Park: Best of both worlds

Stuart Park benefits from being on the footstep of the Darwin CBD, while being mainly residential with plenty of parks and trees. Consequently, it’s a popular spot for families as well as young professionals, students and retirees.

The mix of residential living ranges from new stylish apartment blocks to large family homes, and access to a swimming pool is always a drawcard.

Residents love this suburb due to its natural feel, tranquillity and safety – not to mention the big bonus of living right next to the sea, with some properties boasting stunning water views.

As prices have dropped slightly in the past 12 months, investors have the chance to buy towards the bottom of the market. They will also benefit from strong rental yields of 6%, according to CoreLogic RP Data.

Stuart Park also has a cheaper median price for units than neighbours Parap and Fannie Bay, where it is commonly in excess of $600,0000. But residents are still within minutes of the best features of surrounding suburbs, such as the popular Parap Village Market, one of Darwin’s longest-running markets.

Modern three-bedroom units on Dinah Court and Tipperary Court can be picked up for $500,000–$550,000. They offer a waterside lifestyle while being minutes from the Darwin CBD and within walking distance of shops, sporting ovals, cafes and restaurants.