There is plenty of competition in the pipeline for the Darwin real estate market after energy giant Santos approved a major offshore gas development near the Northern Territory’s capital.
The $5 billion Barossa Gas Project, which will be 300km north of Darwin, is the most extensive resource project since INPEX’s Ichthys project a decade ago.
That project inspired a real estate boom in the Top End and Raine & Horne Darwin General Manager Glenn Grantham is tipping similarly hot demand in the region following the Santos announcement.
Mr Grantham predicted the $5 billion project could result in real estate price growth as high as 20 per cent in 2021 and then annualised growth of five to eight per cent over the two decades of its operation, as interstate investors return to the local market.
According to the Northern Territory Government, the project will deliver hundreds of jobs over the course of the next two decades, with 600 new positions created during construction.
The project is also forecast to provide 350 permanent positions in Darwin for the next 20 years, with an estimated $2.5 billion worth of wages and contracts expected to flow for Territorians.
Mr Grantham said the project would provide economic sustainability to the city and drive investor interest in Darwin real estate.
“This is the announcement we’ve all been waiting for, and it should create increased market confidence in Darwin property over the next few years,” he said.
“Unlike the announcement of the INPEX Ichthys project in 2010, the Darwin market is already under stress thanks to the NT Government’s handling of the COVID-19 pandemic.
“In 2010, the INPEX project created the stress on the Darwin property market. This announcement has hit the market that is already in stress and is struggling to meet buyer and tenant demand.”
According to Mr Grantham, since the Northern Territory reopened its borders to other states in July last year, more than 10,000 people have relocated to the NT, “which has put massive pressure on our sales and rental markets”.
To date, most of the buying activity has involved owner-occupiers, but he said the Barossa project would lure investors back to Darwin.
“We expect investors to rush into the Darwin market before our prices go on a run as they did a decade ago,” he said.
Mr Grantham welcomed the news that current and future staff working on the project would be encouraged to live and work in the Top End rather than operate on a fly-in and fly-out basis.
“While many of these workers will end up staying in Darwin permanently, our experience from the INPEX projects is that plenty will only remain for the period of their contract,” he said.
“Consequently, savvy interstate investors will enter the market due to the prospect of a unique mix of decent yields and long-term growth.
“This investor activity will add plenty of fuel to an already overheated market.”