Interstate investors are starting to pay attention to Darwin’s property market, potentially leading to the next growth phase, according to an expert.
General Manager of Raine & Horne Darwin, Glenn Grantham, said Darwin had been lagging the major capital cities, but that could be about to change.
“Darwin is the only capital that has yet to experience a boom cycle, but that said, we have pockets where properties are recording significantly higher prices than in the middle of 2022,” Mr Grantham said.
“One such example is an apartment block at 5 Cardona Court, Darwin City, where one unit sold for $305,000 in mid-2022, while another is now under contract for $450,000 – an increase of approximately 35 per cent within 18 months.”
Mr Grantham said Darwin had been on the verge of significant growth for some time and investors couldn’t ignore it any longer.
“Both capital growth and attractive rental yields drive the demand for properties in Darwin,” he said.
“Don’t forget we lead the pack for gross yields with our average nudging 7 per cent, and as our market continues to evolve, we anticipate heightened investor interest, putting further pressure on prices across the board.”
He said Darwin’s market dynamics were unique.
“They are characterised by a relatively small inventory of properties compared to the bigger southern capital cities and fluctuating demand,” he said.
“Even a slight shift in buyer interest can significantly impact property prices.
“With only a thousand properties on the market at any given time, even a marginal increase in demand can result in notable price hikes.”
Mr Grantham said that even if the city attracted a small percentage of the buyers looking at the Sydney, Brisbane and Melbourne markets, there wouldn’t be enough properties to satisfy this demand.
Recent trends suggested a reluctance among sellers in Darwin to list their properties, with many anticipating further price increases soon, he said.
According to data from Raine & Horne, listings experienced a 40 per cent decline year-on-year in February.
Some potential sellers delayed listing their properties until later in the year, banking on the expectation of higher prices supported by positive economic indicators.
According to Mr Grantham, these indicators include decreased unemployment, stable interest rates, and growing consumer confidence.
“Furthermore, local infrastructure projects such as the expansion of the Santos Barossa Basin and sideline ventures like the CDU campus, expected to accommodate up to 7,000 students and workers in Darwin, are predicted to drive population growth and employment opportunities in the Northern Territory,” he said.
“In combination, these projects can potentially fuel demand for housing in Darwin further and push up values.”
