Journalists: Alicia Perera and Myles Houlbrook-Walk.
When Darwin couple Leslie and Sylvia Green started looking for an investment property in order to eventually downsize, they did not expect to find it in only a matter of weeks.
It took just two more weeks to secure a tenant.
“[It’s been] amazingly quick,” Mr Green said.
“Everything’s worked for us.”
According to figures released by property data provider CoreLogic this month, Darwin is the only capital city in Australia where dwelling values are rising.
Capital city prices dropped 1.6 per cent nationally in August, in the biggest decline since 1983.
Darwin bucked the trend, with values up 0.9 per cent for the month.
It also saw the strongest quarterly growth of any capital at 2.3 per cent, with Adelaide and Perth the only others to record increases.
And yet the data shows that Darwin remains the most affordable capital to buy – a title it has held for several years – with a median dwelling value of $512,531.
Darwin real estate agent Derek Hart said those conditions meant the local market was “absolutely booming” at the moment.
“It’s been the best I’ve seen in 14 years of selling, where you’re getting more sales, more activity all through the market,” he said.
‘An investor’s dream’
With rising rents and more affordable properties compared to other capitals, experts say the situation is a boon for investors.
CoreLogic head of residential research Eliza Owen said the city was attracting strong investor interest, including from interstate, with units especially in demand.
“It’s kind of an investor’s dream – to not only be getting capital growth in the value of the home, but rising rental income from that home as well,” she said.
Mr Hart said conditions were also good for buyers.
“Those first-home buyers … they know that their rent is going to go up, so [they think] ‘let’s get into the market [and] stop paying someone else’s mortgage’,” he said.
The Greens agreed, saying while they had been thinking about downsizing for some time, the current state of the market had influenced their decision to buy now.
“The interest rate is really poor, the rental market here is still very good, so the sensible thing was to buy something,” Ms Green said.
“It made a lot of practical, common sense, to do this now.”
Pressure grows on renters
The trends are not good news for everyone.
As rents and sales prices continue to grow, experts say renters and prospective buyers at the lower end of the market are struggling to keep up.
Mike Byrne, regional coordinator with affordable housing peak body NT Shelter, said Darwin renters were being squeezed with price hikes of up to $100 a week or $150 a fortnight.
Combined with other cost-of-living increases, he said soaring rental values were cutting into some people’s emergency savings.
“It’s more affordable compared to other states, but that doesn’t mean it’s affordable. It just means it’s not the worst,” he said.
“A lot of people are paying over 40 per cent, 50 per cent of their income just to have a roof.”
And there is little relief in sight for renters.
CoreLogic head of research Tim Lawless said Darwin’s rents were rising at 6 to 7 per cent per annum, and so far showed no sign of slowing down.
“Vacancy rates are around the 1 per cent mark, and chances are, as we see overseas migration picking up … we probably will start to see rents rising even further from here,” he said.
“So for tenants, it’s not great news.”
More growth forecast
With some major infrastructure projects in the pipeline and a growing population, experts predict that rather than following other capitals into price decline, Darwin property values should keep rising or hold steady in coming months.
“I think it will be the case the Darwin marketplace does hold reasonably firm and outperforms the rest of the capital cities,” Mr Lawless said.
“It’s not uncommon for Darwin to be a counter-cyclical market. Previously housing values were falling where most other regions around the country were recording rises in values.
“Now it’s completely the opposite, and we are seeing Darwin housing values still rising, while most of the country is recording a fall in values.”
As they finish the renovations at their new property in Moil, the Greens have the same outlook.
“Everything’s selling around here, and there’s a queue for rentals,” Ms Green said.
“I think it’s a good time to buy.
“I don’t see Darwin going down.”
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