Bunking down in Darwin no longer cheap

Sharing a room in a dusty top end does not come cheap anymore.

According to flat-sharing website Easyroommate.com, Darwin rates as the second most expensive city to flat share, with Alice Springs ranking fourth

Average monthly flat share rentals in Darwin have risen to $867 per room, with only Sydney at $910 more expensive. The average monthly rate for in Alice Springs stands at $750 per room, more expensive than Melbourne, Perth and Brisbane.

On average, flat sharers in the Northern Territory pay $808 per month compared with just $553 a month in Victoria, the cheapest flat-share market.

The Northern Territory figure is up on $779 recorded in July last year.

Demand for flat-sharing accommodation in the Northern Territory has driven up prices due to extremely low vacancy rates and the high cost of property.

SQM Research calculates the vacancy rate in Darwin at 1.2%, with just 282 vacancies in all properties, compared with 317 in the previous month. Nationally the residential vacancy rate stands at 1.9%.

While the high prices may be disappointing for those looking to share a flat, the news will be encouraging for Darwin investors. According to RP Data the NT capital is already delivering the best rental returns in capital city markets.

Rental yields on Darwin houses stand at 5.2%, compared with 4.2% nationally, and at 5.6% for units, compared with 4.9% nationally.

The gap between the Northern Territory and the rest of Australia is significant – on average it is $137 more expensive to flat share in the territory than in Western Australia ($672) and $159 more expensive than in NSW ($650).

Melbourne’s vacancy rate of 2.8%, more than double Darwin’s, contributes to its relatively cheap flat share accommodation, according to SQM Research.

Major Cities and Towns

State

Monthly average rent Per Room

Sydney

NSW

$910

Darwin

NT

$867

Canberra

ACT

$790

Alice Springs

NT

$750

Melbourne

VIC

$693

Perth

WA

$693

Gold Coast

QLD

$672

Brisbane

QLD

$667

Hobart

TAS

$650

Newcastle

NSW

$650

Sunshine Coast

QLD

$650

Adelaide

SA

$607

Cairns

QLD

$600

Source: Easyroommate

Michal Nowak, country manager for Easyroommate, says the rental demand in the Northern Territory, especially in Darwin, has caused prices to reach levels far higher than other states.

“Accommodation demand is outstripping supply across the country, but it is particularly acute in Darwin and hence why the rental costs are so high there.

“Since the beginning of the economic downturn many prospective tenants and frustrated buyers are choosing to rent rooms to lower their outgoings and make substantial savings towards a future house deposit,” he says.

However, home owners are renting out spare rooms as another revenue channel to supplement income.

The research found rentals in Queensland’s major cities and towns to be cheaper than those in the Northern Territory and Western Australia, partly due to the lower impact the rental squeeze has had on the Sunshine State.

In the battle of the big two – Sydney and Melbourne – the research highlights a huge difference in average monthly rental costs.  Melbourne (at $693) has average rental costs of $200 less per month than Sydney ($910).

Adelaide and Cairns have the cheapest average monthly rents at $607 and $600 respectively.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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