Darwin's Palmerston to attract investors due to strong yields: Raine & Horne

Darwin’s satellite suburb of Palmerston is poised to attract a wave of investors, who might compete with first-home buyers, due to impressive yields.

A case in point is Palmerston suburb Zuccoli.

“It’s possible to buy some land and build a three-bedroom house for $450,000 in new Palmerston suburbs such as Zuccoli,” said Glenn Grantham, general manager, Raine & Horne Darwin.

The real estate firm is selling land in the Zuccoli Aspire development on behalf of Costojic, a partnership between developer Costa Property and local firm Ostojic.

“If you are a first time buyer and have a $26,000 first homeowner’s grant to spend on a new property, then Zuccoli continues to look very attractive.”

Grantham said some properties in Zuccoli can earn rents of up to $600 a week, or a healthy gross yield of 6 percent.

“Moreover, some of the builders offering house and land packages in Zuccoli have completion valuations indicating their homes would sell in the market for $530,000.”

“We have just released another 200 blocks at Zuccoli Aspire, which are selling from $135,000, and we expect investors, especially those from Sydney and Melbourne, to jostle with first home buyers in the race to snap up these very affordable blocks,” said Grantham.

The return of interstate investors to markets such as Palmerston is not unexpected, according to Grantham, as Darwin’s rental yields compare favourably with other capital cities.

“Our median prices are many hundreds of thousands of dollars cheaper than Sydney and the smart interstate money is recognising there is more to Darwin than mining and resources,” he said.

“Darwin has a diverse economy that has a good spread of government businesses, as well as robust defence and tourism industries. 

He cited that visitor nights – both domestic and international – rose by 24 percent in financial year 2015/16, illustrating Darwin’s growing tourist appeal. 

“Combine the city’s growing economic diversity with real estate affordability and strong yields, and Darwin real estate will be on the radar for investors again in 2017.”