Darwin delivers investors double-digit house and unit price growth for past decade: Residex

Darwin delivers investors double-digit house and unit price growth for past decade: Residex
Darwin delivers investors double-digit house and unit price growth for past decade: Residex

Crocodiles and snakes are not the only big things you’ll find in Darwin.

The Northern Territory’s capital city has also been delivering big returns for property investors, with Residex calculating that Darwin is the only capital city market to deliver average house and unit price growth in excess of 10% per annum over the last 10 years.

According to Residex’s July update, Darwin house prices have been rising by nearly 10.5% per annum since 2002 with a current median price of $519,000 while Darwin units have fared even better, up 10.8% per annum since 2002 to $408,000.

Recent houses to sell around the median value include this three-bedroom townhouse in Charlotte Street, Fannie Bay (pictured below), which sold for $555,000 in April through Karl Secondis from One Real Estate Darwin.

It last sold for $260,000 in January 2004.

The property was listed with a rental guide of up to $550 per week, translating to an indicative yield of 5.15%.

A two-bedroom unit on Philip Street, also in Fannie Bay, sold for $445,000 in July through Mike Smith of Raine & Horne Darwin, having last sold for $380,000 in October 2008.

It was listed at $464,000 in December last year.

Growth has slowed in the past year, with annual growth to July 2012 of 3.94% for Darwin houses and 4.27% for Darwin units.

Only Perth has come close to matching Darwin’s double-digit annual growth since 2002 rate, with 8.78% growth for houses (median price $476,000) and 9.49% for units (median price $430,500).

A lack of available rental accommodation has also pushed up Darwin rents, with weekly rentals for houses rising from $520 per week in July 2011 to $560 per week in July 2012, while unit rents have increased from $435 to $470 over the same time period.

The Real Estate Institute of the Northern Territory (REINT) reports that rents in inner-city Darwin have risen by 22% in the past year for three-bedroom units to $796 per week, while the median rent for a two-bedroom unit has risen by 13% to $504.  

REINT chief executive Quentin Killian warns that the Darwin property market is not keeping pace with rapid economic growth.

The Housing Industry Association expects the rental market to tighten, with only 1,270 new homes expected to be built in Darwin in 2012 below the 2,100 that it forecasts are needed to satisfy demand.

According to the latest July rental vacancy figures compiled by SQM Research, Darwin is showing signs of a “signals of a severe rental crisis” with a vacancy rate of just 0.4%, with just 94 properties available to rent, down from 105 properties in June and 261 a year ago.

RP Data figures for July show that Darwin has the highest gross rental yields for both capital city houses  (5.7%) and units (5.9%)

Colliers reported that 200 houses were sold in the June quarter in Darwin – a 35% increase on the previous quarter, with the most expensive home sold being a $2.25 million mansion on East Point Road, Fannie Bay.

Darwin photograph by Ken Hodge, courtesy of Flickr.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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