- Darwin housing values were up by 0.5% during the month of May
- The vacancy rate has remained relatively stable, and is higher than other capital cities
- Experts believe the sales market remains relatively strong
According to CoreLogic, Darwin housing values were up 0.5% during the month of May, representing a step down from the pace of growth recorded over the past two months, with the two preceding months recording a monthly growth rate of 0.8% and 0.9% respectively.
“Despite the slipping capital gains, the estimated volume of sales remains well above average levels and 16% higher than a year ago,” noted Tim Lawless of CoreLogic.
“Even with a higher volume of sales, advertised listings have increased by 13% relative to the same time last year, which may help to explain the recent softening and growth conditions.”
Simon Pressley of Propertyology noted that the volume of detached house sales during 2021 had returned to levels not seen since 2015. He added apartment sale volumes were 100% higher than 2019.
“Investor and first home buyer activity is noticeably on the up. The outlook for Darwin’s economy is improving,” said Mr Pressley.
The Commonwealth Bank said it expects property prices to increase by 7% this year – the most optimistic prediction across the board. ANZ suggested 3%, while SQM Research hinted at even backward growth, in the vicinity of -4% to 1% growth.
“One significant bearish indicator is the sales listings,” said Louis Christopher of SQM Research.
“Which suggests sales turnover is slowing, as I can see a rise in stock levels and days on market.”
Matthew Knight, Head of Northern Territory for Frank Knight, told The Property Tribune that growth has in Darwin house prices have moderated this year.
“The Palmerston market appears to have run out of steam and values have moderated and there are fewer buyers in the market,” added Mr Knight.
“There is still good demand for housing in the Northern suburbs and Darwin’s inner suburbs and enquiry remains at a healthy level and properties are still selling.
Matthew Knight, Head of NT Knight Frank
“The growth in rents this year appears to have stabilised and the vacancy rate has remained relatively stable at circa 1.5-2.0% since the start of the year.”
Glenn Grantham, General Manager, Raine and Horne Darwin, noted the market has been moving towards increased sale price, increased number of sales and lower days on the market.
“There has been a heavy concentration on ‘family’ homes in desirable Darwin suburbs however toward the latter half of the year similar properties in the Palmerston region experienced increased demand and prices, with quality CBD Apartments becoming desirable at that stage also,” he said.
What’s in store for 2022?
When asked about the outlook for the Darwin market, Mr Knight expects the sales market to fare reasonably well over the next few years.
“I think that Darwin property values will remain robust and will not suffer the forecast drop down the East Coast of Australia and in particular Sydney and Melbourne,” he said.
“ Our recent growth in property values came from a low base and we have not fully made ground on the height of market in 2011/12. I expect price growth to moderate and that property values will remain stable over the next year or two.”
Mr Grantham believes Darwin has not yet reached the peak of the upswing.
“You should expect to see continuing growth spreading through all sectors of the market with a particular emphasis on investor style properties as the yield continues to improve which will be driven by the sharpening accommodation shortage.
In terms of the Darwin rental market, Mr Knight noted the vacancy rate is higher than other capital cities, such as Brisbane and Adelaide, which are below 1%.
“Again, over the last couple of years we have seen a recovery in rental values as our market had hit a 10% plus vacancy rate,” he said
“Over the next year or two and, like capital values, I expect rents to remain on par with the current levels but with the potential for rents to increase further in the next 12 months. The biggest issue we have is in our supply chain.
“There is not a lot of new stock coming online which is going to push the vacancy rate lower over the next couple of years. If Defence and other projects continue to gain momentum and build there could be a looming rental crisis in Darwin in the next year or two.”
Mr Grantham noted there would be upward pressure on rents as Darwin attracts the expanded population required to drive already-committed projects.
“The commencement of the Charles Darwin University campus in the CBD will increase this pressure. It will be a very attractive time for investors to enter the market and assist with relieving that pressure.”
Glenn Grantham, Raine and Horne Darwin
To view property market predictions for the other cities, check out the below articles.
Adelaide Property Market Predictions
Canberra Property Market Predictions
Brisbane Property Market Predictions
Gold Coast Property Market Predictions
Hobart Property Market Predictions
Melbourne Property Market Predictions
