- A Darwin real estate agency has sold six two bedroom properties in the city centre in the first few days of the 2023-24 financial year.
- Median house prices have doubled in the town of Humpty Doo, 40 kms south of Darwin, in the last 20 months.
- Increased interest in Darwin real estate is occuring later in the year than usual.
Buyers from the east coast of Australia are said to be behind an encouraging number of properties that were sold in the top end at the start of the new financial year as at least six pieces of prime Darwin real estate were snapped up by savvy investors just a few days into July.
“Our average investment yields of around 7% are almost double those of the southern capitals.”
Glenn Grantham, general manager, Raine & Horne Darwin
All of the properties sold by agency Raine & Horne Darwin were two-bedroom apartments in the CBD, priced between $300,000 and $500,000.
After a slow month in June, when increasing interest rates discouraged buyers in the top end from snapping up properties there, the agency has begun to see an uptick in interest from serious buyers.
“Enquiries dropped off, and we attributed it to buyers reacting to the RBA announcement.
“However, the truth is that many buyers and vendors were less concerned about interest rates and were waiting for the calendar to click over to 1 July.”
Glenn Grantham, general manager, Raine & Horne Darwin
The small town of Humpty Doo, 40 kilometres south of Darwin may seem like a leftover set piece from the 80s Australiana cinema classic, Crocodile Dundee.
Surprisingly for some, median prices have doubled there in the last 20 months, helped along by the sale of a seven-bedroom property that was recently sold for $1.5 million.
The usual yearly patterns of buyer interest in the Darwin residential real estate market are not materialising this year, according to other agencies such as Knight Frank, with the expected wave of buyers usually keen in the latter stages of Q1 delaying until further into 2023.
“It has only really been in the last couple of months that I have found the buyer interest levels to have increased & this is in both owner-occupiers & investors.”
Rebecca Wescombe, residential marketing specialist, Knight Frank Real Estate
The top end represents a unique real estate market characterised by an eclectic combination of larger, ‘luxury escape’ style properties and older residential properties.
The Real Estate Institute of the Northern Territory (REINT) CEO Aswin Da Silva says that he has not seen any significant uptick in buyer interest in the new financial year and that the typical buyer in the area may be an interstate family settling in Darwin for retirement, or an interstate investor.
“Following the Inpex issue in 2014, Darwin market has seen a correction taking place and the interest rate increases since May 2022 has not been a much dampener for median pricing.”
Aswin De Silva, CEO, REINT
He said that housing affordability remains a hot-button topic in the top end, suggesting that the real estate market is experiencing a slight slowdown overall.
Changes afoot for many property owners in Darwin can be attributed to a reduction in tourism which peaked during the border restriction period. De Silva said that a reduction in Airbnb bookings and a return to more traditional short-term rentals is a positive sign.
Demand remains bullish with available stock not meeting this demand. Rental yields remain strong (6% to 7%) in particular for 3-bed units; vacancy rates are sub 2%.
“Affordable housing is key to correcting this mismatch, bearing in mind an expected increase in student related migration.”
Aswin De Silva, CEO, REINT
An increase in insurance costs associated with rental properties in Darwin is a driving factor when it comes to rental affordability.
Media reports of the city experiencing somewhat of a crime wave in the first half of 2023 and reports of insurance premiums increasing may have a limiting effect on demand for investment properties.
New residential developments are certainly not uncommon, however, and higher quality new houses being sold for higher prices are bringing median values up in semi-rural areas like Humpty Doo.
Closer to the centre of Darwin, more exclusive upmarket suburbs like Fannie Bay and Larrakeyah are seeing encouraging signs of resilience when compared to falling values in cities like Sydney and Melbourne.
An ultra high-end double-storey house in Fannie Bay set a new record for the city, selling for an unprecedented $8.5 million last April, $2 million more than the previous record holder, located in Larrakeyah.
Fannie Bay is home to the upper tier of Darwin real estate and boasts a sailing club and ski club. Its weekly asking price for houses was $1.037 million in June, but dipped slightly in July to $975,000, according to SQM Research.
Larrakeyah
There will always be a place for luxury properties in the top end, particularly in the rural areas, people want to be able to have luxury, space, and convenience to amenities.
“Although a very unique market in comparison to the rest of the country, the top end provides appeal to a wide variety of people.”
Rebecca Wescombe, residential marketing specialist, Knight Frank Real Estate
Darwin residential real estate represents some of the lowest prices in the country and time will tell whether buyers from other states become enamoured with the relaxed lifestyle there.
Recently confirmed infrastructure projects with long-term economic benefits are likely to keep demand reasonable, but with the residential property market tightening across the country, real estate professionals are set to be put to the test in the land of crocodile farms and Akubra hats.
