Investors seize Darwin’s affordable homes, strong yields,
Investors are significantly entering the Darwin property market. Agents have observed a notable increase in sales and buyer interest recently.
Derek Hart, from Elders Top End Group, mentioned that investor inquiries began to rise about four months ago.
There is particularly strong interest in homes priced below $510,000.
Hart noted that for the past six years, investor activity has been minimal.
In fact, around 95 percent of buyers during that time were owner-occupiers.
Now, however, the dynamics have shifted.
Currently, 60 percent of buyers are owner-occupiers, while 40 percent are investors.
Furthermore, he stated that the influx of investors has been particularly heavy in the last six weeks.
Mr. Hart highlighted that roughly 85 percent of the investors are coming from down south.
Moreover, about 80 percent of these investors are utilizing buyer’s agents for assistance.
Interestingly, inquiries have surged by 50 percent in just the last month.
As a result, more people are actively looking for properties, leading to increased offers.
Consequently, properties are selling much more quickly now than before.
Mr. Hart also mentioned that building inspectors, pest inspectors, and conveyancers are extremely busy.
Overall, there is definitely a noticeable increase in transactions taking place in the market.
Daniel Harris from Real Estate Central reported a similar trend in the market. His agency has experienced a 30 percent spike in sales recently.
He mentioned that over 90 percent of buyers in recent years were owner-occupiers. However, this situation has now changed dramatically.
Currently, there is a 50/50 ratio of owner-occupiers to investors in the past couple of months.
Additionally, at least a third of their deals are off-market transactions.
Many of these off-market sales are facilitated through professional buyer’s agents.
Furthermore, PropTrack data revealed that preliminary sales in Darwin increased by 15 percent in September.
This increase is in comparison to the same month last year.
However, Mr. Harris noted that this data does not fully capture the market dynamics.
He explained that the figures are skewed due to off-market sales and delays caused by settlement times.
As a result, the true state of the Darwin real estate sector may not be accurately represented.
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He mentioned several factors contributing to the increase in real estate activity in Darwin.
“Some individuals believe that the change in government is boosting consumer confidence,” Mr. Harris stated.
“Others attribute this rise to new grants, while some point to gas or defense projects.”
He acknowledged that all these factors are playing a role in the current market dynamics.
However, he emphasized that the primary driver of interest is Darwin’s affordability compared to other capital cities.
Moreover, the yields available in Darwin are significantly higher than those in other locations.
“Every other capital city has already experienced its run,” he noted.
He added that investors initially moved from Brisbane and Adelaide, then Perth became popular.
Now, it seems to be Darwin’s turn in the spotlight.
Mr. Harris explained that most investors are focused on entry-level houses priced below $550,000.
In fact, he highlighted that Darwin is unique among capital cities for consistently having houses under $500,000.
These homes are located within 25 kilometers of the CBD, which is quite rare.
According to PropTrack data, the median home price in Darwin was $511,000 in September.
Notably, there was no growth for that month, with only a slight increase of 0.94 percent over the past year.
Mr. Hart also believed several factors are contributing to the resurgence of the Darwin property market.
He mentioned the new CLP government and the introduction of first homeowner and new build grants as key elements.
“People feel confident that crime issues will be addressed with the new government in place,” he stated.
Moreover, he noted that it’s a favorable time, as there is optimism about interest rates dropping.
Additionally, several new projects are expected to be approved for the upcoming year, which boosts confidence further.
Mr. Hart highlighted that the tight rental market is also attracting more investor interest.
“Will vacancy rates remain low? Absolutely,” he asserted confidently.
He added that investors recognize this trend is likely to continue in the future.
According to PropTrack data, the rental vacancy rate in Darwin was just 1.21 percent in September.
This figure represents a decrease of 0.76 percentage points compared to the same time last year.
Interestingly, new rental listings in Darwin surged by 18.2 percent over the year leading to September.
However, total rental listings increased by only 1 percent annually.
Currently, supply remains 36.2 percent below the decade average, indicating a tight market overall.
