Homebuyers setting their eyes on Darwin

Darwin is seemingly becoming a hotspot for many buyers who want to break into the market.

Raine & Horne general manager Glenn Grantham said there was a surge of property owners releasing their properties for sale over the past month, taking advantage of Darwin’s recent annual growth of 15%, which is the highest in many years.

“Given the transient nature of Darwin’s workforce, plenty of tenancy agreements end at this time of year and rather than seeking to find a new tenant, the owners are deciding to put the properties on the market for sale,” he said.

Mr Grantham said more than 85% of buyers in Darwin are currently owner-occupiers who are either getting their first home or upgrading.

Recently, a five-bedroom home in Alawa, which rented for $750 per week, was sold for around $800,000.

“Where else can you find a property of this calibre in any other Australian capital city that is just 10 kilometres to the CBD and five minutes to the nearest beach for well under $1m,” Mr Grantham said.

The dominance of the owner-occupiers in Darwin’s property market is putting a pressure on its tight rental market.

“We’ve even seen an increase in off-market sales to tenants —some tenants are buying their rentals homes because they like the property so much,” he said.

“These off-market sales not only take the tenant out of the rental market but also take the long-term investment properties out too.”

Figures from SQM Research showed that Darwin’s rental vacancy rate increased to 1.2% in December 2021, up from 0.9% in the previous month.

Darwin’s rental market is tighter, relative to the markets of Sydney, Melbourne, and Brisbane.

Mr Grantham said the smaller pool of rental properties, the strong rental demand, and the surge in owner-occupiers snapping up properties could potentially push up investment yields in Darwin.

“If more local and southern state investors jump into the Darwin real estate market and give owner-occupiers a run for their money on properties, we will be able to meet some of the demand for rental properties,” he said.

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Photo by @henriquefelix on Unsplash