After two consecutive quarters of strong sales activity, Darwin prices are set to head north, according to Glenn Grantham, General Manager, Raine & Horne Darwin.
“There was a bounce in buyer activity in the second half of 2016, which is contributing to a boost in the prices of quality, well-located properties in Darwin’s northern suburbs,” said Grantham.
Desirable houses in Jingili, Karama and Anula, are attracting 30-40 groups to open homes, with many selling within 3 weeks of reaching the market, according to Grantham.
“Historically when values in the northern suburbs improve, this creates a ripple effect that eventually flow south to Palmerston,” he said.
Grantham said that while values in Darwin’s north will rise in the medium term, vendors with properties in the city and the south must be patient.
“Regardless of where you live, to cash-in on current market activity, a property must be well-presented and priced sensibly to sell,” said Grantham.
Other hurdles to a swift sale might include rental properties with long-term tenants, which are not realising competitive yields.
“A Darwin property generating a gross yield of less than 4% will be harder to shift in the shorter-term,” said Grantham.
“The bottom line is that properties with a few flies on them will be more difficult to sell now. However, when the momentum picks up across Darwin, they’ll wash through the market too.”
Owner-occupiers continue to dominate the Darwin market, although Grantham said that interstate investors are increasingly among the buyers.
“We had a Sydney investor who wants to use his self-managed fund (SMSF) to buy a property worth $470,000 which will rent for $475 a week. This is a stronger return than Sydney real estate, or other asset classes such as cash and fixed interest,” he said.
“We have plenty of product in the Darwin market that will tick the boxes for investors from the Southern States.”
Underlining the improving strength of Darwin rental market, Raine & Horne Darwin has leased 100 properties already in 2016.
“This works out at roughly 2 a day, and we strong have demand from trades people, public and private sector workers moving to Darwin now for work,” said Grantham.
There are several planned and committed infrastructure projects set to begin in Darwin including the $500 million upgrade of HMAS Coonawarra and Larrakeyah Barracks, and the $250 million Darwin Luxury Hotel development.
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