Darwin home owners selling up in nation's 'strongest property market'

Darwin's real estate market is emerging as a notable exception in the current trend of declining property prices across Australia, with house prices witnessing a modest increase of 0.3 percent. This makes Darwin the third most expensive capital city for renting a home, trailing only behind Sydney and Perth.

According to Gerard Burg, the head of research at Cotality, the ongoing rise in property values may be fleeting, particularly if interest rates see an increase next month. Lisa-Joy Cron, who purchased her home in Palmerston in 2010 just before a significant downturn in Darwin’s property market, is contemplating selling her property now that prices have begun to rise after a prolonged period of stagnation. "I think right now is a good time to sell," she stated, expressing her desire to capitalize on potential profits. She hopes to sell her home for at least $300,000 more than what she originally paid 16 years ago.

As more homeowners and investors in Darwin consider listing their properties to take advantage of the escalating prices, experts caution that the opportunity for favorable sales may be limited. Burg highlighted that Darwin is currently experiencing the "strongest property market in the country," while also reiterating that property prices have only seen slight growth recently, with house prices up 0.3 percent and unit prices up 0.8 percent in September.

Although there is an increase in the number of properties being listed for sale, Burg noted a simultaneous drop in the number of buyers, suggesting that the tight market conditions may be beginning to ease. "There is still some uncertainty around where property demand is heading in the coming months," he remarked, pointing to the potential risk of another interest rate hike from the Reserve Bank of Australia (RBA) in November, which could further influence the market. He indicated that Darwin might eventually follow the broader national trend of declining property values.

Signs of a cooling market are already apparent, according to Burg's analysis. He noted that the total number of properties available for sale has increased from around 60 percent below average in mid-January to about 40 percent below average, indicating a rising inventory.

Kerri-Ann Laurence, a real estate agent with over 20 years of experience in Darwin, has also observed a rise in property listings since the beginning of the year, although she emphasized that this remains historically low. She mentioned that most of her clients are either relocating, downsizing, or upsizing due to family circumstances. "I have no doubts some of the downsizers in particular are seizing the opportunity," she said.

Laurence indicated that the influx of interstate investors, who have been quickly purchasing properties across greater Darwin in recent months, appears to be tapering off as prices continue to climb. Nevertheless, she remains optimistic about the market's potential for further growth. "There have been plenty of projects on the boil — Beetaloo gas is now flowing, and I think that will lead to more investment," she remarked. In a relatively small market like Darwin, even a project requiring a thousand workers can significantly alter the real estate landscape in a short time.

In terms of rental prices, Darwin continues to rank among the most expensive capital cities, with a median rental cost that surged by approximately 11.6 percent year-on-year as of September. The city is facing a tight rental market, with a vacancy rate of around 1.9 percent. Burg pointed out that in certain areas of Darwin, it may actually be more economical to buy a home with a mortgage than to rent a comparable property. The situation for renters outside of Darwin is even more challenging, particularly in Alice Springs, where the vacancy rate is just 1.4 percent due to a significant shortfall in new home construction.