“Accommodation in Darwin continues to become out of the reach of young families and singles, and in turn this is increasing demand for more affordable property in all areas."
Darwin a safe bet for residential investors: Colliers
Darwin is the safest real estate market in Australia according to Colliers, with nearby Palmerston catching up.
The city provides a virtual safe haven for investors, with strong sales figures and exceptionally high rental returns, according the Darwin residential research report for the third quarter of 2012.
The report finds Darwin has the highest rental rates in the nation, pushing up residential sales prices.
Darwin now has an average house rental of $700 per week and a median house price of $585,000.
In Darwin the $500,000 to $600,000 price bracket remains the most popular, accounting for 42% of all house sales.
The report found the sales volume for units in Darwin increased by 29% over the quarter, with the $400,000 to $500,000 price range the most popular.
In nearby Palmerston, prices are increasing as well, closing the gap on Darwin.
“Accommodation in Darwin continues to become out of the reach of young families and singles, and in turn this is increasing demand for more affordable property in all areas,” says research analyst Lianna Georges.
“Prices in the Palmerston market continue to strengthen, and for the fifth consecutive quarter the median house price has increased.
“Since September 2011, the median price in Palmerston has increased by approximately 13% to $532,500, a figure which is quickly closing in on the median prices in Darwin.”
Colliers predicts the rental rates will keep increasing over the next six to 12 months, bringing significant change in the social dynamics of Darwin.
“Clearly, lack of affordability will impact negatively on average workers and families,” the report finds.
The median unit in Darwin is now $500 per week, giving yields of 6.1%.
While transaction levels in Palmerston have stayed level, the median house price has increased for the fifth consecutive quarter to $532,500, up 13% since September 2011.
Median unit prices in Palmerston fell slightly over the quarter, dropping to $438,000.
All in all though, Colliers is pretty upbeat about Darwin and the future of Palmerston.
“As Darwin continues to blossom into a multi-faceted city, its residential housing market is expected to entice investors. The territory is able to offer abundant employment, modern infrastructure, quality schooling and amenities, in addition to new housing which provides an ideal environment for sustained economic growth,” Georges writes.