‘It’s got the highest growth of any capital city and shows no signs of weakening. Darwin is quite incredible, it grew 10% for the year and the rental yields are extraordinary, the highest in the whole country.’
—John Linderman, Residex, May 2009.

As the capital city of the Northern Territory (NT) and the gateway to Asia, Darwin is well-known for its friendly and relaxed outdoor lifestyle. However, Darwin has recently come under the spotlight for its resilience and ability to defy global economic conditions.

‘There haven’t been too many positive stories in the global real-estate market this year, but the NT has proved to be an exception,’ said Your Investment Property writer, Kit Kadlec.

According to The Residex Report for the March 2009 quarter, the housing market in Darwin is currently much stronger than any other Australian state or territory, both in terms of sales and capital growth. 

Real Estate Institute of the NT’s Chief Executive Officer, Ryan O’Hanlon, says the property market in the NT is attracting many investors.

‘We’ve got an extremely tight property market which has been continuing for a long time. We continue to see high rents and close to positively geared property. That perspective, and the fact that the territory is growing so quickly, is a positive for any investor,’ Mr O’Hanlon said. 

Darwin’s diversified economy

The Darwin property market is underpinned by a variety of industry sectors including mining, resources, the Australian Defence Force (ADF), tourism and a territory government committed to spending money on infrastructure.

The Residex Report stated that many of the industries most at risk from the economic downturn are not dominant players in the local economy. Several of the NT’s major exports, including gas and livestock, are still in high demand. The unemployment rate (4%) is currently lower than all Australian states except the Australian Capital Territory, and has not risen in recent months.

‘The Federal Government’s recent decision to increase our presence in Afghanistan will also have a positive impact on the territory’s economy, with Darwin being the main entry and exit point for such movements,’ the report said.

Tipped for further growth

The NT’s population is expected to increase substantially over the next 20 years, with the population of Greater Darwin and Palmerston to increase by 55%. To cater for this growth, the territory government has announced the development of a new city, Weddell.

Housing Industry Association of NT President, Adrian Ferriggi, says Weddell’s announcement is evidence of Darwin’s resilience to current global economic conditions.

‘The NT will just continue to go gangbusters. Where the rest of the states are at this particular time, slowing down, Darwin is going ahead and looking towards a very strong future,’ Mr Ferriggi said.

A breakdown of Darwin’s key residential property results (from Residex) to the end of the June 2009 quarter is provided in the table below.

At a glance: Darwin houses and units Darwin houses The housing market in the NT is currently much stronger than any other state or territory, both in terms of sales and capital growth. The median value of houses in Darwin grew by 5.3% in the June quarter and by 14.8% over the past 12 months to $477,000. The median rent for houses in Darwin grew by 16.3% over the last 12 months to $500 per week. Darwin has now overtaken Sydney as the most expensive median weekly rent in Australia. Darwin units The median value of units increased by over 14.7% in the last 12 months to $365,000 and 4.1% in the June quarter. The median rent for units rose by 11.4% in the past year to $390 a week.

Defence presence

The Defence sector is a significant contributor to Darwin’s economy, with 13,000 Defence personnel (approximately 10% of the ADF) and their families currently stationed in the NT.

The Army, Navy and Air Force all have establishments in the Darwin area including: 

• RAAF Base Darwin
• HMAS Coonawaara
• Darwin Naval Base
• Larrakeyah Barracks, and 
• Robertson Barracks.

Defence Housing Australia (DHA) manages approximately 1800 properties in the Darwin area. Darwin and Palmerston housing stock consists predominately of single houses, both ground level and elevated, with private and rear gardens. There are a number of two storey townhouses and high rise apartments, surrounding or within close proximity to the Darwin CBD. The majority of DHA properties have carports in preference to garages which are more suited to the tropical lifestyle.

Click here to view a list of DHA properties for sale in the Darwin area.

Sources

• Australian Property Investor, ‘On the map’, May 2009.
• Northern Territory Government website, ‘www.nt.gov.au'
• The Residex Report, ‘Market Commentary Northern Territory’, Quarter Ending June 2009.
• Your Investment Property, ‘Ripe for the picking?’ May 2009.
• Your Investment Property, ‘Darwin’s affordable suburbs heat up’, May 2009.
• Your Investment Property, ‘Darwin holds on to the top spot’, June 2009.