The Darwin market has been doing it tough for much of the past decade. Back in 2012/2013, it was a national leader on price growth alongside Perth, amid an ‘up’ cycle generated largely by the resources investment boom.
When that ended, Darwin’s market fell into a deep and lengthy slump. Many suburbs throughout the Darwin metropolitan area have negative long-term capital growth rates, which means prices are lower than a decade ago.
But recovery is undeniably underway. Rental vacancies, which in 2018 were high in the 4%-5% range, are now well below 1%. Rents are rising strongly, sales activity is elevated and prices have responded in the past 12 months.
Darwin’s median house price rose 18.5% in the 12 months to 30 September 2021 and its median apartment price increased by 23.3% over that same period, according to CoreLogic. The city has by far the highest rental yields among the capital cities and investors are once again buying properties in the Northern Territory capital city.
The city’s good record in keeping the pandemic at bay, its warm climate and its affordable home prices – its median dwelling price, around $480,000, is the lowest of the capital cities – have also attracted new residents.
The 5 best suburbs in Darwin to invest in
- Leanyer
- Lyons
- Moulden
- Rapid Creek
- Tiwi
Recent price growth in the Darwin market is a revelation in a city that has seen little change in property values in the past decade.
The Northern Territory capital has spent so long in the doldrums that property values in most suburbs across the Darwin metropolitan area are lower than a decade ago.
The suburb of Gray in the City of Palmerston, for example, has a 10-year growth average of -1.8% per year, while the suburb of Karama’s 10-year growth average is -1.9% per year.
Those that have positive growth averages are well under 2% per year. Four of our five picks for Darwin have long-term growth averages below 1% and the other is -1.4% per year.
That’s the bad news. The good news is that the next 10 years promise to be considerably more buoyant for the Darwin property market. Vacancies are low, rents are rising, sales activity is much stronger than before and prices have responded in the past year.
With vacancies below 0.5% in Leanyer, rents are rising and so are sales volumes, leading to a spike in the median house price to $575,000 in the most recent quarter. Leanyer and its immediate neighbours offer an array of schools, parks and recreational amenities, about 5km from Darwin Airport.
Tiwi and Lyons in the northern suburbs of Darwin stand out for their rental yields – both around 5% for houses – although typical prices are somewhat different. Rents are strong because vacancies are below 1% and sales activity has risen in both suburbs, leading to a jump in the level of price growth in the latest quarter.
Rapid Creek is a popular seaside suburb where sales activity has lifted and prices have exploded recently, with median price growth in the latest quarter that exceeds the annual growth rate.
The satellite city of Palmerston has also benefited from the revival in the Darwin market. The suburb of Moulden demonstrates the improvement in Palmerston markets, with vacancies low and rents rising, which means typical rental yields top 6%. Sales activity is increasing and prices have taken off, but Moulden remains affordable.
The 5 best suburbs in Darwin to invest in
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| Suburb | Median house price | 1-yr growth | 10-yr average annual growth (%pa) |
Vacancy rate | Median rental yield |
|---|---|---|---|---|---|
| Leanyer | $575,000 | 16.6% | 0.5% | 0.4% | 4.4% |
| Lyons | $730,000 | 15.0% | 0.5% | 0.8% | 5.1% |
| Moulden | $340,000 | 9.7% | -1.4% | 0.5% | 6.1% |
| Rapid Creek | $660,000 | 14.3% | 0.7% | 0.6% | 4.2% |
| Tiwi | $490,000 | 15.3% | 0.2% | 0.8% | 5.0% |
Sources: Median price, growth and rental yield: CoreLogic data sourced from yourinvestmentpropertymag.com.au dated 1 August 2021. Vacancy rates: SQM Research as at September 2021.
Cover image source: Travelling.About/Shutterstock.com
About Terry Ryder
About Terry is the founder and Managing Director of hotspotting.com.au, which he created in 2006 to help investors find the best places to buy. Terry has been a specialist researcher and writer on Australian residential property in a career spanning four decades. During that time he has published four books.
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