Supply in Darwin remains tight with a growing number of interstate investors flocking north to secure a piece of the capital’s property market.
Propell National Valuers’ Paul Eustance told Smart Property Investment that there is a strong demand from interstate and Asian investors for off-the-plan projects, which can be seen as a growing trend in the area.
“We do have quite a few developments which are underway in various locations around Darwin itself and suburban locations, so interstate buyers are fairly active in those locations,” he said.
Mr Eustance attributes the demand to the city’s strong rental market, tight vacancy rates and the comparatively shorter time frame that an apartment development would take to build.
“The typical apartment development is usually smaller than what you find in other capital cities. So the time you would take to buy an off-the-plan to settling the property is a relatively short period of time, between a year and a year and a half.”
Being home to a high percentage of Asian population and expats, Mr Eustance continued, the presence of Asian investors in Darwin’s property market is also strong, with parents also looking to buy properties for their children close to the university campus.
“The entry level for Darwin is relatively high and parents will buy for their children wherever they can, not all parents are able to, but it’s what we notice occurs,” he explained.
While these trends may not necessarily apply additional pressure on Darwin’s demand equation, they are keeping it in its current state. Mr Eustance believes this issue of supply will not be solved in the short term.
“There are too many structural industry issues which won’t change the supply of land for development,” he said. “The demand equation will remain stronger than supply for at least the next couple of years.”
While all market segments have been fairly strong, Mr Eustance said the prestige market had been buoyant and is gaining momentum, with many transactions made in the plus-$1 million market in inner Darwin areas such as Fannie Bay and Larrakeyah.