Property news you need to know: The week ending 19 September
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Sydney might be locked down, but the NSW property investors are always on the lookout for the next hotspot.
With Sydney’s property market in lockdown, more and more investors in NSW are turning towards the capital of the Northern Territory as a potential alternative.
According to Raine & Horne Darwin, the return of restrictions in the Greater Sydney area has coincided with a surge of interest from NSW-based property investors.
Since 26 June 2021, enquiries by NSW buyers are said to have increased 20 per cent on the previous month.
Glenn Grantham, general manager for Raine & Horne, said that this surge in demand from NSW “mirrors the significant percentage increase in enquiries from Victorian buyers during the extended 2020 Melbourne shutdown”.
Mr Grantham said that it’s investors, not owner-occupiers, who “are leading the charge for Darwin real estate from NSW at this stage”.
Highlighting Darwin and Palmerston properties valued under $500,000 as a “sweet spot for investors”, Mr Grantham said that vacant and soon-to-be-vacant properties represent an opportunity for many NSW investors.
“Previously, investors were ignoring vacant apartments or those nearing the end of a lease. But with rents in Darwin and Palmerston going through the roof, they are now popular with savvy investors,” he said.
Mr Grantham said that NSW investors “have identified that Darwin property is offering not only excellent growth prospects but also investment yields above 7 per cent compared to Sydney, where it’s particularly challenging to find a 3 per cent return”.
Citing record-low vacancy rates, he said that many Darwin properties are either being renewed or renegotiated and are renting for 10-20 per cent more than they are currently achieving.
Mr Grantham also pointed to Darwin’s shorter, sharper, lockdowns as a potential drawcard for NSW-based property investors looking for an alternative to the longer lockdowns seen in Victoria and NSW.
As he puts it, “this new interest in Darwin follows the success of the Northern Territory’s five-day lockdown followed by the immediate return to the standard transmission for business, real estate and our economy”.
“The lockdown was immediate, hard, and it’s allowed us to move on fast,” he said.
CoreLogic data from June found that Darwin maintained the highest annual rate of growth among its capital city peers, with the city’s prices soaring by as much as 21 per cent over the last 12 months.