Darwin a landlords' market

Darwin a landlords' market

05 December 2006

Research releases this week by Colliers International has shown that investment performance in Darwin remains strong, particularly in the CBD suburbs for units and in Palmerston for houses. Strong yields, low vacancy rates and continuing demand due to population growth means Greater Darwin's dwelling rental market is a landlords' market.

Colin Dwyer, Director Research and Consulting for Colliers International, said the Darwin property market has remained strong because population growth is robust and the economy is growing, creating employment opportunities.

"The Darwin economy is specialising in growing sectors of the national and international economy, such as defence and services to mining. These factors have contributed to strong dwelling demand in Greater Darwin," Mr Dwyer said.

"Darwin's property market continues to offer a stronger comparative investment return compared to other investment choices," he said.

"While the Darwin property market continues to perform, comparatively better than alternative investments (that means the combined yield, tax benefits and capital growth are greater than or similar to the share market, term deposits and other property markets), it will continue to attract strong interest from investors," Mr Dwyer said.

In June 2005 the ABS estimated population of Darwin was 111,300, with 1.7% population growth. Palmerston's June 2005 estimated population growth rate was 3.1%, more than double the national average. Residential rental vacancies were 2.4% in Darwin and 2% in Palmerston, which most economists categorise as tight. Indeed, anything less than 3% is considered a tight rental market.

"Tight supply, dwelling affordability issues and increasing demand from population growth creates upward pressures on dwelling rental prices. Combine this with strong yields and the Darwin dwelling rental market is a firm landlords' market," Mr Dwyer said.