NT The big Darwin summary - 2023 edition

The Northern Territory Government announced last week that a natural gas pilot project at Shenandoah South in the Beetaloo Sub-basin has been successfully completed - Beetaloo records highest test rate to date

These results exhibit the commercial viability of the project, with Tamboran now moving onto the construction phase and have outlined the potential for natural gas to be delivered to the Northern Territory in 2026.

The government said that the Beetaloo Sub-basin on-shore natural gas resource will be at the forefront of the world’s transition to renewable energy and enable a new economic era for the Northern Territory, estimated to increase economic activity by more than $17 billion.

As the project continues to progress, the government said that more work opportunities will become available for Territorians and millions of dollars will be spent in the Territory.

 

Yes, ours was about 100m child care centre of the CDU campus and literally 5 walking to the CDU admin buildings.. wife was working in CDU that time.
We got into the REA journey in Darwin.. 3 bed 2 bath on a 800 sqm block under 475K was our criteria to buy in Northern suburbs back in 2019-2020.. just before the market started going up..

We were well aware of new campus coming up in the city.. its delay was also obvious..
The strategy was always to get in foreign students and they aggressively persued it as well..
However even for foreign students its not a preferred location due Darwins weather and remoteness.. the quality of students getting there was pretty much using the extra points of state sponsorship to get pathways to residency.

Only reason to be careful of bying in the city in at least 2020 was there was a HUGE vacancy rate. and many banks refused to invest in the postcode 0800, especially after what happened after Inpex construction got finished.. loads of repossession, vacancy rates skyrocketed.
Other thing pecuilar to Darwin is the Body corp fees for these high rise apartments was close to 10-12K p.a which killed the yield.
You could have easily picked up 3 bed 2 bath apartment sea view towards the stuart park side for less than 375K however the body corp was about 8K-10K.. we stuck to houses in Northern subs.
Another brilliant spot if I can ever buy would be Casuarina drive - foreshore OR next to the Naval base sea facing homes on the cliff.

Other area which i missed to mention was Parap.. very tightly held by OO. I would rate this to be among strong desireable areas to live in.. great school brilliant markets (possibly worlds best Laksa Mary's) and has got a very Boho vibe to it..
We narrowly missed out on a bank reposession auction deal here on a 550 sqm block 4 bed 2 bath house by 15K .. from memory it sold for 615K and we were prepared to buy at 600k and no other bidder.. believe now median price in Parap should easily be in mid 7's..


Darwin population is highly transitionery .. do check up on the population growth parameters.. that why upside is limited. Probably for 100k more in Perth I would get better growth and possibly similar yield.

 

Darwin, cafe de la plage apparently. Time to up your rent @Ryan_sc?

 

Darwinians are clearly getting paid too much!

Second only to the ACT I might add, according to the ABS - Employee earnings, August 2023

 

Big wages, low property prices....something, at some point has to give.

 

Hi all, first post, been following this website for a bit. My experience of the NT as a whole is there are lots of very well paid government (and other) jobs without enough applicants. A large number of people come interstate for 3-4 years for a career experience boost and the associated salary before moving back to their home on the east coast. They all have to rent while living here, but are unlikely to settle very long term, giving rise to great yields (check out Alice Springs!) but not the capital growth seen in other places.

 

That's about right. But they don't all go home. Some stay.

Growth seems to mostly come from international migration.

The federal government makes it easier to get visas if you stay in Darwin.

 

That spot is lovely though!
Their pancakes hit the right notes too..

 

Listings are now starting to drop in Darwin. We're down to 1219.

In the bust listings were 1500+

In the boom the were around 1000 and even below.

Tik, tik, tik....

 

Morning all, I've only recently started looking at Darwin for an investment property so looking for a bit of advice from anyone more knowledgeable.
I have a budget up to 500k - it looks like I can buy reasonably comfortably in Palmerston with this budget and occasionally if I got lucky something might pop up in Tiwi/Alawa.
My main question is would I be better to wait and try and get something in the northern suburbs or just jump in now and buy in Palmerston?
Alternatively if anyone has any other areas that you'd suggest in this price range I'm open to any suggestions.
Thanks in advance!

 

I'd

I'd be trying for the northern suburbs. Just be mindful that a lot of these properties will require some maintenance so aim for a purchase price under 500k.

Wulagi, Tiwi and Wagaman should still be doable (just!) In this price range.

Alternatively a 3br townhouse in 0820 could be good too.

 

Okay great, thank you! It looks like there are a few in those areas at the moment so I'll see what I can find. Appreciate the input

 

Darwin listing numbers down - realestate.com.au

 

Borrowing capacity very tight. Anywhere under $400k to be worthwhile in Darwin?

 

Townhouses in 0820 can work. Can buy for under 350 and rent for 450-500.

Occasionally you can find a small house in gunn for 400.

 

@hammer and @Ryan_sc, I was checking at suburb level data. Although most of the northern suburbs have higher percentage rentals (>35%), I couldn't understand the reason for house price disparity. For example, what's the underlying reason that Wagaman is cheaper than neighbouring suburbs whereas the renters percentage is relatively lower and it had not experienced the downwards price pressure over the last 10 years whereas other suburbs like Lyons has bounced back significantly over last 3 years!

 

@hammer amazing write-up to kick off this thread, thank you. I'll be up there in July, any recommendations for a good coffee... and don't say cafe de la plage with those prices ^^^

Your opening update triggered a few questions for me, would be great to hear your thoughts:

1. if elevated homes are more desirable, why are they no longer building them? if it's a safety thing wouldn't that be reflected with higher insurance premiums making them less desirable?

2. is there much demand from tenants for a pool up there? investors tend to caution against the extra maintenance $$ in other regions

3. what do you mean when you say Palmerston is the future of the city? do you see central hub shifting over time?

4. Leanyer and Wulagi are built on swamps? what problems does this cause typically?

5. across the northern suburbs, what are you seeing on the ground with latest vacancy rates and DOM trends?

Thanks in advance for any feedback!

 

Hi @Gandapur, Wagaman has a bit more of a stigma with the locals than the more 'premium' northern suburbs. This is a result of having territory housing dotted around.

I believe that there is a opportunity in Wagaman however, but you would need to ideally visit the property yourself or at least have a local on the ground to assist with checking out the street, neighbouring properties etc.

If you are buying in the right pockets, Wagaman has some good employment hubs, being on the doorstop of the hospital, university and Casuarina.

The benefit being that you can find decent salaried tenants and net a good yield. I recently settled on an elevated property in Wagaman. It rented out within 24 hours of settling, with a >7% yield. This is a 4x2 renovated house on a decent block size - >900m2. I was careful with my DD prior to purchasing.

On the Darwin northern suburbs rental market @crunchyfriend, available house rentals in the northern suburbs have been reducing since the turn of the year, which historically is the peak time of year for vacancy rates. Around Jan there were approx. 115 house rentals available, and as of today there are 81. With a 5% decline MoM. This should continue to lower now than Darwin has entered it's dry season.

And more generally, I received the following feedback from a leading agent a few weeks back

"Markets better this year compared to last year. Feb and March have been super strong.

Should continue and be a consistent market this year."

As mentioned earlier in this thread, I consider Darwin to be early in it's growth phase and is more risky than those markets already moving so be sure to DYOR

 

Elevevated homes were preferred in the pre-aircon days to get a breeze through the house for cooling.
In practice however you end up above the fence line with all your neighbours which means you catch the breeze and every sneeze and conversation from the neighbours too.
Now days we have relatively cheap aircon that has made the need for going up largely obsolete.

Whether Palmerton is the next big thing is also debatable. Its not geographically constrained like the rest of Darwin, but its still just a large suburban area that has its ok parts but still carries a stigma which in other parts is justified.

A pool is an expectation. I didn't look at any properties without one (with the disclaimer I was looking at apartments to rent and they all had pools anyway).

Interesting fact(?): I believe Palmerston used to be called Darwin a long time ago. I forget the story, or what current day Darwin used to be called.

 

Hi @crunchyfriend I'll try and answer as best I can.

1. if elevated homes are more desirable, why are they no longer building them? if it's a safety thing wouldn't that be reflected with higher insurance premiums making them less desirable?

I think its mostly a cost thing. Building an elevated costs 20-30 percent more.
They don't have higher premiums, they just cost more to build. which is a shame because they are ideal for the conditions and absolutely stunning when done right. Most locals want one.

2. is there much demand from tenants for a pool up there? investors tend to caution against the extra maintenance $$ in other regions
There is, but as a landlord its a pain. I am not convinced that the extra rent you get offsets the costs and maintenance. I am saying this as a landlord with a pool...shoot me...

3. what do you mean when you say Palmerston is the future of the city? do you see central hub shifting over time?
Palmerston has land, Darwin does not. The central hub won't move, but PAlmerston will continue to expand outward.

4. Leanyer and Wulagi are built on swamps? what problems does this cause typically?
Concrete cracks in Wulagi, sometimes in the slab. Be careful.
Leanyer is prone to death by biting insect or nostril assault from the poo farm.

5. across the northern suburbs, what are you seeing on the ground with latest vacancy rates and DOM trends?
Currently I'm seeing a reducing vacancy rate, but that is normal at this time of year as Darwin is waking up with the Dry. I noticed a slight softening of rents towards the end of last year and I think its currently holding steady. I'd refer to @Ryan_sc on this one. He watches it like a hawk!

The big development today was Tamboran signing a deal with the NTG to supply gas for the power station. Nothing groundbreaking of itself until you realize that this is the first gas from the Beetaloo basin.
There is a LOT of gas in the beetaloo basin and it is an election year up here....