COVID-19 safe keeps Darwin real estate intact
Property market values in Darwin have proven extremely resilient over the last three months, according to CoreLogic.
“It is very encouraging Darwin’s property values are up nearly 2.5% over the last quarter. But realistically, the only way is up when the market has been skating along the bottom,” advised Glenn Grantham, general manager, Raine & Horne Darwin.
He noted volumes are significantly smaller than other capitals.
"One or two major transactions can impact median values in Darwin.
"Also, some of these contracts exchanged before lockdown restrictions applied.”
Grantham continued, “Due to COVID-19, there is a shortage of listings in Darwin, which is helping to support values.”
On the demand side, Grantham says the Northern Territory’s low infection rate of 0.4% has caught the eye of interstate investors and downsizers.
“Buying enquiries from interstate are much higher than earlier in 2020, but with our borders still closed, local owner-occupiers are dominating our sales transactions.”
Grantham said the most popular property in May was an elevated, three-bedroom house at 21 Graham Street, Stuart Park (pictured below), which is on the market for offers over $590,000.
“We’re negotiating with three buyers, while 25 groups viewed the property by way of individual appointments in accordance with COVID-19 protocols.
Border closures are impacting contract negotiations, advised Grantham.
“We have an owner of a two-bedroom apartment in Parap, who hasn’t yet been able to make it back across the border to pack up his home.
“Once the owner returns to Darwin, he then has to self-isolate for two weeks in the apartment.
The sticking point for the buyer is the settlement date, which depends on the vendor negotiating with border control to let him back into the Territory. We are still waiting to see how this plays out.”
The capital city’s investment markets are also holding steady with median yields at 6% and vacancy rates at 4%, according to Grantham.
“With restrictions in place, people can’t move away from Darwin, and this situation is keeping our rental market steady.
“Likewise, JobKeeper has helped significantly ensuring we’ve had minimal hardship requests from tenants.”
Raine & Horne Darwin found a buyer for a house at 80 Francesca Circuit Humpty Doo off-market in just three days last month.
“The five-acre rural property is under contract for a price in the $500,000s, which was spot on our expectations,” Mr Grantham said.
“We have been selling eight to ten properties a month at this time of year in recent times.
“With values relatively stable and sales continuing to tick over, property markets in the Northern Territory seem relatively steady against the effects of the pandemic.”
Interstate buyers are still a significant factor in sales enquiries and are taking advantage of virtual technologies to conduct property inspections, Mr Grantham noted.
“Virtual inspection technologies are assisting the marketing of 80 per cent of sales listings and 95 per cent of our rental stock.”
Darwin’s rental market metrics are also steady with vacancy rates of four per cent the same as earlier in 2020.
Although Mr Grantham noted COVID-19 has directly impacted the rental market.
“We have recorded a 50 per cent reduction in new tenancies because border closures have kept interstate workers who usually move here for work at home.”
However, a 50 per cent reduction in tenant vacates has offset the fall in new tenancies.
Mr Grantham says rental arrears have only increased marginally from six to seven per cent in April.
“Also, only three per cent of our tenants have made hardship applications seeking rental reductions.
