January has got off to a flying start for the Darwin rental market with a clear increase in tenant activity evident from increases across the board in open inspection attendance and enquiry. All very positive signs to kick off the year.
In the month of January Ray White Darwin saw an increase of 6.6% in the rents across our portfolio and an increase in tenant enquiry in one week of nearly 12%! These are mammoth numbers, this continued into February with more good news being reflected in our open inspection attendance numbers increasing by 10% last week.
The real tester for our market has been our entry into February which has been just as positive. Darwin rental yields have remained the strongest out of all Australia’s capital cities sitting at 5.8%, another good sign when looking at our market place over all. To quote the REINT CEO Quentin Kilian “In fact it is 5.3 percent on Houses and 5.8 percent on Units. If you’re wondering how that fares against other Capital Cities, then extremely good would be the best explanation. The National Average is 4.6 percent on Houses and 4.7 on Units; the Capital City Average is 3.2 percent on Houses and 3.9 percent on Units; and both Sydney and Melbourne are under 3 percent on Houses and under 4 percent on Units.” A fantastic sign for investors in the Darwin and Palmerston regions.
An interesting statistic to keep an eye on is the Darwin median rental price which last reports suggest was sitting at $471.50 in December 2019, a considerable increase of 2.5% here per annum however the flip side of this is the median unit price for Darwin overall has slipped by 0.6% per annum to $338.00 per week. However over all per quarter both statistics have seen an increase in comparison to last quarter which is a strong sign for the wet season and this time of year. A positive take away overall.
Vacancy rates have also declined across the board in both Darwin and Palmerston, giving landlords some more positive signs and some relief, both the Darwin and Palmerston housing markets are sitting under 6% with an overall drop of 1.1% overall.
Although we are seeing a lot of positivity coming into the new year there is still a long way to go until things have fully recovered. Investors, where possible should continue to be aware of the competitive space they are in with other landlords also competing to secure tenants. The key to investment success this year will be maintaining property presentation, keeping up with marketing trends and continuing to be strategic with pricing during any vacancy period.
It is no secret that the Territory has been struggling with population decline over the past few years thus adding to our over supply and lack of demand problem. At the moment there does not seem to be any quick answers or solutions to the issue but in my opinion a long term investment to help boost employment locally and provide sustainability is what is needed to help the Territory see this through. As always I will keep you posted should any exciting projects cross my desk to this effect but until then my advice to our investors is to focus on strategy, presentation and keeping their property leased for as long as possible.
Business Development Manager – Ray White Darwin