Darwin’s prospects are so positive that seasonal price dips are beginning to lose momentum
The top end is establishing itself firmly on the top shelf for Australian property markets, with giant resource investment, an influx of workers to support the projects and a continuing shortage of properties required to meet the increasing demand.
Price growth is already in full swing and has been for some time in Darwin, making the wet and dry season calendar almost redundant for the first time in memory.
“Darwin traditionally has this volatile price buying activity model, which reflects the net interstate migration that comes in and out of the territory largely because of the wet and dry season,” says Andrew Wilson, senior economist at Australian Property Monitors. “But if we look at the underlying growth and activity, there’s definitely an upward trend, once we take out the seasonality. We’re starting to see underlying growth rather than the big dips and rises that we usually get in Darwin.”
Continuing supply shortage
Darwin is currently under-equipped to house all the workers that will be flowing in for projects such as the $34bn Ichthys LNG project based in Darwin Harbour. The lack of supply can be put down to the seasonal migration as mentioned previously.
“There have been some larger apartment developments getting off the ground, but Darwin still has a shortage of housing that drives growth,” says Wilson. “That’s because of the disincentive to build there, because of the fact that in the wet season, people do move out and a lot of the employment is seasonal.”
Now that workers are beginning to move in on a more long-term basis, prices and rents may soar if the situation is not addressed.
“Darwin is changing from being a sleepy frontier town into a booming industrial centre,” says Andrew Peterson from The Next Hot Spot. “The suburbs around the middle arm of Darwin Harbour will house those long-term workers. There are plans for another 2,700 units, but they’ve got 3,000 construction workers coming to this project alone, so I think the appetite up there will well and truly consume that supply.”
Suburbs to benefit from Ichthys project
Darwin’s unofficial second CBD Palmerston and its surrounding suburbs will reap the greatest rewards from the offshore resource projects, according to Peterson.
“It’s a real sweet spot up there and prices are already starting to creep away in Palmerston,” he says. “Especially in some of the new suburbs like Bellamack and Johnston, near that middle arm of the harbour; we’ve seen land prices creeping up over the year and this is where workers will be living.”
Peterson believes it is worthwhile for investors to take anything they can that is affordable in the area.
“Construction workers and miners generally aren’t that fussy about where they live and if you can find affordable property around Palmerston then you’re going to do well,” he says. “Darwin’s the second-most expensive urban conglomerate after Sydney and you can see why. No unemployment, well-paid jobs and no vacancies; all those ingredients that make up a strong, healthy market.”
