Darwin Blog

Our General Manager Glenn Grantham recently had a chat with Talking Property, about Australia’s most northerly property boom town. Listen below, with the team of Harvey Deegan, Rob Druitt and Rod Ryan brought to you by REIWA.com.

Harvey: Welcome along to this edition of "Talking Property" with Rob Druitt and Rod Ryan. How are you, boys? How's things going?

Rob: We're fabulous. All good as always. As I say, it's always a good day to buy real estate.

Harvey: Yeah. It's a wonder you've got time for this program the way you guys are going with all the listings that you've got currently.

Rob: Well, actually we'd like a few more listings. The issue is we're selling them all. So, we need more listings, that's the point. And the market needs it because things are selling and selling quickly. And no doubt we'll hear a bit about that because I think we've got a guest from the Great North, haven't we, that we're gonna here?

Harvey: We are. We're going to Darwin to talk to...and we'll ask him this question, is he officially Australia's only FIFO real estate agent? His name is Glenn Grantham, and he spends half his time in Perth and half his time in Darwin. So that's the best of both worlds, isn't it?

Rob: Yeah. We're very interested to hear from him because I understand the markets are pretty similar at the moment.

Rod: Has his weekends in Broome.

Harvey: He probably does. 

Harvey: All right, boys. Let's head to the tropics to Darwin, in fact. As we say, g'day to Glenn Grantham, general manager of Raine & Horne in Darwin. How's the weather, Glenn? We always ask people in Darwin first up, how's the weather?

Rob: Thirty-four degrees.

Glenn: It's absolutely persisting down.

Rob: Yeah. Well, we've had a bit of rain here in Perth, too.

Glenn: Oh, don't start. 3 inches in a day is just a warmup up here!

Rob: True.

Harvey: Well, we know what the market's like. Frenetic is the word for it down here. What's it like in the Northern Territory?

Glenn: We've certainly been absolutely smashing it up in the Territory. I personally sold 20 homes in January, which was a vast turnaround from probably 20 homes for the entirety of the real estate industry up here last January. So, yeah, we've been pretty pumping.

Rob: It's very interesting, Glenn, that, you know, our markets, both here in Perth and Darwin, they have mirrored each other over the last 5 years, or even longer actually, 10 years. We go back to when the last hiatus in the market we, sort of, synchronized at the same time, and then it fell away in Darwin over the last five years or so, hasn't it? And then it's come back in the last 12 months. So, same as what we've experienced here in Perth.

Glenn: Yeah. Absolutely. I mean, obviously been associated with both markets across that time. I mean, used to be involved with Raine & Horne in WA 12 years ago before I came up here. And that was something that I spoke about with the guys when I first shifted to Darwin, that we very much mirrored them in most circumstances, just behind the West Australian market. I think it's got a lot to do with our economies being dependent upon very similar things aka the resource sector is something that really spurs Northern Territory along, and I know it has a lot to do with WA as well.

Rob: And, what's your specialty, Glenn? Is it residential, commercial, property management, or all of the above?

Glenn: Residential sales and property management. We used to do a bit of commercial, but I got rid of that when I first came up here. Well, before the last four years, we had the largest project marketing arm as well, but project marketing just fell by the wayside there for a long time.

Rob: Well, there were a lot of apartments, weren't there, built in Darwin town and center there? How's that entered the market? It had a similar cycle as what we had in Perth. I think it came back quite a bit, didn't it?

Glenn: Well, it was definitely the part of the market that was potentially the most oversupplied, because, of course, your developers tend to...they're making hay while the sun shines and get halfway through a 20-story building, and the market changes, you can't stop building the 20-story building. You've gotta complete it.

So, as a consequence, you know, we ended up with, in Darwin, an oversupply of hundreds of apartments that developers were holding on to. Rather than if you're in a significant capital city like Perth, it's probably thousands or tens of thousands that it would take to actually oversupply that market, where we were left with, maybe 300 apartments that hadn't sold off the plan, that then needed to be tenanted and held by the developers. It's been the longest take-up in this existing marketplace up here to start to see a medium price rise in that area.

Rod: Where are your buyers coming from, Glenn? Are they local buyers, or from interstate, or investors, or is it all, like, friends, or?

Glenn: Our buyers have been local for the last four years, and it's very much been...certainly in the last 12 months, the predominance has been in the first-home-buyer market, because the initiatives and incentives up here, you know, we're giving these young first-home-buyer couples anywhere from $35,000 to $53,000 if you were building a new home. So it's pretty significant.

And that was just a spur on the market that was otherwise dead, you know, and to give some multiplier effect and some knock-on in the economy. You've gotta remember we're only 140,000 strong, or weak, whichever way you look at it from a population perspective in Darwin, so it doesn't take a huge number to make a huge difference when it comes to population. Well, I'm not 100% sure whether you would be aware because I know Western Australia was trying to succeed there for a while, but...

Rob: How it's been for the last almost 200 years.

Glenn: And still trying. Yeah. With regard to the borders, etc., Northern Territory was the first to open. We turned around and said, "We'll take all your poor and pitiful and come up here and join us in the Territory climate that hadn't had any COVID." So, as a consequence, they opened on July the 7th, I think it was.

There's been over 300,000 people across the border into the territory since that time, of which around about, the estimates are 5,000 to 10,000 people have settled here. So, what that means is, you know, we've had somewhere between a 5% and 8% increase in population of people from down South that are escaping COVID, and so that's been a huge driver for our market when you've only got 140,000 population in the first place.

Harvey: Just looking at your website here, Glenn, the rental aspect of your business, you seem to have a lot of properties for rent. What's your occupancy rate like up there?

Glenn: So, we're running at what I call virtual zero at the moment from a vacancy perspective, and that is we're running under 2% vacancy rate. And that vacancy rate is basically everything that we've got advertised has just been vacated or still has tenants in there vacating. So it's really a changeover vacancy. Our actual vacancy of number of properties that are available right now, you know, if you wanted to move in tomorrow, around about 12%, and our rent roll is 1,700.

Rob: Oh, it's very low.

Harvey: Wow.

Glenn: I mean, it's significant...you know, it's very, very low, and really they are just properties...they're just waiting...you know, in some circumstances we've got 10 to 20 applications on properties.

Rod: Gee-whiz.

Rob: So, Glenn, you've got a lot of pressure on rents going up?

Glenn: Yeah.

Rob: And is it COVID restrictions like we find in WA?

Glenn: We haven't had the inhibitor of having our government turn around and put a limitation on that. So, our owners have been able to get fair market for it.

Rod: Glenn, this might seem a little bit of a different question, but I remember Cyclone Tracy quite well, and after that, I would imagine that they changed a lot of the building regulations, and so on, to allow for cyclones, basically. Is that all put the cost of, you know, building properties up a lot, or is that all been forgotten now? In other words, if you're going to build properties in Darwin, do you have to, sort of, put your hand in your pocket to allow for better construction than normal? Is that right, if I made sense for the question?

Glenn: I don't know that you call it better construction, but certainly a more sturdy one. So, there is cyclone coding that needs to be taken into account in the Northern Territory. That was rumoured to add to a new home that you're building anywhere up to $100,000. Lot of that had to do with builders. You know, certainly would make 10% to 15% difference in your overall build cost having to comply with the requirements of cyclone coating, and also the supply of materials, you know.

Supply of materials to the Northern Territory, it's a lot more expensive. We talk about Westerners or Perth being a remote capital city. Darwin is an extremely remote capital city and doesn't have the economies of scale to be producing a lot of things, so we have to import a hell of a lot of 'em, and there's a fair markup on that stuff.

Rod: Yeah. Not only that, but it's pretty difficult to use the port unless you can speak Chinese, too, I suppose, from what I understand. But, anyway...

Glenn: I'm not even gonna get into that one, mate.

Rob: Oh, a leading question that one, ey, Glenn?

Glenn: I mean, we just got 2,500 U.S. Marines arriving here next week. I think I'll stay well out of that.

Rob: Just to quickly change the subject, where do you see the market going now? With the pressure obviously excess of demand over supply, where do you see things going in Darwin, both rental and sales?

Glenn: We started an upward cycle pre-COVID, much like what was happening in Perth. I think that this was just, sort of, like...this exacerbated the quickness of our initial part of recovery, I think. Same as Western Australia, you know, the resources sector is certainly booming along, so we're experiencing the benefit of that as well.

And the infrastructure plans that were put in play by our government are creating jobs that are jobs that are sustainable rather than FIFO. So that's something that I think that there's a lot of positivity behind the economic recovery in Darwin. I actually, you know, I'd call it early, and I would say we're actually on a boom. COVID's just accelerated that.

Harvey: Glenn, just before we let you go, one final question. Our esteemed producer, Steve "grumpy" Collins, has described you as Australia's only FIFO real estate agent because you spend a lot of time in Perth and, of course, you certainly spend a lot of time in Darwin. That must be hard to choose between the two.

Glenn: It's been an interesting one. I instigated that about December 2018, after having been up here for 11 years. And I've got a very solid team up here. I've got a PA as well as my sales associate that runs around for me. So, a lot of leg work can be done, and, like, all of this has to do back a few years ago when the market got lean, we had to go back on tools. So, I've got that support underneath. And I spend the first couple of weeks of every month in Darwin and the last couple of weeks in Perth because that's where my family is.

So, yeah, it's been something that I've been looking to implement, and it's worked extremely well. Our turnover and our performance has accelerated during that time. Probably a fair few market factors in there as well, but certainly has been a pretty smooth operation. So, yeah, I think I'm the first. I know there's a lot of guys up here who come and see me about and say, "How's that going for you? And, do you reckon you could help me implement it?" And I go, "Not while you're my competitor, but I do have some spare [inaudible 00:11:21]."

Harvey: Wonderful stuff. Glenn, thanks for joining us. All the best with Raine & Horne in Darwin, and we'll have you back on Talking Property sometime in the future.

Glenn: Love to. It's enjoyable. Thanks, guys.

Rod: Thanks, Glenn.

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