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Australian dwelling values finish the financial year 13.5% higher

July 5, 2021

National home values rose 1.9% in June, taking annual growth to 13.5% for the financial year. Houses with a yearly increase of 15.6% led the way, compared to a 6.8% lift in unit values.

CoreLogic Head of Research for Australia, Eliza Owen, noted, "This is the highest annual rate of growth seen across the Australian residential property market since April 2004, when the early 2000's housing boom was winding down after a period of exceptional growth."

Darwin maintained the highest annual growth rate across the capital cities, increasing 21.0% in value over the financial year, followed by Hobart (19.6%). Across regional Australia, regional NSW had the highest annual growth in dwelling values (21.1%), followed by regional Tasmania (20.8%).

Interstate investors set to help maintain the Top End’s momentum

In the 2020/21 financial year, Darwin housing values grew by an impressive 21.4% while apartments jumped by 19.8%, Glenn Grantham, General Manager, Raine & Horne Darwin believes the unit market values will be the big mover and shaker over the next 12 months.

Interstate investors are driving demand for apartments in Darwin and represent up to 50% of all real estate buyers in the NT capital, according to data provided by Raine & Darwin. “Over the last few months, there has been a swing towards interstate investor enquiries which is very timely as first home buyer activity is plateauing,” said Glenn.

“For the last five years, interstate investors have been thin on the ground. But savvy interstate buyers are aware Darwin has virtually no rental vacancies, which has pushed apartments yields out to 7%, the best for unit markets in any capital city.” Canberra with apartment yields of 5.5% is the next best.

“Darwin’s apartment yield is 30% higher than second placed Canberra, which the smart money is recognising,” Glenn observed.

While Darwin’s rental yields are incredibly healthy, the sub-$500,000 apartment market hasn’t enjoyed the same level of growth as housing markets in the city’s northern suburbs and other parts of the city. According to CoreLogic, dwelling values have increased by more than 20% in the last year, which is the highest increase of any Australian capital city.

“Near new apartments in Darwin are now on the radar of interstate investors who represent 40-50% of our enquiries. Many of these buyers have never purchased a property in Darwin before.”

Apart from solid yields, Darwin offers interstate investors real estate affordability. Median apartment prices in Darwin are just under $340,000 compared to more than $500,000 in Canberra.

“Not only are our yields better but an investment property in Darwin is well within reach of people who might be priced out of markets in Sydney, Melbourne, Brisbane and even Canberra,” Glenn said.