Raine & Horne Darwin reported its property sales in May 2018 were 50% higher than in May last year.
“I’ve received some feedback about my calls in recent months that the Darwin market has hit bottom. However, we’ve seen investment firms such as fund managers such as AMP Capital now taking the same position,” said Glenn Grantham, General Manager, Raine & Horne Darwin.
“As a consequence, there’s been a spike in enquiries from professional investors from the southern states who have heeded the positive messages about the Darwin market.”
The rise in enquiry and sales turnover means that owners can be more positive than 12 months ago about the prospect of selling a Darwin property, noted Mr Grantham.
“Darwin is a far more active marketplace now with increasing numbers of local buyers and interstate investors snapping up bargains.”
Darwin’s market-leading investment yields of 5.8% are central to interstate investor demand, confirmed Mr Grantham.
“We’re fielding more enquiries from professional southern state investors who are seeking positively geared investment opportunities.
“A positively geared property means tenants are paying the ownership costs associated with an investment property, while investors have fewer cashflow issues.”
Apart from yields, investors recognise that Darwin is set to be the fastest growing capital city market by May 2019, according to Mr Grantham.
He added, “Equally, stronger economic confidence in Darwin is encouraging a rush of enquiry from local owner-occupiers seeking to upsize into a new property.”
However, Mr Grantham warned that while enquiry and sales activity is increasing, higher prices will take time to follow.
“People need to understand the bottom of the market doesn’t mean an immediate increase in prices,” Mr Grantham cautioned.
“First we see a boost to sales volume as properties that have been sitting on the market for a while begin to shift.
“Once the property surplus is sold off, then we’ll begin to see prices start to move as demand begins to outstrip supply, and this situation will most likely occur by the middle of 2019.”
That said the Raine & Horne Darwin general manager admits that he doesn’t own a crystal ball and that it’s possible Darwin values could move sooner.
He explained, “There’s a common investment motto that ‘it’s about time in the market, not timing.’
“In other words, it’s almost futile to try and speculate about when property values in Darwin will rise – and usually it’s only six months after the fact that we realise prices have taken off and buyers have started paying more for an inner-city apartment or a house in Jingili.
“The clear message is that values have bottomed, and there’s probably no better time than now to buy a well-priced Darwin property.”