Data from Raine & Horne indicates that the number of properties that came on the market in Darwin in January 2022 was at least 75% higher than in the same month in previous years.
Glenn Grantham, managing director of Raine & Horne, noted that the city’s 15% rise in property values in 2021 – the highest annual growth rate in a long time – had motivated many people to sell.
“There was a flurry of sellers putting their properties up for sale in January, particularly after many people who were recognized last year were very good at capital growth,” Mr Grantham said.
And many of those properties for sale were long-term rentals.
“Given the transient nature of Darwin’s workforce, many tenancy contracts end at this time of year and rather than looking to find a new tenant, landlords decide to put properties on sale in the market,” Mr Grantham said.
But with the city seeing an increase in homeowners looking to buy, Darwin’s rental market is feeling the pressure.
Mr Grantham estimated that 85% of buyers in Darwin are currently homeowners looking for a first home or an upgrade.
A number of factors could mean the current constriction is easing soon.
An increase in off-market sales between owners and renters indicates that renters are taking advantage of low interest rates to buy.
“Some tenants buy their rentals because they love the property so much,” Mr Grantham said.
“These off-market sales not only take the tenant out of the rental market, but also long-term investment properties.”
A smaller pool of rental properties, coupled with strong tenant demand, should push investment returns higher, however, attracting those looking for a prime location to expand their real estate portfolio.
“If more local and southern state investors jump into Darwin’s real estate market and give homeowners a run for their money on properties…we will be able to meet some of the demand for rental properties. “, predicted Mr Grantham.