Darwin city houses offering investors highest rental yields in NT, but Alice Springs suburbs the best investment

Houses in Darwin City are offering investors the highest rental yields in the Territory, but new data from REA shows Alice Springs suburbs are the best investment.

HOUSES in Darwin City are offering investors the highest rental yields in the Territory, but new data from REA shows Alice Springs suburbs are the best investment.

It comes as the regional market continues to have strong growth.

REA Group economist Paul Ryan said that regional areas often offered more affordable prices and stronger rental yields. He said the local property market, particularly in Darwin, had seen a significant uplift, with recent data showing home values had achieved record annual growth of more than 20 per cent.

House rents in Darwin also achieved record annual growth in the year to May, rising by 21.9 per cent, according to a recent report by CoreLogic.

Houses in Darwin City are offering investors the highest rental yields in the Territory, but new data from REA shows Alice Springs suburbs are the best investment

The median asking rent in Darwin is now $550, according to the latest REA Market Trends report, while the median house price is $490,000, up 5.8 per cent in the past three months alone.

The indicative gross rental yield in Darwin is now 5.84 per cent, with Mr Ryan saying that a return of 5-6 per cent was “very high”.

New data from REA shows the Territory suburbs where investors should be looking right now across three key metrics.

In terms of cash flow, which is median monthly rent minus median monthly mortgage repayments, the biggest winners are house investors in Araluen, who could potentially pocket $1209 a month after expenses.

In Braitling, house investors are also coming out ahead, with a potential profit of $931 a month. Unit investors in Gillen ($890) and Larapinta ($815) are also sitting pretty.

Houses in Nightcliff have seen the biggest 10-year capital growth, up 17.2 per cent, while houses in Darwin City are enjoying the highest rental yields, averaging 7.9 per cent, according to the REA data.

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For rental demand, its woo hoo in Humpty Doo, where demand has skyrocketed a staggering 39.2 per cent in a year.

“Darwin has a pretty diverse economy so there are a lot of factors in its favour,” Mr Ryan said.

“There was a bit of a hangover from the resources downturn, but it seems to be seeing a good boost now.

“I think this story has more to play out and I think rents will continue to grow in the regions.” Mr Ryan said that while vacancy rates remained tight, rates remained low and rents continued to rise, investors were in a good spot to buy.

The new data came after the REA Insights Buy or Rent Report 2021 was released earlier this year, showing 99.1 per cent of all residential dwellings were cheaper to buy than rent in almost every suburb in the Northern Territory. Based on the figures, the NT had the highest proportion of suburbs where it’s cheaper to buy than rent of any state or territory in Australia.