Resources and infrastructure boom predicted to send rentals to $1000-a-week high

A Darwin property agent has forecast a sharp rise in rents in the next three years. FIND OUT WHY.

RENTS of up to $1000-a-week could be commonplace in Darwin’s CBD within the next three years, as expected economic growth combines with investor interest and an influx of tertiary students in the city.

A Darwin property agent forecast the sharp rise from the current median home rentals of $600 a week.

The cost of renting a two-bedroom apartment in the CBD varies from $600 to upwards of $1200 a week depending on quality and location but these sums will escalate if the economy continues to grow.

Raine and Horne Darwin agent Adam Gulliford told the NT News estimates of $1000 median rents were “conservative if anything”.

“What I’m seeing is a huge amount of investors interstate looking at properties from all areas of Darwin and I’d say we’re already achieving very good prices in all areas and prices are continuing to go up,” Mr Gulliford said.

“One of the attractions for interstate investors would be the buy-in price with the fantastic returns (on the investment) compared to other capitals.

“We’re also seeing long term growth with big projects coming in the next eight years which is helping drive investor inquiry and purchases.”

The so-called ‘project pipeline’ includes a number of prospective multi-billion dollar resource and environmental projects such as development of the Beetaloo Basin gas project, Arafura Resources Nolans’ rare earths project in Central Australia and Sun Cable’s Australia-Asia Power Link, which will deliver Territory-generated solar power to Singapore.

Substantial Defence and civil spending by the Commonwealth government, including a $750m upgrade to the NT’s military ranges and $1.5bn to develop Middle Arm, are also in the pipeline.

Mr Gulliford said the yield-price comparison between Darwin and other capital cities was marked.

“In Darwin, you can buy a $500,000 property in the CBD and get $750 a week rent,” he said.

“If you could even find a $500,000 property interstate you’d be lucky to get $350-400 rent a week.

“Another CBD rental price driver is the new university project will be 11,000 students looking for accommodation in city. A three-bedroom apartment will be renting for $1000 a week within three years.”

Real Estate Institute NT chief executive Aswin Da Silva said the extent to which rents would rise would be driven by the alignment between infrastructure growth and housing development.

“The issue will be infrastructure growth and how fast it can bear fruit,” he said.

“Housing has to come hand-in-hand with infrastructure development.

“If housing lags behind there will be an imbalance in the rental market.

“By how much (rent goes up) and when it goes up to $1000 is dependent on the infrastructure..”

However, Property Council NT executive director Ruth Palmer was not so sure and said there was still Inpex driven supply in-built into the CBD property market.

“Until demand currently outstrips the oversupply from the Inpex boom that will enable developments to get off the ground, this all remains theoretical,” she said.

“Currently the numbers of students at the CBD university and the university’s opening date are merely projections.

“We have seen large projects use fly-in-fly-out workers and those projects like Inpex will look at their own accommodation options for them rather than rely on the general market.”

During the Inpex-driven economic boom, Darwin’s CBD rentals were the equivalent of Sydney’s as an influx of workers placed enormous pressure on existing infrastructure.

Property markets slumped after the project’s construction phase concluded.

To head off expected demand for future housing, the Northern Territory government committed extra funding in the 2022 budget to fast-track groundworks for new suburbs at Holtze and Kowandi.