Darwin at risk of rental unit oversupply, new report claims
DARWIN is among the top 10 places in Australia that are most at risk of new units flooding the rental market, a new report warns.
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DARWIN is among the top 10 places in Australia that are most at risk of new units flooding the rental market, a new report warns.
The RiskWise Property Research report reveals the oversupply could weaken Darwin’s strong rental market, leading to an elevated risk for investors.
RiskWise chief executive Doron Peleg said areas with high unit oversupply carried “a very high risk” for property investors that had further increased due to the COVID-19 pandemic.
Darwin’s rental market is fairly tight at the moment, with the vacancy rate sitting at about 2 per cent in August — the city’s best in seven years.
Mr Peleg said his concerns lay with a large supply of units he claims are still in the pipeline for Darwin – 1204 new units over the next 24 months – an addition of 32 per cent of the current stock.
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However, Real Estate Institute of the NT’s chief executive Quentin Kilian said he doubted Darwin would actually see that level of development over the next two years.
“I’m aware of a few unit projects going up but nothing of that size,” Mr Kilian said.
“You would think there would be some big holes in the ground around the city by now if those numbers were accurate.”
Mr Kilian said Darwin’s vacancy rates had improved this year for a combination of reasons, including interstate arrivals filling those units.
“We’ve seen many people living in shared houses splitting up as rents reduce, meaning people are able to afford a place of their own,” he said.
“There are also a few less rental properties on the market now due to those reductions.”
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Rental values have slumped across the country, according to CoreLogic, falling 0.5 per cent in the June quarter — the sharpest decline in two years.
The 10 postcodes most at risk of unit oversupply include (not in order):
NT 800 Darwin
VIC 3000 Melbourne
VIC 3008 Docklands
NSW 2020 Mascot
NSW 2155 Rouse Hill
NSW 2150 Parramatta
NSW 2250 Gosford
QLD 4101 West End
QLD 4217 Surfers Paradise
SA 5000 Adelaide
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