Rising rents driving more Darwin tenants to buy, local agents report

Rapidly rising rental prices are driving Darwin tenants to buy instead of rent in growing numbers, according to local real estate agents.

RAPIDLY rising rental prices are driving Darwin tenants to buy instead of rent in growing numbers, according to local real estate agents.

It comes after a CoreLogic report released last month found Darwin’s rental prices had jumped by more than anywhere else in Australia in the past 12 months, with house rental prices increasing 17.9 per cent and unit rental prices growing 14.3 per cent, and were continuing to rise at record rates.

Raine & Horne Darwin general manager Glenn Grantham said he had seen Darwin rental prices increase by “upwards of 15 to 20 per cent” in the past year, including one instance in which the rent on a three bedroom, two bathroom apartment was raised by $225 a week. He said the rental hikes were prompting a rising number of established tenants ready to buy their own home to finally take the leap.

“I’ve had a minimum of 10 people this year that were tenants in properties, and I’ve sold them the properties they’re renting … because it’s cheaper for them to buy than pay,” he said. “It’s people who have lived in Darwin for 2-3 years minimum who are saying ‘I’m not paying increased rent, so how about I buy your house?’

“They know they like Darwin and they’re happy to live here and buy a house.

“And there are more and more of them doing that because of the pressure of the increased rental prices.”

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Elders Real Estate sales representative Derek Hart said he had seen rents increase by anywhere from $20-70 recently, with new tenants facing the biggest hikes.

“It’s cheaper to buy now, with the low interest rates and the increase in rents, so they figure they might as well go ahead and buy a property instead of rent,” he said.

“At the moment, it is absolutely cheaper to buy than rent in some places.”

O’Donoghues First National Real Estate residential sales agent Tim Mackenzie said he had noticed the same trend.

“It’s certainly stronger at the moment than it has been for the past three to four years,” he said.

“I have certainly had some sales where the tenants have bought the properties they’re in, and others where the tenants stopped renting to go and buy something else because their mortgage repayments would be similar to the rents they’re paying.

“I think while the market maintains its buoyancy, a lot of people who have the means and ability to purchase instead of rent probably will.”

He said trend was also being driven by renters seeking greater security in the current property market.

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Real Estate Institute of the NT CEO Quentin Kilian said with rental prices expected to rise for the foreseeable future, now was the time for tenants to consider buying.

“Right now, for many people it is a golden opportunity to move from renting to purchasing, if that’s what their choice is, because rents are moving up,” he said.