The start of the year has been calm for investors in the Darwinian real estate market. Will this continue for the rest of the year?
Jeremy Callan, real estate expert at Herron Todd White, said investor activity appears to be stagnating relative to the owner-occupied segment.
"We find that rental sales results in the housing segment continue to be weak as owner-occupiers dominate both the housing and housing markets," he said.
In fact, as the start of 2021 for Darwin continued the recent surge in demand and conditions experienced in the second half of 2020, the majority of this recent improvement was driven by early homeowners seeking to access strong government incentives.
However, rental demand has started to increase, as recent arrivals to the city indicate. Most of the suburbs are starting to increase their median rents.
"These rent increases, combined with an increasing vacancy rate, are key factors that we believe will see some return to the investor market," Callan said.
For example, four-bedroom units in Palmerston saw a 13.2% increase in the median weekly rental rate to $ 600. The current median price of homes on the market is $ 465,000. This makes possible a yield of more than 5%.
"We can see investors being able to achieve these returns for the remainder of 2021 and we believe that will bring them back into the Darwin market," Callan said.
The market for units should follow the same pattern. Unit rental rates in Palmerston also showed a good increase, with the median weekly rent for three-bedroom units coming in at $ 430.
Overall, Callan said the outlook for Darwin is positive, a stark contrast to the same time period last year. However, if government incentives have boosted sentiment in the housing market, it remains to be seen how the market will be affected once these support schemes end.
"The fundamentals of an economic recovery have not changed. If no major projects start and there are no more job opportunities, we could see many newcomers to Darwin returning south, ”Callan said. "This problem will remain in 2021, but with now historically low interest rates and strong current yields on homes and units, we expect a steady return to the Darwin market for investors."
Top suburbs:
Eagle vale
,
Westmead
,
Alexandria
,
woolloongabba
,
homebush
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