Hi all
I am contemplating buying an IP in Darwin / Palmerston. I am looking to spend $300k – $350k which will allow me to purchase a 2 bdr unit.
At the moment there is a shortage in housing, which will make it easy to achieve a rent of $350-$380pw.
My question is, do you think Darwin is a good place to invest for capital growth in the next 5 years? There seems to be a lot of unit complexes being built / proposed and was wondering if this will have an impact on the demand for housing.
Thanks in advance
Hello Wren,
Great, I think Darwin will provide capital growth as the current round of projects come to fruition and that the capital growth will run for five years. We have had our time of no gain. Try this link, works better in Firefox http://www.nthomes.com.au/public/nthomes.nsf/Homepage?OpenI know this will sound like hype but with ~34bn worth of project signed off and going there are going to be a lot of new people moving to Darwin soon. See the last page of this government purchasing newsletter from today http://www.icnnt.org.au/media/may%202012.pdf
Certainly a two bedroom unit in Palmerston and area will not be unique, according to the Chief Minister on the radio this week there are perhaps 3,700 dwellings approved for construction across all Darwin region (includes Palmerston) but not commenced due to no bank finance available.
If you can find a decent two bedroom unit in Darwin and Northern suburbs, consider buying it, it is a bargain at $300k
Rental vacancies are very tight, we are cleaning up one of our properties this weekend, and my thought is that the asking rent is going up all the time it is vacant.
Here are some stats for 4 Darwin properties
1) House held 21 years average 8% (original condition), now worth 4 times original purchase price
2) House held 12 years average 11% (renovated), now worth 3 times purchase price
3) Unit held 13 years average 6% (original condition), almost doubled
4) House held 7 years average 9% (original condition), has not doubled yetPre GFC we were seeing 17% a year growth.
Regards
Thanks Nick for your response. I have been using http://www.nthomes.com.au, it is a very valuable resource.
I have had a look at units in the suburbs, but Palmerston appeals to me more. A unit in Nightcliff for example is generally older and needs more work than a unit in Palmerston. If I was into renovating etc I would be more inclined to purchase in the suburbs.
Thanks for providing those stats, very interesting to see
Cheers
Hi, I have a couple in darwin which I'm about to start renovating Im pretty sure there is capital growth still to come. I'm a bit hesitant with units as there seems to be lots around and lots more to come.
Theres always people moving up here but there seems to be alot leaving too because of the cost of living. Impex is only meant to be increased demand in the first few years construction phase ive heard.
Even though some say it wont increase demand because the Howard Springs workers village but Im sure there not all single blokes who will wont have families so they will need proper houses / units.
Anyways Im sure your on the right track.
Hi Wren10,
The construction of the new prison will also bring in a lot of workers that will require accomodation in Darwin.
In my personal opinion, it’s not the best place. However, real estate investment is a pretty stable business. If it were me though, I’d invest somewhere in Melbourne, preferably the east side
http://www.bigpondmoney.com.au/australias-population-hot-spots <– Here’s a link to all the population hotspots within Australia, if you decide not to invest in Melbourne.
Just a quick edit, it was 2,700 dwellings approved but not built. My partner heard the news article better than I did.
Nickmattsta wrote:If it were me though, I’d invest somewhere in Melbourne, preferably the east side
Why's that ? Melbourne would be amongst the last places I'd be looking at the moment. Seems to have overshot the market in recent years, rental vacancy rate heading north when I last looked, inner city over-supply looming when I last looked and a raft of economic indicators showing the Victorian economy is struggling at the moment.
Check this http://www.theage.com.au/business/victoria-takes-a-battering-20120601-1zng5.html
Further to my previous comments I caught this article online article.
Now I appreciate central Melbourne is not the eastern suburbs but there is a possibility of a knock-on effect flowing through to some of the outer burbs.
Hey Keenan, where abouts in Darwin are your properties? Just out of interest, what do you think about Katherine area? Any potential for capital growth?
Cheers
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