Darwin housing market faces potential turn as homeowners list properties

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Darwin market faces turn

Highlights

Darwin house prices rose 0.3 percent and unit prices 0.8 percent in September, making it the only Australian capital with rising property values.
More homeowners are listing properties to capitalise on firmer values, but analysts warn the window for strong prices may be limited, especially if interest rates rise in November.
Darwin remains the third most expensive capital to rent in Australia, and new investment projects like Beetaloo gas could further boost housing demand in the tight market.

Listings rise as market momentum holds

As reported by ABC News, Darwin is continuing to outperform other Australian capitals, with house prices rising 0.3 per cent in September and unit prices up 0.8 per cent, according to comments from Cotality head of research Gerard Burg.

Burg says Darwin is now the only capital city where house prices are still increasing, supported by limited housing supply and years of subdued building activity. He says the city is recording the strongest property market in the country, although the increase in prices remains modest.

Homeowners such as Lisa-Joy Cron are weighing whether to sell into current strength after a long period of stagnation. Cron, who bought her Palmerston home in 2010 before Darwin's earlier property downturn, says now appears to be a good time to sell, partly because of the potential profit and the prospect of further interest rate rises.

She says she would hope to secure at least $300,000 more than her purchase price if she sold now. A growing number of homeowners and investors are also listing properties to capitalise on firmer values, although analysts say the window for achieving strong prices may be limited.

Rate risk and supply trends shape outlook

Burg says the market may be gradually loosening because more homes are coming onto the market while buyer numbers are thinning. He says uncertainty remains over the direction of housing demand in coming months, particularly if the Reserve Bank of Australia raises interest rates again in November.

Real estate agent Kerri-Ann Laurence says listings have picked up since January, but remain low by historical standards. She says most sellers are moving because of relocation, family needs, or changing housing requirements such as upsizing or downsizing.

Laurence expects Darwin's market to keep rising, pointing to investment potential from projects including Beetaloo gas. She says new project activity can have an outsized effect in a smaller market such as Darwin, where fresh investment may quickly feed through to housing demand.

Darwin is also the third most expensive Australian capital for renters, behind Sydney and Perth, underscoring the pressure on the local housing market even as sales conditions remain tighter than elsewhere in the country.

Our earlier article on UBS’s extended Federal Reserve tightening-cycle forecast explained why the bank expects additional rate hikes into 2027 as inflation pressures stay persistent. We also noted that market pricing shifted toward a higher-for-longer path, reinforcing the risk of elevated borrowing costs for households and investors.

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