Infrastructure Pipeline Strengthens the NT’s Appeal

For decades, Darwin’s residential property sector has offered investors returns they could only dream of in the more populous capital cities. 

But what’s making the appeal of the Northern Territory even greater over the next 12 months is its long-term infrastructure pipeline: an investment program that could bring employment-generating opportunities to Darwin that haven’t been seen since completion of the Ichthys LNG facility around a decade ago.  

In the works for the region is:

• a record $5bn road funding commitment from the NT Government;
• $6bn worth of investment between the Australian and US governments for new and improved defence assets;
• $1.5bn to develop commercial grade facilities in Darwin suited for resources or manufacturing enterprises;
• the recently announced $4bn Federal-Northern Territory governments’ investment in housing in remote communities, accounting for up to 270 homes to be built each year over a decade.

The programs follow-on from the recently completed $250m expansion of Charles Darwin University in the city’s skyline – completed in time to welcome international students back to Australia – and investigations into the feasibility to transport gas from Tennant Creek to Darwin. 

Will Johnson, Managing Director of Herron Todd White in Darwin, said the city had been previously exposed to surges and drops in demand. However, the breadth and diversity of new additions in the area would add resilience to the market and greater comfort for investors. 

“The Darwin market hasn’t experienced the capital growth that other capital cities have seen,” said Mr Johnson. 

“From an affordability perspective, Darwin is very accessible for investors. 

“You can purchase a house for $500,000 in Darwin and be receiving a rental return of circa 5.5%-6%. You’d be hard-pressed finding a house at that price point in Sydney or Melbourne and gross rental yields are half of what’s on offer in Darwin.” 

LJ Hooker Darwin Managing Director David Loy said the economic activity slated for the city had created an air of optimism in the NT. 

“Over 2023, there was uncertainty over interest rates,” said Mr Loy.  

“We’ve seen the RBA maintain the cash rate at its first meeting for 2024 and inflation data is heading in the right direction. Investors are more confident in their decision making than they were this time last year and are looking to new opportunities. 

“The NT is stepping into a purple patch of infrastructure activity at a time when there’s already a skills shortage on the ground. We’ll likely see workers follow the jobs trail, increasing demand for rental accommodation. 

“For investors who are seeking new opportunities over the next 12 months, Darwin is well-positioned.”