Darwin and regional Northern Territory have seen the biggest declines in new rental listings nationwide in the past 12 months, the latest PropTrack Rental Report has revealed.

Rental listings in Darwin dropped 14 per cent year-on-year ending December 2022, while the Territory overall recorded a drop of 15.1 per cent in listings. In Darwin, the total number of listings also fell by 9.4 per cent against the rest of the Territory which declined by only 0.49 per cent.

Despite the recorded decline in listings, the average advertised rent in Darwin only went up 1.9 per cent annually from December 2021 but fell 2.2 per cent across the Territory.

Darwin’s rental vacancy rate went up slightly to 2.66 per cent from 2.43 per cent for the period in review.

On the whole, the rental market continues to be tight, evidenced by the strong demand and low supply, causing properties to be leased rapidly, PropTrack Director of Economic Research, Cameron Kusher said.

Darwin’s average rent continues to be constant in the December quarter at a weekly rate of $520 for units and $650 weekly for houses.

“While conditions are still tight, rental price growth slowed significantly over the year’s final quarter, with no change nationally,” Mr Kusher said.

Rental yields

For the financial year 2022-23, the Territory maintained some of the highest rental profits in the country.

The PropTrack Rental Report showed regional WA as the top region with 6.9 per cent followed by the Territory at 6.8 per cent, and Darwin at 6.3 per cent.

“We anticipate that yields will continue to climb in 2023 as rental growth outpaces property price growth. Rental yields remain historically low and are often offering investors minimal premium over term deposit rates while property prices reduce,” Mr Kusher said.

Homeownership

In its report, PropTrack said that the market remained challenging for renters, with few rental tenants moving into home ownership. Investors returning to the market were also rare.

Mr Kusher said that while property prices are decreasing and rents are increasing, it is still significantly cheaper to rent than pay off a mortgage.

He said that the latest housing finance data for November 2022 showed there was $8.3 billion in new lending to investors over the month, the lowest value since April 2021.

“Lending to first home buyers was $3.9 billion in November 2022, the lowest monthly value since May 2020,” he said.

“Focusing on supply via investor lending, the share of total mortgage lending to investors remains below its long-term average, as it has consistently since mid-2017, resulting in fewer investment properties being purchased and exacerbating supply challenge.”