Demand for rental properties in Darwin continues to remain strong following seven consecutive quarters of increases, which is now the longest period of uninterrupted rental growth that is expected to last throughout the remainder of this year, reports show.

House rental rates in Darwin went up 1.7 per cent for the first quarter of 2022 to $610 per week, almost 11 per cent higher than last year. Unit rents also increased by 4.2 per cent for the quarter to $500 weekly. This figure represents a 16.3 per cent growth over the same period last year.

The strong demand for rentals experienced throughout 2021 has continued over the first quarter of this year fuelled in part by an identified housing shortage of 11,500 dwellings in 2020, which figures showed required 1900 homes to be built a year to keep up with demand but the target has not been reached for the last six years.

Last year, Darwin recorded the highest rental yields in Australia for both houses and units. For houses, the suburbs of Gray and Woodroffe came in at number one and two nationally, with yields of 7.5 per cent and 7.1 per cent respectively.

CoreLogic also reported that despite enormously high figures for Darwin’s housing sector, 2021 has also seen a softening of growth trends, with several of the driving forces behind the upswing losing some impact in recent months.

The restraints of tighter credit conditions, lessening housing affordability, and a higher level of listings being added to the market, have contributed to a softening in the rise.

Darwin’s rental yields are predicted to continue to be the highest in the jurisdiction for 2022, but the growth is unlikely to see the highs over the last two years.

Since 2014, there were several years of declining rents in Darwin. While rental supply has remained tight, rental demand in Darwin has increased significantly against the background of falling rents in previous years.

As rents increase in Darwin, the yield has the potential to improve even more as rents are still slightly below the 2014 levels with still enough room for an upward increase.

“It’s almost back there [to 2014], based on some of the rental properties I see,” said North Property NT Sales & Marketing Consultant Kerri-Ann Laurence.

“A townhouse in Driver was leased for $570/week back in 2014, down to $380/week by 2019 and last week was leased for $560/week. That property leased on the first day of being available with six strong applications.”

The Absolute Real Estate vacancy rate has been well ahead of the average Darwin vacancy rate throughout 2020 and now sits at 1.3 per cent. Currently, Darwin has an average of 10 days where a property is vacant compared to the industry average of 30 days.