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Darwin’s property market is set to get a boost from the significant infrastructure projects and investments across the Northern Territory, according to an expert.
General manager for Raine & Horne in Darwin Glenn Grantham said that the government’s $2.5 billion commitment for the state’s infrastructure spending in this week’s federal budget, in addition to the pipeline of technology and aviation developments across the territory, will help sustain strong property price growth in the local market over the next decade.
“The massive budget investment, along with projects such as manufacturing of the legendary Albatross flying boats in Darwin and the Darwin H2 Hub, a renewable energy generation and hydrogen production plant, will generate thousands of new specialist jobs in the NT capital,” he stated.
The local expert explained that the increased demand from the labour market boost would put further pressure on the already tight rental market.
“We’ve had huge demand from rentals, and our vacancy rates since COVID have been almost zero. It’s what we call a virtual zero, and this factor is attracting strong southern state investor interest,” Mr Grantham stated.
“[This] will support generous long-term growth, as more southern state investors start to absorb the economic and real estate potential offered in Darwin,” he added.
The federal budget commitment to the state’s infrastructure spending includes $1.5 billion for planned equity to finance the construction of common user marine infrastructure within the Middle Arm Sustainable Development Precinct.
“This precinct will provide a pathway to a decarbonised economy by helping emerging clean energy industries,” Mr Grantham commented.
Additionally, the infrastructure spending package also includes $440 million in planned equity to augment the development of regional logistic hubs, $350 million of additional funding earmarked for the sealing of the Tanami Road and upgrading the Central Arnhem Road and a further $332 million allocated towards the Northern Territory Strategic Roads Package.
The budget commitment comes in the wake of an announcement by the Northern Territory government on 15 August that it has signed a memorandum of understanding (MOU) with international renewable energy company Total Eren for a new green hydrogen project.
The MOU outlines how the involved parties would collaborate to develop the Darwin H2 Hub, which has the potential to generate over 2,000 jobs during construction and 175 ongoing employment during its operation and speed up a net zero economy.
On 8 December 2021, the Northern Territory government also announced that it has partnered with Amphibian Aerospace Industries (AAI) to support the launch of an aircraft manufacturing sector in Darwin.
Under the collaboration, a modernised version of the Albatross flying boat featuring digital avionics and enhanced turboprop engines from Pratt and Whitney will be manufactured in the Northern Territory capital.
“The Albatross project will require 1,200 expert workers given the extremely specialist technology involved in these seaplanes. These employees will be sourced overseas and will only add to our tight rental markets,” Mr Grantham stated.
Between the Albatross project and the H2 Hub, the expert estimates that around 3,200 workers will be added to the territory’s population of 160,000.
Mr Grantham said that the population boost would be a “big deal” for the Northern Territory capital’s property market.
“It will further squeeze Darwin’s extremely tight rental market and contribute to long-term average annualised capital growth of 7-10 per cent over the next decade as more investors pounce on local property opportunities,” he said.
“We already have an extremely tight rental market with vacancy rates close to zero and yields as high as 8 per cent that are at least double those investors can find in the southern capitals.”
He concluded that the combination of increased demand with the strong market yields, record-low vacancy rates and decent capital growth would rouse strong interest from both interstate and intrastate buyers.
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