NT housing market continues to grow as house prices climb across cities
Darwin remains Australia's cheapest capital city to buy a home, but interstate investment is shifting the needle. (ABC News: Roxanne Fitzgerald)
In short:
House prices in Darwin rose more in the year to November than in any other capital city in the country, according to Cotality.
Analysts say steady rental yields of 6.3 per cent are driving demand from interstate investors, who are pricing first home buyers out of the market.
What's next?
Market analysts predict price growth will continue into early next year before cooling in the second half.
When real estate agent Ursula Watson joined the profession four years ago, she never imagined the Darwin property market would be as fiercely competitive as it has been in 2025.
With a large contact book of property-hungry interstate buyers' agents, Ms Watson said many homes can now be sold before they ever get listed on the market.
"It's pretty competitive when it comes to owner-occupiers and first home buyers," Ms Watson said.
"It's a bit of a struggle for them at the moment because obviously they're being outbought by the investors."
Ursula Watson says its a tough market for first home buyers, when they are competing with big investors. (ABC News: Michael Franchi)
In the first half of this year, interstate investors were increasingly turning to the NT to snap up some of the country's most affordable homes.
December data from property research firm Cotality shows Darwin house prices grew by 17 per cent this year, a larger increase than any other capital city by far.
Home values rose by 1.9 per cent in November, accelerating from October's 1.6 per cent increase.
Despite the rapid growth, Darwin's median dwelling value remains the lowest of Australian capital cities at $578,871.
Market analysts attribute the growth to consistent rental yields, which are holding steady at 6.3 per cent in Darwin.
It's a figure analysts say will continue to drive strong demand from interstate investors, drawn in by attractive financials.
"We're seeing a lot of increase in investment activity as well as some good fundamentals like a decent increase in jobs growth over the past year," Cotality head of research Eliza Owen said.
"I think for an investor Darwin looks very good on paper,"Ms Owen said.
Palmerston house prices have surged by 24 per cent this year, the biggest annual increase in the country for areas of comparable size. (ABC News: Hamish Harty)
Ms Owen said the number of loans approved for the purchase of investment properties shows the true scale of the competition faced by Darwin locals hoping to buy a home.
"Over the past five years, we've seen an average of about 190 loans per quarter secured for investment property purchases in the NT. In the year to June that ballooned to 430 loans this quarter," she said.
While Ms Owen expected the growth to continue in the short-term, she said there were some "headwinds gathering" that could temper further growth next year.
"What happens is that you might get more and more investors crowding into this market until it stops delivering the same capital growth or until it stops delivering the same rent yield, which compresses as values rise."
Eliza Owen says gathering headwinds could temper growth in the Darwin property market next year. (ABC News: John Gunn)
She said you only needed to look at historical data to see Darwin's property market was characterised by "very strong, cyclical movements".
Predictions of an impending price correction are shared by Domain's senior economist, Joel Bowman, who said competition would remain tight until some buyers started to get priced out of the market in the latter half of next year.
"We're expecting strong price momentum to continue during the first half of next year before conditions will start to cool during the second half, as affordability constraints really start to bite," he said.
Joel Bowman says first home buyers should broaden their horizons to include suburbs further afield. (Supplied)
While Dr Bowman agreed strong interstate investor activity in Darwin had driven prices up, he said the phenomenon was not unique and had "largely played out in a lot of other capital cities as well".
Ms Watson, however, did offer some advice for first home buyers in Darwin "feeling out-priced by what's been going on in the market".
"My suggestion to them is to broaden their search to other suburbs as well."