Darwin has pipped Sydney to become the most expensive place in Australia to buy a home, with an average price climbing to $549,000, according to the Australian Bureau of Statistics.
Driving the price increase has been the city’s close proximity to the liquefied natural gas resource industry.
Australian Property Monitors chief economist Matthew Bell said there are a number of workers migrating from Western Australia and South Australia to Darwin where employment growth is still strong.
“On our numbers we have got house prices and unit prices at close to 20 per cent growth for the year,” he said.
There is mounting concern however, that this rate of growth is unsustainable.
“The market in Darwin has been growing fairly consistently since 2001,” RP Data national research director Tim Lawless said.
“When we’re talking about paying around $500,000 for a house you start to get affordability constraints entering the market,” he said.
According to Mr Lawless, the capital growth has been matched by competitive yields of about 6 per cent.
“Rental rates have gone up by 20 per cent in the last year alone. I don’t think prices are going to go backwards at all, the economy’s too strong for that, but I really don’t think it can sustain a rate of 16 per cent growth per annum,” he said.