Australia's last capital city with a median price under $600k: Pack your bags for Darwin
In a sea of skyrocketing prices, Darwin is Australia’s last affordable city for home buyers.
By the end of the year, Brisbane, Adelaide, Sydney, Melbourne and Canberra will all be million-dollar-plus median-price capital cities, with Perth hot on their heels.
Darwin, however, has a median house price that sits a massive $1 million lower than Sydney’s, making it a standout city in a nation with dwindling housing affordability.
The latest Domain House Price Report shows the house median in the Top End is just $592,976, while units sit at $330,559, making Darwin a lone outlier among the nation’s costly capitals and a beacon of hope for first-home buyers looking for a budget-friendly house in a fast-growing city.
Not to mention Bali’s just a three-hour flight away from the Northern Territory capital.
In an even rarer twist, Darwin’s property prices are cheaper than they were a decade ago, with the city’s housing market defying the upward march of prices seen across the rest of the country.
But while the “boom and bust” town has lingered in a lull for years, industry experts say that’s rapidly set to change.
Fuelled largely by FIFO workers, the city boasts some of the nation’s strongest rental yields and has become a magnet for investors keen to capitalise on a market poised for growth. For interstate buyers priced out of cities like Sydney and Brisbane, it’s also offering a rare chance to own a house minus the crippling financial burden.
Andrew Harding of Ray White Darwin says from an investor perspective, the city is now seen as a safe place to park your property dollars.
“It’s the cheapest capital with the highest rental yields … on ground-level block homes in Palmerston you can get a seven to nine per cent rental yield,” he says. “We’ve always been a boom-and-bust town and we’ve been in a down cycle for a while, but we’re set for the next rise and that’s why investors are moving their money here.”
Harding says there has also been a notable trend of southern buyers visiting the capital during the dry season, falling in love and then deciding to call the city home.
“I think people come and then get surprised by the fact that we have sealed roads and a Bunnings,” he says.
Domain chief of research and economics Dr Nicola Powell says the embattled capital had long earned the dubious title as the nation’s poorest property performer.
“For price growth, it’s the last capital standing,” she says. “Unit prices are actually well below their peak price. They’re $156,000 lower than the 2016 record and for house prices, they’re $86,000 lower than the 2013 peak – which says a lot.
“There are some people who bought pre-2013 who still won’t haven’t recouped that loss. But there are two sides to it, and one side is that it’s great for affordability, first-home buyers and investors.”
Derek Hart of Elders Top End Group says investor enquiry in the Darwin market began picking up about four months ago with strong interest in houses below $510,000 – buoyed by an expectation that rent prices will further rise.
In September, the Domain’Rent Report revealed average weekly house rents in the city rose to a record high of $680 for houses and $550 for units.
“I think rents will increase by between $30 and $60 a week soon,” Hart says. “And with interest rates set to drop we’re expecting a boom.”
Hart adds that a raft of new grants – including $50,000 towards building or buying a first home, and $30,000 for existing home owners – is helping to moving the city’s economic and housing market needle, alongside a major infrastructure injection into the city over the past few years.
“We are definitely seeing more people moving here and that’s because they love the laid-back lifestyle and the fact that it’s 26 degrees all year round,” he says. “We don’t have traffic jams and it’s away from the rat race.
“It’s also a great place to bring up a family, we’ve got great restaurants and we’re the gateway to Asia.”
For young home buyers fed up with eye-watering property prices down south, Hart says Darwin offers a vibrant and fast-growing hub, a safe and supportive community, top restaurants and breathtaking nature just beyond the city limits.
“And we’ve got daily direct flights to Singapore, and you’re just a couple of hours from Bali,” he adds.
Sunshine Coast-based investor Ryan Beck says Darwin emerged as one of the nation’s hottest markets about 12 months ago off the back of a decline in new builds, consistently high rental yields, and a flurry of economic activity earmarked for the next few years.
The passionate property punter quickly bought six houses and a block of units, mainly in the city’s northern suburbs, swelling his investment profile to 20-plus holdings.
“Darwin just represented excellent value,” he says. “You’re often buying property at the same prices you would have in 2010 which makes it significantly below replacement cost.
“But there are also excellent economic drivers. In 2023 the Australian and US defence departments spent over $6 billion there, and in early 2024 the government signed a contract with Tamboran Resources to supply gas needs.
“There are other potential activities that will be absolute game changers for Darwin too. Middle Arm is a big sustainable development precinct that’s planned for Darwin, and it could deliver up to 20,000 jobs and that will be such a needle mover.”
Beck says the needle is, in fact, already moving across the once lacklustre property market, with days on market declining and sentiment swelling.
“The underlying opportunity was always there for Darwin but the final thing was confidence and the new government coming in this year has shifted that sentiment,” he says. “If I was to make a prediction, it would be that in 2025 Darwin could go from being one of the weakest to the strongest performing markets in Australia.”
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