High rental returns, low vacancies and constrained building pipeline bolster investor interest
Darwin is expected to remain among the country’s strongest capital city housing markets in 2026, with affordability, constrained supply and population growth continuing to drive conditions across both sales and rentals.
The Northern Territory capital recorded annual dwelling price growth of 18.9% in 2025, outpacing every other capital city, with Perth the next strongest performer at 15.9%.
According to David Oliver (pictured top), general manager at Raine & Horne Darwin, the city’s relative value is still attracting interest from both home buyers and investors. “It really helps that our median house price of $586,912, which is around half of Sydney’s $1,280,613 median,” he said.
“Our affordable price point is attracting strong local and interstate investor interest, particularly given our gross rental yields of around 6.2%, which are roughly double those seen in some southern capital cities.”
Oliver said pricing was also influencing population flows, with fewer residents relocating interstate in search of cheaper markets. “It’s now cheaper to buy in Darwin than in many regional towns across New South Wales, Queensland, Victoria, South Australia and Tasmania,” he noted.
Momentum carried from late 2025
Market activity from late 2025 has continued into the early weeks of 2026, with buyer enquiry and tenant demand remaining elevated.
“Growth accelerated in the second half of 2025 compared to the first half of the year, particularly for houses, with some pockets, recording price growth of 30% or more in the final four months of the year,” said Oliver.
With more than 20 years in the local market, Oliver described the current phase as an extended upswing underpinned by fundamentals rather than a short-lived surge.
“This is a market driven by genuine affordability, strong rental returns and real purchase value,” he said. “Buyer demand and rental demand are extremely high, while supply remains critically low.”
Supply lag and population growth intensify pressure
Oliver said residential supply in Darwin remains well behind demand, with limited land releases, higher building costs and a lack of new projects over the past decade restricting the pipeline of stock. Population growth through 2025 has added further pressure, with the Northern Territory’s population rising by 1.4% in 2024–25.
“The established housing market is effectively exhausted with quality, well-priced listings snapped up rapidly,” Oliver said. “Owner-occupiers are competing with investors, while local buyers are duelling it out with interstate buyers.”
Investor share approaches pre-pandemic levels
Investor participation in Darwin has rebounded to around pre-COVID levels. Raine & Horne Darwin reports that about 60% of its 2025 sales were to investors, many represented by buyer’s agents.
“Out-of-area buyers began re-entering the market in 2023, and local investors followed,” Oliver said. “First-home buyers also remain active, particularly in limited land release stages, most of which have sold out or are close to it.”
Financing readiness key in a fast-moving market
Against this backdrop, Oliver said preparation has become critical for both owner-occupiers and investors.
“Buyers and aspiring investors need their finance in place and the confidence to act decisively,” he stressed. “Hesitation can be costly. A buyer who missed out on a $530,000 property in mid-2025 may now be facing a price closer to $680,000 for a similar home.”
Outlook for 2026
According to Oliver, there was little evidence to suggest a material easing in conditions this year, given the combination of strong demand, tight rental markets and constrained construction.
“Darwin still compares favourably with every other capital city and most major regional centres,” he said. “Rental conditions remain exceptionally tight, yields are strong, and new housing supply continues to lag well behind demand.
“With owner-occupiers and investors competing for the same quality stock, most well-priced properties are selling. In this market, decisiveness matters, as hesitation can carry a six-figure cost.”
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