Business · Companies · 4 hrs ago
Interstate investors drive a surge in Alice Springs home sales
Investors from Melbourne and Sydney are buying homes in Alice Springs, an outback town in Australia’s Northern Territory, to earn income from rent.
Agents say some buyers are purchasing homes sight unseen within 24 hours of them going on sale, often for $400,000 to $500,000.
High rents and a 1.4 per cent rental vacancy rate have made the town attractive to investors.
The average weekly rent for a three-bedroom home is $650, up 31 per cent from 10 years ago.
Sales have surged, with one agency selling about 25 homes in a month compared with its previous record of five.
Some tenants can stay when an investor buys their home, but local housing advocates say changing who owns a home does not add to supply.
Agents say limited land and high building costs restrict new construction, and have called for government help to grow the town’s housing stock.
Interstate investors are buying homes in Alice Springs, drawn by high rental returns and a tight rental market.
A local real estate agent said investors were buying homes sight unseen within 24 hours of them going on sale.
One agency sold about 25 homes in the last month, compared with its previous record of five in a month.
An agent estimated investors bought about 40 to 50 homes in the first quarter of the financial year and expected the total to approach 100.
NT Shelter chief executive Annie Taylor said more homes changing hands would not address the underlying housing supply problem.
- Who
- Interstate investors, including buyers from Melbourne and Sydney, are buying homes in Alice Springs.
- What
- Investors are purchasing homes amid strong demand and high rental returns.
- When
- The activity has occurred since the federal government removed negative gearing benefits. One agent reported about 25 sales in the last month.
- Where
- Alice Springs, in the Northern Territory.
- Why
- Investors are seeking high rental returns. A real estate agent cited a 1.4 per cent rental vacancy rate and limited housing stock.
Interstate property investors and their agents
NT Shelter
Housing supply
Interstate property investors and their agents
Agents said investor purchases were meeting demand for rentals and could help tenants stay in their homes.
NT Shelter
Annie Taylor said changing who owns a finite supply of homes does not increase the overall supply.
Effects on tenants
Interstate property investors and their agents
Marion Burton said tenants could continue their leases when investors bought properties to keep renting them.
NT Shelter
Taylor said rents were already too expensive for many families and that more rental listings would not address the underlying issue.
Interstate buyers began seeking Alice Springs homes for their high rental returns.
Marion Burton estimated interstate investors bought about 40 to 50 homes.
Eli Melky said his business sold about 25 homes, compared with its previous monthly record of five.
- Investor price range
- $400,000 to $500,000
- Average weekly rent
- $650 for a three-bedroom home
- Rent increase
- 31 per cent over 10 years
- Rental vacancy rate
- 1.4 per cent
- Melky agency sales
- About 25 homes in the last month; previous record was five per month
- Burton's estimate
- 40 to 50 investor purchases in the first quarter of the financial year; she anticipated closer to 100 overall
What people are saying
The higher rents is what they're looking for, they're not able to capitalise on negative gearing anymore
It's almost like Australia woke up one morning and decided that Alice Springs is the best place to invest in property and all of a sudden our figures are astronomical.
It doesn't seem to have slowed down at all
If you have a finite supply of housing and you simply have that housing change ownership hands, you're not actually doing anything to increase the overall supply