Australia’s weakest capital city is set to continue its poor performance in 2015, according to a leading market commentator.
SQM Research’s Louis Christopher said according to the research house’s figures, Darwin is currently the weakest capital city market – citing climbing vacancy rates as a particular problem.
“Darwin is a classic example of what I call a ‘shallow’ housing market. By that I mean there is not a lot of market volume and depth and therefore prices can rapidly swing one way or the other,” he said.
“Right now it’s swinging south, primarily due to the commodities downturn.”
Mr Christopher said the downturn was continuing and there were “no signs of it stopping anytime soon”.
Mr Christopher also put Hobart in the spotlight, but said the outlook for Australia’s most southern capital was a little more positive.
“Yes, I understand that it has historically been a weak economy, has experienced weak-to-negative population growth and subsequently, a weak housing market,” he explained. “Taking all this into account, we think prices are well undervalued by historical standards and are prime to move upwards from here.
“I think the lower Australian dollar helps the Tasmanian economy on many levels. Right now, the market indicators suggest there is movement.”
Mr Christopher said the rental market in Hobart was becoming increasingly tight for renters and the city was transforming into a landlord’s market.