Australia’s weakest capital city is set to continue its poor performance in 2015, according to a leading market commentator.
SQM Research managing director Louis Christopher said Darwin is currently the weakest capital city market, with 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. Right now, it’s swinging south, primarily due to the commodities downturn,” he said.
Mr Christopher also put Hobart in the spotlight, but said the outlook for the city was more positive than for Darwin.
“Yes, I understand that it has historically been a weak economy, has experienced weak-to-negative population growth and, subsequently, a weak housing market,” Mr Christopher said.
“Taking all this into account, we think prices are well undervalued by historical standards and are primed 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.