Darwin's full blown slump is getting worse: Louis Christopher

Darwin's property market hasn't quite found the bottom of the cycle yet, according to SQM Research's Louis Christopher.

In a recent newsletter, he wrote that the market, which is in a "full blown slump" is seeing negativity which has been "getting worse".

Over the summer period, Christopher noted that vacancy rates continued to rise, with rents trending downwards (see below). In November, he described the city's increasing vacancies as "alarming".

In the past, Christopher has described Darwin as a "shallow" housing market, with relatively small market volumes allowing for increased price fluctuation.

"Right now its swinging south, primarily due to the commodities downturn", wrote Christopher in January, with no indication that the market's descent would stop soon. Mineral mining is a major economic driver for Northern Territory capital.

Stock on the market in Darwin has been trending upwards since late 2012.

In January, SQM Research recorded a 34.2% increase in Darwin listings from the previous year.

Source: SQM Research

The research firm has also recorded a decrease in asking prices over the past 12 months. Houses saw a 0.5% drop in asking prices, while the downturn was more pronounced in the unit market: unit asking prices were down 5.9% over the year.

A Brinkin apartment has failed to attract the attention of renters, despite numerous discounts. The air-conditioned, tiled unit pictured below was advertised to rent at $520 per week in April last year.

In November, the asking rent was lowered to $480 per week. Earlier this year, the landlords were asking for $460 per week - a 11.5% drop in less than a year.

If the landlords, who paid $143,000 for the unit in 2005, manage to secure a tenant at the current asking rent, it will have a rental yield of 16.5%.

Similarly, the owners of 36 Hotham Court in Leanyer have decreased the asking rent for the three bedroom, two bathroom house. In the last month, the asking rent has dropped from $600 per week to $550 per week. The investor owners purchased the home for $532,000 in 2008.