Hobart property market set to stabilise

BMT team — Thu, 05 Sep 2019 00:17:26 +0000

While national property prices were plummeting at their steepest decline since the global financial crisis earlier this year, Australia’s island state was defying the odds. Tasmania has experienced significant capital growth in recent years, with Prime Minister Scott Morrison dubbing it the ‘turnaround state’. Hobart in particular has gone from strength to strength, only recently starting to cool off after years of exponential growth. Low supply of dwellings, low median price, tight vacancy rate and an upswing in tourism have all contributed to the city’s property boom. In this article we will look at: Hobart property values Hobart property listings Hobart vacancy and rental rates Hobart property market trends Hobart property values Hobart dwelling values continued to rise over the last month, with the latest CoreLogic data showing a 0.5 per cent increase in values during August, the third successive month of capital gain for the city. Hobart also topped CoreLogic’s list of top ten performers, recording a 3.1 per cent annual increase. Canberra placed second with 1.2 per cent. Over the past five years Hobart’s dwelling values have skyrocketed by 35.9 per cent, more than 10 per cent higher than Melbourne and 15 per cent higher than Sydney. According to the Australian Bureau of Statistics (ABS), Hobart property prices have been rising at an average rate of 4.6 per cent a year — the fastest of all Australian capitals. Despite solid growth, the median price of property ($465,535) remains relatively affordable in comparison to other capital cities like Sydney ($790,072) and Melbourne ($626,703). While the city has experienced enormous growth, the latest CoreLogic figures indicate prices are beginning to stabilise and it’s likely the property market will lose its momentum over the next twelve months. Hobart property listings Hobart had 298 new listings in August, a 12.4 per cent decline in comparison to the same period last year. However, overall there were 1,060 properties listed for sale, a 6.9 per cent increase over the past twelve months. The median time on the market for houses was 39 days, while units recorded a median of 42 days. Hobart vacancy and rental rates Hobart has the hottest renal market in the country and has experienced a 5.5 per cent increase in rental conditions over the past twelve months. The asking rental price for Hobart is $443.50, 9 per cent higher than the same time last year and 29.8 per cent higher than three years ago. Along with this, the city’s residential vacancy rate is currently just 0.5 per cent. Hobart property market trends The number of tourists visiting Tasmania has continued to grow, with 1.32 million visitors travelling to the state over the twelve months to March 2019, according to Tourism Tasmania. With steady visitation growth, Hobart is seeing a trend of investors converting private rental properties into short-stay accommodation. A recent University of Tasmania report recorded a 288 per cent increase in entire properties being listed on short-stay accommodation websites in the city from July 2016 to 2018. Given the city’s tight vacancy rate and rental conditions, reducing existing rental stock could further acerbate Hobart’s household rental stress. In July, the Master Builders Association said regulatory and cultural change to embrace higher-density housing was vital to Tasmania’s future.

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Hobart to become Australia’s best performing city

Simon Pressley — Wed, 25 May 2016 05:40:09 +0000

If we draw a line in the sand right now and cast our minds forward three years, of Australia’s eight capital city property markets my money is on Hobart being Australia’s best performer. While other so-called experts were berating Tasmania’s basket-case economy, Propertyology gave Hobart our official green-light back in April 2014. The first property which we purchased was for my own portfolio and, over the following two years, we’ve purchased fifty odd properties for our clients. Hobart and Tasmania in general had its share of economic challenges over recent years. The forestry industry completely closed in 2010, the were some mining-related job losses in the state’s north west, and a large percentage of students were dropping out of school after year ten. For several years much was written about Tasmania’s high unemployment rate and below average population growth rate. Property investors, myself included, for quite a while simply put Hobart in the ‘don’t bother’ basket. 58 per cent of the state’s population actually live outside of the state’s capital city so it’s often not appropriate to paint Hobart with the broader Tasmanian brush. Hobart’s unemployment rates are often much better than the state average. Two years on from April 2014 when Propertyology started investing in Hobart, Australia’s average unemployment rate had improved by 0.2 per cent (5.9 per cent to 5.7 per cent) while Hobart’s had improved by 0.9 per cent (7.0 per cent to 6.1 per cent). The reason Propertyology chose to focus our research energy on Hobart in the first place was because we believed that it had a mix of economic drivers with significant potential for prosperity at this juncture in the Asian Century. The OECD has forecast that an estimated 2.5 billion extra Asian people will transition from poverty to the middle class between 2013 and 2030. That places enormous demand on many of the goods and services which Australians have always taken for granted. Education, food manufacturing and tourism are of premium quality in Hobart. International tourism numbers have reached record levels for three consecutive years now, growing by 20 per cent to the year ending March 2016 compared to 8 per cent national growth. Plantation forestry has re-emerged and is creating new jobs in manufacturing and transport. Growth in retail trade figures has occurred for sixteen consecutive months. The ABS released a statement earlier this year saying that Tasmania’s economy is now growing at its fastest pace since 2010 and only NSW and Victoria were growing at a stronger rate. The improvement in Tasmania’s economy coincided with the end of a sixteen year reign of the former state government in March 2014. During 2014 and 2015, 9,000 extra jobs were created and interstate migration numbers have rebounded incredibly well. The correlation illustrated in this graph is fascinating. Of course, this directly increases demand for housing. And, unlike a majority of mainland capital cities, Hobart’s housing supply pipeline has been kept under control. In our opinion, Hobart is currently the most improved property market in Australia by a long shot. Propertyology forecasts that Hobart will be Australia’s best performed market over the next few years. The good times are only just beginning for Tassie. There’s a $600 million major upgrade of the Royal Hobart hospital currently under construction, development approval has recently been granted for seven (7) new hotels, and the state government has put the iconic Macquarie Point site out to tender for a Darling Harbour style precinct. Vacancy rates in Hobart are currently the lowest of all capital cities and all of clients are enjoying rental yields of 5 per cent to 5.5 per cent. Importantly, rates of new supply have been well controlled and the building approval pipeline indicates that this will continue for the foreseeable future.

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Hobart property market set to stabilise

Hobart to become Australia’s best performing city