Analysis by CoreLogic RP Data shows Hobart’s last property cycle peaked during November 2003 and in the past decade home values in Hobart have increased at an annual rate of 1.5% with values falling at an annual rate of -0.7% over the past five years.
But in the past 12 months, Hobart has recorded home price growth of 4.8% and CoreLogic research analyst Cameron Kusher believes the tide is beginning to turn in Hobart.
“When you look at the housing and economic indicators for Hobart it looks like the market is well positioned to see an increase in the rate of housing demand and subsequently home values over the coming year. Of course Hobart also has the advantage of being a substantially more affordable housing market than all of the other capital cities,” Kusher said.
“Any of these indicators could change and most importantly if job creation picked up pace and the unemployment rate fell it would provide further positives for the local market. Nevertheless, it looks as if the fundamentals are in place for a long-awaited improvement in value growth for the Hobart housing market,” he said.
According to Kusher’s analysis, one of the strongest positive indicators for Hobart is the cities current number of residential listings.
While new listings are currently 1.3% higher than they were 12 months ago, total listings in the city are 26.2% lower than this time last year and are at their lowest point since October 2010.
Kusher said those movements point to a decrease in supply at the same time demand is increasing, something that is likely to help prices improve.
With a median house price of around $360,000 Hobart is also much more affordable than many mainland cities, meaning buyers are less likely to be put off by the prospect of buying in a rising market.
“While value growth in Hobart is picking up, transaction volumes are relatively steady from where they were at the end of last year and virtually unchanged from a year ago,” Kusher said.
“In comparison, most other capital city housing markets are actually recording fewer property transactions than they were a year ago.”
While many of the recent struggles experienced b in Hobart and the wider Tasmanian property market has been the result of poor economic conditions, there are signs that might be changing too.
“Over the past few quarters, for the first time in a number of years, net interstate migration to Tasmania has been positive. It is still early days but should this trend continue over the coming quarters it could be a positive for the Tasmania housing market,” Kusher said.
“Tourism is likely to be a growing source of employment for those living in Tasmania. According to data from Tourism Research Australia, international visitor numbers to Tasmania increased by 19.6% in 2015 and have increased by 53% over the past five years. Meanwhile, domestic overnight trips to Tasmania increased by 17.3% in 2015 and have increased by 40% over the past five years.”
Kusher isn’t the only one with a positive outlook for the Hobart market, with Domain Group senior economist Andrew Wilson telling Your Investment Property Magazine that the Tasmanian capital “ticks all the boxes” for investors.
“Hobart’s certainly the strongest market in terms of the quarterly rates of growth,” Dr Wilson said.
“Of course the local economy is the key, but at the moment it’s those affordability perceptions that are driving the Hobart market and I think we’re starting to see more investors become involved in Hobart,” he said.
“It certainly ticks all the boxes for investors at the moment including capital growth, which is something that won’t be on the radar for other capital city markets in the foreseeable future.”
