Hobart continues to be the most profitable capital city in terms of dwelling sales, according to CoreLogic.
CoreLogic's latest Pain and Gain Report, which captures the market activity during the September 2020 quarter, showed that 96.6% of dwelling sales in Hobart turned profitable. The city has had retained the highest rate of profitability of all capital cities since March 2018.
Units in Hobart reported a 97.1% share of profit-making sales, higher than the 96.5% for houses. However, in terms of capital growth, houses still performed better.
While Sorell and Derwent Valley council regions saw 100% of properties sell for profit in the quarter, the Hobart council region has seen the best results for sellers. In fact, Hobart returned a median profit of $285,000, higher than Sorell's $204,000 and Derwent Valley's $141,250.
Overall, values in Hobart ended the year with a 6.1% annual growth to $513,000.
Tight rental market
Separate reports from Domain and SQM Research showed that Hobart has the tightest rental conditions amongst capital cities.
In fact, Hobart maintained its 0.6% vacancy rate in December. Over the quarter, house rents increased by 2.2% to $460 while unit rents remained stable at $400.
The growth in house rents was a little reprieve from the steep double-digit annual increases leading up to the $470 record-high achieved in March last year. Unit rents, on the other hand, are $20 lower than the record high achieved in the same month.
However, Hobart is the only capital city to record lower house rents compared to pre-pandemic March and is the third hardest hit unit rental market, behind Sydney and Melbourne, according to Domain.
Still, despite the slowdown in price hikes, the market remains competitive for tenants. Over the past five years, house and unit rents have reported steep respective gains of 35% and 43%.
Domain predicts that vacancies are likely to remain low in Hobart, giving landlords strong grounds to raise rents.
