Regarded as the most affordable capital city in Australia, Hobart has until recently been a buyer’s dream, but its rebounding housing market is making vendors increasingly happy as well.
“If you’re a house owner, it may be the right time to think about selling,” says Andrew Wilson, chief economist at Domain Group.
“Local economic performance remains the key to sustained growth in prices.”
Despite this growth, Hobart has retained its affordability. Wilson points out that confidence is increasing among both buyers and sellers as unit prices have dropped considerably, while house prices have increased in the September 2016 quarter.
“The mixed market shows potential for both buyers and sellers, with easing apartment prices opening the doors to fresh home buyers looking to snag their first property at an affordable price,” he explains.
Low supply may help account for the boost in the house market. According to Cameron Kusher, head of research at CoreLogic, the number of houses under construction in Tasmania over the September 2016 quarter was the lowest it has been since March 2014. Moreover, the total number of listings in Hobart decreased by a whopping 31.7% in October 2016.
Government and commercial investments
To cater to an increasing pool of residents, there has been a raft of new commercial developments in Tasmania. Kusher notes that the University of Tasmania is aiming to expand and relocate its Cradle Cost campus to a site at West Park. Meanwhile, there are plans to erect a new hotel in Hobart.
Brian Wightman, executive director of the Tasmanian branch of the Property Council of Australia, attributes the upswing in both the residential and commercial property markets to a rising economy.
“Tasmania is experiencing improving economic conditions, beginning in Hobart, and now more evident statewide,” he says.
He adds that there are government initiatives to strengthen planning legislation and streamline the approval of job-creating investments, which should contribute to confidence in the private sector and inspire buyers to take advantage of dwelling affordability.
“We need to add to the attraction of Tasmania as a place to move; to raise a family, find a job and build an affordable home. Housing options must be flexible to meet the needs of people at different stages of their lives,” Wightman states.
“We must cater for societal change and take advantage of house prices in our state which still provide people with an opportunity to enter the property market. Previous generations have worked hard and invested astutely, securing their economic future with property. We should be attempting to foster the same aspiration in all Tasmanians.”
Owners capitalise on interest
Low levels of stock are presently available within the Greater Hobart region, which is boosting buyer demand and thereby speeding up selling periods.
However, according to Herron Todd White’s Month in Review report for November 2016, there have been many blocks of land put up for sale over the past year as part of new subdivision developments, and these blocks generally sell over a six- to 12-month period.
With the popularity of apartments among buyers, there are many townhouse and villa unit developments under construction.
Meanwhile, the majority of renovations are taking place in Moonah, Lenah Valley, New Town, West Hobart, Bellerive, Lindisfarne and Geilston Bay, and buy-in prices in these areas range from $250,000 to $500,000. Typical developments involve the construction of a home behind an existing property.
“Interest from interstate buyers has increased, with many properties with development potential subject to council approval being sold within the first few weeks,” Herron Todd White adds.
SUBURB TO WATCH
Geilston Bay: Nature suburb shoots up in popularity
The tree-lined suburb of Geilston Bay on the eastern shore of the Derwent River has been attracting buyers due to its affordability. It recorded a staggering 9.2% increase in its median unit price, which is a reflection of the suburb’s recent urbanisation and its expected expansion toward Risdon Vale. Investors will also benefit from the high average rental returns of over 5% for both houses and units.
One reason for the suburb’s popularity is the availability of schools for children. Geilston Bay is also the site of the Clarence Lifestyle retirement village. The Natone Hill Bush reserve has walking trails, while Pitchers Hill is lined with biking paths.
There is also a skate park as well as several sporting ovals.
