Lifestyle and affordability are the main drivers of demand in Hobart, though the state’s appeal extends beyond the capital
The opening of MONA (the Museum of Old and New Art) back in 2011 was a blessing for the Hobart market as it has been a significant factor in the capital’s turnaround through a revival of the local tourism scene.
“Over the last three years, there’s been a large upswing in the city’s tourism dollars, particularly Chinese tourists,” remarks Paul Glossop, director of Pure Property Investment.
“There’s a lot of opportunity in the tourism sector down there, and it’s becoming more apparent.”
After their maiden visit, many have decided to make their stays long-term, as buyers are attracted to Hobart’s lifestyle and affordable homes. Possibly as a result of this migration, the service and forestry sectors have been picking up, improving the local job market. As Hobart is a small city, this means we could see vacancies tighten quickly.
“They see a city like Hobart offering a simpler life, and they often decide to sell their Sydney, Melbourne and Brisbane homes and reinvest here for a third of the price,” explains Jim Playsted, agent at Knight Frank Tasmania.
Both sales and rentals have benefited from this boost, as demand in Hobart has reached heights not seen in over a decade.
“The strongest demand is for central Hobart suburbs from Sandy Bay to New Town, within around a 40-minute walk of the Hobart CBD,” says Rob Zubin, managing director of My Property Hunter.
“However, the demand for property is now extending much wider, with investors seeking better rental returns. With Hobart vacancy rates currently hovering at around 1%, this is also forcing rents up as the demand is so high and good stock limited in supply.”
Regional spillover
The Hobart property market is expected to perform strongly over the next 18–24 months, so investor influx should be heavy during this period. Thus there is hope for spillover into the outer suburbs as vacancies continue to tighten.
“Increased levels of activity appear to be finally spreading statewide, with all regions participating in the improved market conditions,” says Tony Collidge, president of REIT.
Collidge points to Launceston as a breakout star in terms of sales volume – the region outsold even Hobart during the March 2017 quarter. However, high sales levels are also draining the amount of stock on the market.
“The rapid improvement in our economic conditions has brought many benefits to this state, but it has also created unforeseen situations that are proving difficult to resolve; in particular, the market’s inability to meet buyer and renter demand,” he explains.
SUBURB TO WATCH
ROSETTA: Spillover comes from thriving capital
One of Hobart’s northern suburbs, Rosetta has been attracting significant interest from buyers due to its proximity to a thriving city, as well as its affordability and very high returns.
The house market in particular has enjoyed a near-17% price increase. Even then, the median value is still under $380,000. Coupled with high average returns of 5.3%, this means Rosetta houses could be an investor’s dream, especially with Hobart soaring in the national property market. The drawcard for residents is Rosetta’s proximity to Hobart, just a 15-minute drive (or 40-minute bus ride) away. Brooker Highway also borders the east side of the suburb.
