The sky’s the limit for Hobart, but its long-term potential remains to be seen given the lack of a spillover effect
Hobart remains one of the best-performing capital cities in the country, with the CoreLogic Home Value Index for March 2018 highlighting Hobart as the only capital to show month-on-month growth over February 2018.
“The property boom that commenced in Hobart in mid-2016 has no end in sight,” comments Simon Pressley, managing director of Propertyology.
“Sustained improvement in the state’s economy has done more than create jobs and boost confidence for locals, but its beautiful lifestyle is attracting an increasing number of interstate migrants to settle there.”
Propertyology notes that Hobart reported all-time low days on market and vacancy rates, suggesting the remarkable strength of demand in this area. Rent rates are soaring, and investors are making good profit from the positive cash flow. The firm predicts that Hobart may be able to expect growth levels of 20% in 2018, especially with Hobart being only the fourth city in Australia chosen to benefit from the City Deal initiative. This initiative provides significant funding for targeted infrastructure investment from the federal, state and local governments as a way to speed up economic progress.
Part of Hobart’s charm is its place as a hub of technological development. LG Electronics indicates that over 70% of Hobart’s energy comes from renewable sources, so the city has been acting as an eco-trailblazer for the other capitals.
“The economy [in Hobart] has changed from a primarily government/agriculture economy to a more mixed economy, so that’s very positive for housing demand,” says Nerida Conisbee, chief economist of REA Group.
Regional marjet slow
Though the more built up areas are thriving, regional Tasmania isn’t feeling much of the boom. Recent growth has mainly been concentrated only in Hobart, with the rest of Tasmania not really showing comparable growth. “We’re not seeing demand flow through anywhere else in Tasmania at this stage – Launceston might be getting a little bit of a pickup, but the centre of action continues to be Hobart,” Conisbee concludes. Furthermore, there’s “a big rental crisis in Hobart at the moment, and they need more development. They also need more investors in that market to provide more rental housing,” Conisbee adds.
SUBURB TO WATCH
BELLERIVE:
The suburb of Bellerive is in the midst of an upswing, with both houses and units putting in a great performance since 2013.
Steady increases in house prices have pushed the median price to nearly $500,000; however, apartments still remain affordable at under $350,000. Coupled with a high yield of 5%, units in Bellerive look to be a good deal for investors seeking both growth potential and cash flow.
This performance is encouraging given that Bellerive is located outside of Hobart, the boom centre in Tasmania. The suburb is surrounded by Rosny Park, Bellerive Esplanade, Bellerive Beach and the foothills of Waverly Flora Park. With its many historical properties, Bellerive also exudes a quaint village feel.
