Captial city property markets were in a much stronger position towards the end of 2019 than in previous months as the decline slowed and negative markets went back into the black – except for Hobart. This city began the year as the top capital city market in Australia, but was expected to end it in fifth place.
CoreLogic’s Home Value Index for October 2019 indicates that in the previous three months Hobart fell below Sydney, Melbourne, Canberra and Brisbane in terms of growth, as dwelling values increased by only 1%, although this was in fact Hobart’s highest quarterly price growth in the past year.
“Vacancy rates in Hobart and Adelaide remain low, but unemployment is over 6.0% and not showing signs of improvement. While rents are likely to continue increasing, the weak job markets may dampen price growth in these cities,” explains OpenCorp director Matthew Lewison.
This viewpoint reflects earlier concerns that, despite Hobart’s domination of the market in the past months, its success was not sustainable in the long run. While the city is holding on to positive growth, its quick descent down the ranks is not a great sign.
Regions blossom
Outside the metro, the Launceston region is continuing to blossom. Among the non-capital subregions in Australia, this market reported the highest growth over the October quarter, at 4.7%. Affordability also remains a significant advantage for the Apple Isle, driving demand in the face of low stock.
“Total advertised stock levels are 11% lower relative to last year and tracking at the lowest level since 2010. Such a small pool of available stock against rising buyer demand is creating some competitive pressure amongst buyers, which is adding to urgency in the market and supporting upwards pressure on values,” says CoreLogic head of research Tim Lawless.
“Hobart land prices have rocketed 20.3% higher over the year ending June, reflecting tight supply against a backdrop of strong demand. Despite the significant rise, Hobart is still showing the lowest median land price amongst the capital cities, at $180,000, and the largest median land area at 624sqm.”
Nonetheless, Hobart will need to be careful to balance supply and demand as it’s at risk of losing its trump card.
“Lower land prices should provide further support for housing affordability in these markets; however, in Hobart and Perth, land prices were higher,” Lawless points out.
SUBURB TO WATCH
HUONVILLE:
As Hobart comes down from its remarkable high, areas of Tasmania are following, including the suburb of Huonville in the picturesque Huon Valley.
While dwelling prices continue to increase, it is undoubtedly at a slower pace than before – house values went up by just 2.4% in the year to October 2019, while unit prices rose by only 0.3%. Thus, both types of properties remain very affordable, with median values not even hitting the $400,000 mark.
Huonville is a must-see for those who love food, given its wealth of local produce, including salmon, honey, mushrooms and fruits like apples, apricots, plums, cherries and pears. You’ll also fi nd an excellent selection of wines and cider here.
Agriculture: Huonville is known for its local produce, such as apples, apricots, plum and pears
Affordability: The median values of both houses and units are below $400,000
