The state capital is experiencing high levels of demand from both local and overseas renters and buyers
Hobart continues its reign as Australia’s most affordable capital, displaying strong growth prospects.
“It has emerged as a strong performer in recent CoreLogic reports, recording a 5.8% increase in year on-year dwelling values as of the end of May,” says Charles Tarbey, chairman and owner of Century 21 Australasia.
“The combination of high-quality living and affordability make it an appealing investment location, and we have investors increasingly moving into the market.”
However, Tarbey does caution investors to monitor rental yields and vacancy rates, since the market also faces the risk of soaring vacancy rates compared to other regions in Australia.
At present, however, REA Group chief economist Nerida Conisbee suggests that tenant demand is quite high.
“It’s the most affordable capital in Aussie, and there’s lots of interstate demand. There’s also lots of offshore interest from Chinese investors. However, be careful because it’s small and does not seem to experience new development.”
Conisbee believes that one way to support price growth in this area would be to create projects that provide employment opportunities.
Investors Choice Mortgages director Jane Slack-Smith says local industry closures could negatively impact the state’s economy. Nonetheless, there is still much underlying growth in the area.
“Hobart is a lifestyle choice; property prices are very affordable and their biggest export is their youth. For some investors, the 5% per annum rental returns are hard to resist, especially at a median house value of $415,000,” she says.
“A savvy super planner may even find this capital city a great investment for their super fund and a long-term tree change for themselves. As with any city market, there are always pockets of potential – you just need to search them out.”
Reno work brings new life
With the growing need for housing, many homeowners are renovating and selling outdated dwellings. While some ‘flip’ properties, others simply put them on the market as is but highlight the renovation potential for prospective buyers.
“We are seeing a split between owner-occupiers and investors. Investors do seem to be on the increase and there is a strong possibility [they] will dominate the market, especially with the increase in property prices throughout mainland Australia, which could drive investors to Tasmania,” reports Herron Todd White in its Month in Review for June 2017.
“We are also seeing that rising prices and strong demand for property has home owners worried about being priced out of the market, therefore they are opting to renovate.”
SUBURB TO WATCH
HUONVILLE: Houses are king in picturesque suburb
Situated right on the banks of the Huon River, the small suburb of Huonville has a thriving house market.
It is regarded as one of the top fruit producers in the state, and foodies are drawn to its food-centred attractions and culture, since Huonville has a long history of apple growing. The suburb is also known for fishing, boating, walks on the beach, as well as for being the last town travellers can stop in at before hitting the south of Tasmania.
The average yield is high, at 5%, while the median house price just passes the $300,000 mark. The rising tourism and forestry industries also provide employment opportunities.
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