Hobart continues to blaze a trail as it starts off the first quarter of the year with a bang
The year 2017 closed with bustling activity in the Apple Isle, a trend that’s expected to continue.
According to Rob Zubin, principal at My Property Hunter, low supply in Hobart has facilitated high demand and strong buyer competition for most properties.
“If you’re looking for a builder for a residential property, you’d be on a very long waiting list as many tradespeople have been contracted to the larger commercial developments currently under construction,” Zubin says.
With the inflow of mainlanders looking to move to Tasmania for the idyllic lifestyle and affordable properties, prices are shooting up and competition is stiff. Dwellings on the market are being sold in a matter of days, especially with the very high yields investors can gain (around 5%), and the vacancy rate as of January 2018 was lowest in 15 years. In the inner city, growth levels are in the double digits.
The Hobart property market has also flourished due to the city’s strong economy, which is driven by infrastructure projects and the tourism and education sectors, among others.
Some of the commercial development projects include a hospital and new hotels to cater to the rising wave of visitors, as well as facilities to house Hobart’s burgeoning food and wine industry, which has been contributing greatly to tourist interest.
Capitalise in the short term
While demand could slip after the completion of these projects and the possible loss of job opportunities, it is unlikely to decrease through 2018, with strong growth projected at least into 2019.
Hobart is also popular with tenants, and inner-city suburbs in particular are anticipated to be the top target of investors, with suburbs further out likely to experience a flow-on effect.
“Launceston has picked up, and it’s doing much better than it was a couple of years ago. The other regional areas of Tasmania don’t come close to these two population growth centres. However, [Launceston] just doesn’t look to have the same depth of activity or diversity as Hobart,” Zubin says.
SUBURB TO WATCH
MOWBRAY: Trends are steady in Launceston
The suburb of Mowbray reflects the Launceston market as a whole – while growth is happening, it is not particularly significant.
Houses and units recorded 5.1% and 4.6% price increases, respectively, in the year to December 2017. Nonetheless, the median values are still quite low, at under $230,000. Properties in Mowbray could thus be a smart buy, with supply running low in Hobart, and Launceston expected to absorb some spillover demand. Rental yields are also high, at over 6%, paving the way for landlords to generate strong cash flow.
Mowbray is located near the Tamar River and just 3km from the city of Launceston, making it a very convenient suburb near to many amenities.
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