Property market conditions are still at a healthy level in Hobart, but the rental market is losing the benefit of affordability
Affordability has always been Hobart’s strongest advantage and has helped propel the market to incredible heights over the past few years. However, this advantage is beginning to waver.
In CoreLogic’s Home Value Index for April 2019, head of research Tim Lawless reported that property prices “remain at record highs” throughout the Apple Isle. Hobart was one of the few areas to avoid a decline in dwelling values, while parts of regional Tasmania were among the best performers of all capital city subregions in the 12 months to March 2019.
This appears to indicate a ripple effect from the capital city to the major regional centres of the state, because as market conditions in Hobart begin to soften, buyers are looking towards the lower quartile of the market for opportunities.
“There are only five significant urban areas in Tasmania, and every one of them has an impressive demand-to-supply ratio. Each one had an increase in demand relative to supply from where they were 12 months ago,” says Jeremy Sheppard, head of research at Select Residential Property.
“The ratio is consistent across houses and units in pretty much every significant urban area in Tasmania – the state is still making a mockery of naysayers. I expect more of the same across 2019.”
Sheppard pinpoints the top urban areas as being Launceston and Ulverstone, located 20 minutes from Devonport.
Decline in affordable rents
The strength of the buyer market across Tasmania was highlighted in the Housing Industry Association’s Population and Residential Building Hotspots 2019 report, which identified as many as 10 hotspots. This was up from four in the previous year, and the list includes Hobart suburbs like Old Beach and Brighton as well as Launceston’s Port Sorell.
However, given the very tight vacancy rates in Hobart, the rental market is seeing rents climb rapidly, causing it to lose the distinction of being the most affordable capital city rental market in Australia.
As of the March 2019 quarter, rental costs in Hobart are significantly higher than those in Brisbane, Adelaide and Perth, according to CoreLogic’s Quarterly Rental Review. In fact, over that quarter alone, Hobart’s rental rates were up by 3.6% – the greatest increase in that period – against an average yield of 5.08%.
SUBURB TO WATCH
KINGSTON BEACH: In the Greater Hobart area, the suburb of Kingston Beach sits right at the mouth of Browns Rivulet on the Derwent River and was originally known as Browns River Beach. It was the subject of many a photograph in the 20th century.
Growth has come thick and fast in this suburb, which has been boasting property price hikes since 2014. In the 12 months to March 2019, house and unit values rose by 7.8% and 10.7% respectively. This strong performance extended to the rental market, where rental rates were up by 7.1% for houses and 11.8% for units as of January 2019. This reflects Hobart’s rising issue with rental affordability.
Rent: Weekly rental rates increased by 7.1% and 11.8% for houses and units respectively
Location: Kingston Beach, located on the Derwent River, boasts stunning views
Top Suburbs :
st kilda west
tweed heads south
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