Despite the state’s positive performance, the clock could strike 12 soon on Hobart as its Cinderella run starts losing steam
Hobart has had a remarkable few years of being consistently on top of the national property market, enjoying incredible levels of growth while remaining quite affordably priced. But is the tiny state finally slowing down?
The CoreLogic Home Value Index for June 2019 reports that while Tasmania still performed well over the past 12 months to June, its momentum is easing up. Adelaide has trumped Hobart as the top dog, and while Tasmania had the number one regional market in the country, this is now anticipated to be heading downhill.
“Tasmania broadly is still in growth, but it’s unsustainable. So it will edge back fairly reasonably in the next 12 months,” says Results Mentoring director Brendan Kelly.
“Hobart is not in a significant growth phase. What we will see is what we have started to see in Sydney, which is that as the cooling market starts to take effect, it will ripple out to Launceston and other major towns around.”
But while things may be slowing down in the Apple Isle, the state has already built a fairly strong local economy, which should keep it going. Strong internet connectivity has been a big part of this as it was a factor that used to give Tasmania bad publicity.
“There are a lot of technologybased businesses that are doing really well, because now that we’ve got the NBN connected to 99% of Tasmania, a lot of these people can do the work they need to do,” says Adrian Kelly, president of the Real Estate Institute of Australia.
“Launceston, Devonport and the regions up on the northwest coast are doing quite well now, particularly from a real estate perspective, and that’ll continue for quite a while.”
While Hobart remains reasonably priced for homebuyers, its rental market has continued to tighten over time, resulting in the capital becoming one of the more expensive cities in the country to rent in.
“For many years, Hobart has been the most affordable rental market; however, the rapid growth in rents over recent years has seen it become more expensive than Brisbane, Adelaide, Perth and Darwin and on par with the cost of renting in Melbourne,” reports CoreLogic research analyst Cameron Kusher.
SUBURB TO WATCH
MOWBRAY: Launceston suburb boasts affordability and growth
Affordability remains the name of the game in the Apple Isle, as seen in the suburb of Mowbray where properties can be purchased in the very low $200,000 price range.
This affordability is coupled with growth, particularly in the housing market. With values up by 6.9% in the year to June 2019, the median price clocked in at $259,537. Rental rates also increased by 3.4% to a weekly average of $300. This is accompanied by a healthy return of 6.2%.
The unit market has struggled, with prices slipping by 0.5% in the same period to a median of $208,454. Nonetheless, it remains a great investment in other respects, including for rental growth and yield.
Affordability: Mowbray’s median prices are low, within the $200k range
Yield: Properties here offer high returns of around 6% for both houses and units
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