Hobart’s run at the top gets shaky as it fails to record growth in the most recent reporting quarter
Corelogic's Home Value Index for May 2019 indicated that Hobart’s dwelling values fell for two months straight during that period, causing it to record its first negative quarterly growth rate since 2016.
Hobart has performed spectacularly for a few years, but over the three months to May it hit a snag and went into the red, while the decline slowed in cities like Sydney and Melbourne.
“In cities where housing market conditions have generally been more resilient to a downturn, the trend is the opposite,” says CoreLogic head of research Tim Lawless.
This seems to tie into predictions by some – such as Real Estate Institute of Australia president Adrian Kelly – that Hobart’s growth will slow in 2019.
“We don’t get the peaks and troughs that Melbourne and Sydney get – we tend to be more flatlined. I don’t think we’ll see too much more proper price growth this year, but the demand will still be quite high,” Kelly explains.
“There are a lot of former Tasmanians who are now moving back to the state because our employment is going well.”
Wine and food have helped jumpstart the tourism industry, and the influx of young, technology-based business has breathed much life into the city centre. Agriculture is also thriving in Tasmania, and is the main driver of the local economy.
“We’ve had a whole range of brand-new irrigation schemes put in around Tasmania. Being able to access all this extra water means farmers can really diversify,” Kelly says.
In addition to improvements made to the irrigation system, the government has also put funds towards the development of other amenities.
“Our state government does not have a lot of spare cash to spend on major infrastructure projects, but what we’re spending on is the Royal Hobart Hospital and upgrading our highways, particularly the maintenance highways,” Kelly reports.
More hotels are being constructed to meet the need for accommodation created by the boom in tourism; however, the supply is still inadequate, causing rents to skyrocket. In fact, CoreLogic data suggest that Hobart’s rents were up by 4.9% over the year to May 2019, showing the fastest growth of all capital city rents. As a result, countrywide rental affordability is down.
SUBURB TO WATCH
WYNYARD: Demand for houses is up
Near the Inglis River, Wynyard is a popular beach spot for many visitors. People enjoy swimming, kayaking, ocean and river fi shing here, as well as leisurely walks with incredible views. They can also relax at one of the many cafes in the area.
This could be why houses are in such demand in this area. Prices have been increasing at a rapid pace since May 2014 – in the 12 months to May 2019 alone, values rose by 15.9% to a median of $288,369. Nonetheless, properties remain quite affordable at under $300,000.
Affordability: The median price of both houses and units is under $300,000
Tourism: Wynyard’s waterside location and beach make it a popular vacation spot
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