Hobart's housing market outperformed its peers over the past five years in terms of price growth, according to the latest report from Domain.
Both house and unit prices grew significantly over the past five years, up by 57.3% and 70%, respectively. This is the strongest capital growth of all the major capitals over the five-year period.
"Hobart house prices pushed to new heights over the June quarter. Hobart was one of three cities to see houses rise in the three months to June. For the first time on record, it is now more expensive to purchase a house in Hobart than it is in Perth and Darwin," said Nicola Powell, senior research analyst at Domain.
However, Hobart's momentum has slowed due to the impacts of COVID-19 on the local economy. The Tasmanian capital is exposed to tourism, which is the hardest-hit industry amid the outbreak.
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Over the June quarter, house prices in Hobart increased by 1.4% to $529,388. Units, on the other hand, declined by 1.5% to $429,464. Still, unit prices in Hobart were 17.3% higher in June than during the same quarter last year.
While risks to the Hobart market remain, Powell said government stimulus would help alleviate some of the downward pressure in prices.
"While there is no increase in urgent or distressed selling currently, risks are ahead, particularly given the extraordinary value growth and low average wage," she said.
Furthermore, Powell said Hobart has the potential to be a top location for relocators.
"Demand could be further fuelled by Australia's success in dealing with the global pandemic compared to other countries, making it an attractive destination to reside," she said. "Together with Hobart's lifestyle and relative affordability compared to other major cities, this could be a draw card for those keen to relocate.”
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