House prices in Hobart have risen substantially over the first three months of the year, overtaking the prices in other capital cities, according to the latest market update from Domain.
Over the quarter, house prices in the city went up by 7.6% to $601,567, reaching a new record high. This was the strongest quarterly growth reported since 2017. On an annual basis, prices during the three-month period increased by 15.9%.
The price growth in Hobart appears to be accelerating. In fact, the city was the most affordable capital to purchase a house at the end of 2019. Since then, however, prices in the city have overtaken those in Darwin, Perth and Adelaide.
Houses continued to outpace units in terms of price appreciation, with the latter even reporting a decline of 0.8% to $430,716 over the first quarter of the year. This drop was driven by the inner Hobart region, which was the only area to report a fall on an annual basis.
Still, Hobart outpaced other capital cities in terms of house and unit price growth over a five-year period. Prices have risen by 73% for houses and 67% for units over the past half-decade.
"During this time, there has been a significant lift in population growth, particularly from interstate buyers that see Hobart as affordable in comparison to mainland cities and they also tend to have deeper pockets because of the discrepancy between wages from the mainland and the island state," Domain said.
While construction has already picked up in Hobart, the limited supply continues to be a main driver of rising prices in the city.
"The local lifestyle and successful control of the pandemic, as well as the desire for lower density living will continue to place Hobart in the spotlight," Domain said.
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