Property investors and homebuyers who want a slice of Hobart must act now before properties under $700,000 become a thing of the past.
Herron Todd White property valuer Mark Davies said buyers with a $700,000 budget could snap up a dwelling or two a year ago.
"In today’s market, you would be struggling,” Mr Davies said.
“There are a multitude of properties currently listed for sale under this price, however many are listed as offers ‘over $XXX’ with those listed close to the $700,000 mark expected to exceed well over the listed price.”
The sub-$700,000 market is projected to perform well as borrowing costs remain relatively affordable.
The median dwelling price in Hobart, according to CoreLogic's Hedonic Home Value Index in July, grew by 1.7% monthly to $621,102. On an annual basis, Hobart clocked a 21.9% gain, the second highest next to the growth recorded in Darwin.
"Getting something under $700,000 is believed to be hard to achieve in the near future," Mr Davies said.
The uptrend in prices is likely to be the case over the next few months as demand continues to outstrip the available supply.
Hobart continues to have a thin supply of homes, with total listings decreasing by 37.2% annually in the 28 days to 8 August, CoreLogic figures show.
Furthermore, the city has the shortest median days-on-market for both houses (21 days) and units (26 days).
"More and more residential allotments are being released at present with expressions of interest being offered months prior to the release of the titles," Mr Davies said.
This heightened demand, which builders also experience, would ultimately impact construction activity.
"The demand for builders is extremely high with long lead times for commencement of construction. Lack of construction materials and labour is also impacting construction times," Mr Davies said.
Where to look for homes in Hobart
There are several suburbs across Hobart that present a good deal for investors and owner occupiers.
Dwellings in Claremont, Austins Ferry, Brighton, New Norfolk, Oakdowns, Midway Point, and Sorell, for instance, have properties under $700,000 with good rental returns of around 4.5% to 6%.
"Regardless of whether you are looking at detached houses or units, Hobart is going gangbusters at this point in time and there is no reason why it won’t keep going with interest rates at record lows," Mr Davies said.
A recent report by NAB indicated that housing affordability in Hobart means there are a lot of suburbs that are actually cheaper to buy into than rent.
Suburbs like Sorell, Howrah, Moonah, and Kingston are all ideal locations for first-home buyers who want to break free from the rent cycle.