Adelaide vs. Hobart: Where would you invest?

I'm just monitoring the market at the moment and depending on the result of latest valuation on my PPOR, I might be able to purchase one more IP pretty soon. I am sort of undecided whether to dig deep into Hobart or Adelaide. Mainly after positive-geared IPs with not-too-bad growth. Just want to get some consensus among PCers.

I'd love to hear some economic/population aspects between the cities as well.

 

Hobart is going through a bit of a boom at the moment, so if you're into short term growth (ala See Change style investing, get in and get out and find the next place) then that might be the best option for you. It'll always be the smallest capital city though.

Adelaide is on a slow but steady price rise, and has better long term prospects in my opinion. Employment situation is improving nicely, rental market is quite healthy, govt actively trying to improve things.

 

Thanks for replying, Dave.

I was under the impression 6 months ago that Adelaide always has a better long-term prospect, compared to Hobart. But all of a sudden, Hobart came from nowhere and is now booming as far as I've read so far. Is it a really boom or mining-town style boom that won't last as long as a typical boom should?

 

Some of the real estate commentators are saying the Hobart growth is being driven by investor sentiment and therefore could be short lived due to having a lack of real intrinsic drivers such as sustained population growth and economic growth. Maybe climate refugees and retirerers are driving Hobart.
On the other hand, other commentators claim that Hobart is experiencing more population growth than Adelaide at present and there is a more diverse economic vibrancy as well.
Then another group of commentators are saying you can still get better options in outer suburbs of Melbourne, Brisbane and regional towns like Newcastle and Ballarat.
Many views in the media can sometimes be linked to the vested interest they may have in the area therefore the favourable comments.
In the end one must weigh up all the available data and not get confused with all the media hype, something that I have been found guilty of in recent times which is why I'm on thus forum.
With Adelaide, I've noted that the federal government is spending money there at the moment. There is a new world class tennis centre being signed off. The city does get a bad rap in the media from time to time and I think this must stop and replaced with more positive stories.

 

We bought in Hobart in early 2000's and the boom after that was just as strong as anywhere . Paid 220 for a house split in to four units , now worth mid 700's and is moving now .

We exchanged on one in Hobart last week .

When we first looked for properties ( around 2-3 weeks ago ) we found about 20 of interest , most of which where under contract by the time we talked to the agent 1-2 days later .

By the time my wife got down to Hobart only two were available . One had been on the market for a while , but the owner had it overpriced . He moved down as the market up and we moved in ....

We paid just over 270 and latest rental valuations have it up at 350 .

I'm buying in the expectation that it will keep booming , but nothing's guaranteed !!!!!!

It's in our super , so as a cash flow property it works well .

We bought in Adelaide last year and I expect it will do well . DT and Dave m are the guys to talk to if you want advice re Adelaide .

If it goes up significantly in the next 2-3 years and at that stage we can see good places to buy in the expeciation of more growth we'll sell and buy elsewhere , but would equally be happy to hold long term .

I would avoid houso areas in tassie aa the bogans there are in a class of their own . Gagebrook , Chigwell spring to mind in Hobart . Someone in tassie " won " bogan hunters ...

Right now we went for Hobart as opposed to Adelaide or Brisbane .

Cliff

 

No idea, but @Xenia has been long term successful investor from SA and has a good handle on this market.

There is a thread on Tassie and believe it has been booming, I think its called "Lets Hype Tasmania" may be worth reviewing this thread.

I believe what is driving this market is tourism and the economy is in pretty good shape, at least it has two triggers for growth.

What you need to find out is how long it has been booming, where and the product?

MTR

 

MTR[/QUOTE]

Hi, I am new to this forum but I am from Hobart, invested there last year but live in Sydney.

Hobart has only grown slightly on a population level since I moved away 15 years ago. It went through a boom a bit after Sydney did, around 2004-2006 from memory, then it flattened or even went backwards for a couple of years. Last year I purchased a house and 2 villas, partly for emotional ties, but also thought it was great value for money and great yields. The boom started just after I purchased, around April/May 2016 and has been going crazy since. However VERY low stock on market, locals are getting desperate so paying too much, and it keeps getting written up in every investment mag so all the "mainland" investors are gobbling everything up! It is mainly investors doing all the purchasing.

I don't expect the boom will go for too long, but it is well overdue for growth after being a flat market for about 7 years or so.

I am very keen to hear thoughts on Adelaide, that is probably where I plan to buy next.

 

You can achieve this easily with a lot of Adelaide areas,the southern areas are development friendly,if you know where to look.

 

I'm with you @Pat I bought Hobart last year and now I'd like to get ahead of the boom in adelaide...Just need my trusty dartboard to find a place...

 

Transparency alert - Last year I bought a place in Hobart

I consider myself State agnostic. I was born in Qld, raised in W.A and live in NSW and I must admit I have never come across a compelling reason to invest in Adelaide. It has the equal lowest population growth with Tasmania but higher unemployment in the country and I just cant see anything that would trigger any kind of gains. It has been moribund for a decade..at least (?).

Tasmania may certainly be having just a small boom but has the best improved labour market in the country (8.1% in 2013 to 5.8 % now) with the lowest vacancy rate with CF+ yields and has an economy that can only benefit further if the AUD goes lower.

 

That's called "Information overloaded". Doing lots and lots of DD is putting me towards analysis paralysis as well, leaving me unsure of what is true and what is just a hype.

But it's good to know that fed gov is spending money there.

 

Thanks, Cliff! I did remember following your "Let's hype Tassie" thread. Back then, I always wondered why you are buying in Launceston. I've been to Launceston several times as a visitor and the town is just simply too small(in my touristy eyes). I wasn't looking with investor's point of view at all. Several months later, bang! Tassie is booming now. You are indeed the Timing Lord!

For my next purchase, I should closely follow what you are buying.

 

Thanks, mate! It's great to know that. Is tourism the main industry there? I wonder the boom in Hobart is mainly because of the low AUD rate, which I don't think it will sustain. Unless there is a long-term prospect with Tassie, I am not sure what else could drive the property market there. Education, wine production, a bit of mining in the north? Never been to Adelaide, but have been to Tassie several times as a tourist. We love cruising on Spirit of Tasmania.

Anyway, looking at the result of the poll with very little responses, Adelaide is leading.

 

Reason we bought in Launceston was high returns ( close to 8 % ) for well located properties in an area that was starting to move slowly with low vacancy rates .

Cliff

 

Adelaide is awesome for living, retiring, family raising. However for investment, have to be careful of what you get... Long in short, avoid any townhouses, apartments, sub-divided block. Look for something with land content within 10km radius of CBD, then you can see some growth over 7 years, although not astonishing either.

 

This is what my strategy so far with my journey. I'll have to look at if there are similar suburbs around Hobart, which are equivalent to what you purchased in Launceston. More DD to come.

 

Thanks for your tips. Townhouses, apartments and sub-divided blocks are never part of my plan, as far as my journey goes. One needs to be CF+, but with steady growth, if not the greatest.

It'd be great if I can get something with good land content within 10km of Adelaide CBD. Any insight, @D.T. ?

 

I agree with what he's said. From a PM perspective, Non-houses lease a bit slower here in Adelaide. Eg I'd rather get a house a bit further away than a unit closer if my budget was restricted.

It'll ultimately come down to what your budget is and what your goals and timeframe are. Perhaps give the suburb reviews on these forums a read if you'd like to know more about them.

 

Hobart is a rising market, low entry point, strong yields and rental demand, decent employment, tourism - invest there over Adelaide.

 

Sounds like Adelaide.