First IP - What am i doing?!

Hello everyone,

Im looking for some advice in taking my first tentative steps into the property market.

Ive got a 200k deposit ready and have been pre approved through a mortgage broker for 350k, giving me a budget of 500-550k.

My objective is for something that will perform well as an investment through strong CG growth and I'm prepared to hold for the long term.

Im based in Hobart and have been directing most of my searching here. My personal experience on the ground and what a number of members on this site also know is that the Hobart market is extremely heated! Properties will have numerous offers within days of coming to market and are going for well over asking price. As a newbie this level of competition makes it daunting to take that first step into the market and to find properties that have obvious value. Ive also heard that Hobart has historically gone through these periods of rapid gains before settling back into hibernation.

My main questions would be:

1) Has Hobart in someway run its course? Is buying into the market at this stage (possibly getting close to a peak) a bad idea when Hobart has historically gone dormant for long periods and when there is such competition amongst buyers? Basically have the real gains already been made in the Hobart market?

2) Where else would it be worth considering? Ive been looking at Launceston as i know a few people here have. Would it be worth considering Melbourne also? For my budget i think i can afford a 2 bedroom apartment 5-10km from the CBD. I know there has been a lot of talk about an apartment glut in Melbourne but does this extend beyond cookie cutter developments in Southbank/Docklands? Melbourne seems to have good long term growth forecasts.

Any thoughts and ideas would be much appreciated.

Big thanks to everyone that had contributed to the wealth of information already on this forum.

Thanks, Thom

 

Hi Thom,

Welcome to the forum. Hobart like every real estate market goes through cycles in which there are several years of stagnation followed by a couple of years of growth. From my observations of Hobart there has been about a 12 month period where the market has been quite good. No one has a crystal ball and if they say the do run.

FWIW If you are comfortable with the area you will find it far easier to make a purchase decision. I believe that there is still some value to be had in Hobart and the yields are still quite attractive. Have a read of the Hobart forum if you haven't already. I certainly would not be adverse to buying there myself.

Good luck.
Mick