TAS Hobart is absolutely flying

Discussion in 'Where to Buy' started by Inov8ive, 16th Feb, 2017.

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  1. hobartchic

    hobartchic Well-Known Member

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    I've never seen so many "for lease" commercial properties in Hobart CBD, including the Elizabeth Street Mall in the middle of the city. Even during the dreary days of the 1990s recession. Nor so many empty shops with significant discounting.

    I just don't buy the booming news, I think we are at the end of it. Blackmans Bay is seeing good prices, but recession level sales volume. If you sell you get a good price, but it's much harder to sell.

    Geilston Bay is beginning to go negative in price (been years since that happened), Carlton Beach has recording a price drop of 29% in twelve months which is commutable distance to Hobart CBD. Cambridge is going down in price, particularly land. Bruny Island land prices have dropped about fifty per cent in twelve months though the vendors in this week's real estate guide seem oblivious.

    Rental profit is sliding and an awful lot of investors are putting their places up for sale.
    Most of the "boom news" comes from the real estate industry!

    Retailers are struggling. It's not a good sign. Gloria Jeans's parent company is going to shut 200 stores due to sliding profit. Retailers like GJ should not struggle in a booming economy.
     
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  2. Invest_noob

    Invest_noob Well-Known Member

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    In your experience does commercial and residential in Hobart move at the same time?

    Also, GJ's parent company RFG have a lot of issues and that's the reason why their chains are closing down. It's not just in Hobart.
     
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  3. hobartchic

    hobartchic Well-Known Member

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    Yeah GJ's has pretty well left Hobart I think (not sure about Eastlands store but Kingston and Hobart went a while ago). My point was that coffee sells when thing are good. Mind you, plenty of coffee places but if GJ was not profitable...you have to wonder.

    I've never seen anything like this in the CBD in terms of commercial but there has been, and continues to be plenty of commercial property investment and clearly people are making good money out of it. I suspect some of the landlords are shooting themselves in the foot - asking too much, combined with lower retail spending, leaving them with nothing. Cranes and hotels everywhere. Just so many "for lease" signs in good places.
     
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  4. hobartchic

    hobartchic Well-Known Member

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    Do commercial and residential drop, or increase, at the same time? Generally, yes. People find work hard to come by (businesses shutting), commercial enterprises empty or cheaper, can not afford ever increasing house prices. I think it's likely to go together.
     
  5. Mark

    Mark Well-Known Member

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    Looking at the medium prices in the past 4 months on realestate.com.au and find the market slowed down a little bit. But, I find i am still competing with over 5 groups for properties with reasonable asking prices.
     
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  6. Bozley

    Bozley Well-Known Member

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    Hi Hobart Chick
    the suburbs you mention are very low turnovers places hence the stats are not meaningful. I suggest looking at Hobart price movements generally - a more meaningful indicator. I don't know anything about commercial movements. If you are positing that commercial and residential prices are in sync you should back that up with evidence
     
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  7. Pentanol

    Pentanol Well-Known Member

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    Not too surprised by this looking at the median weekly wages in Hobart - properties will still be competitive in the lower ranges but once it reaches $500-600k it will stall as many people will be unable to afford it. This is obvious in looking at the proportion of jobs over $60k. As well as the HCC being anti-development, this is also why vacancy rates are so tight.

    The median house prices are still around $400k so it's still got a bit of steam left, but I agree that it's not likely have another year like this year.
     
  8. Luckycharm

    Luckycharm Well-Known Member

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  9. Luckycharm

    Luckycharm Well-Known Member

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    @Pentanol, what is the basis for your assertion that hobart is running out of steam?

    The numbers tell me the opposite but I am limited to desktop analysis; you lived there so what am I missing?
     
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  10. Pentanol

    Pentanol Well-Known Member

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    Median weekly household wages. I believe at some point when Hobart reaches a certain median price, investors will require a minimum rental amount that locals could not afford and sentiment will change because I believe it's mostly an investor driven boom. This will also be the price point that locals could no longer afford and due to the lower median wage the cap will be much lower than the other capitals. Data only can only tell part of a story. I did say based on the data Tassie will still be the best performing state for the next 1-2 years until it reaches median of around $500k before stagnating again. Just picture this, Hobart is unlikely to have either an operational train or a tram for at least 1-2 decades and currently with the third worse congestion in the country, they may become the highest in the next decade.

    Also, people would not be coming here just for the schools like the other states. Tassie just can't compete in that regard. So less drivers in that regard.

    Also surprised by the couple in that article that just left for Hobart without any job offer. I hear of people trying unsuccessfully for a year before moving off again.
     
  11. Luckycharm

    Luckycharm Well-Known Member

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    Yes data can only tell part of the story, but it helps me to weed out bias and subjectivity.
     
  12. hobartchic

    hobartchic Well-Known Member

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    I did back up what I said with anecdotal evidence. Blackmans Bay, nor Geilston Bay, are not low turnover suburbs. Perhaps they are traditionally a bit lower but they are also higher price, blue chip middle to upper class suburbs. Blackmans Bay is only low turnover this year, with a considerable drop in turnover. If things were booming the sales volume would be higher.

    As for the rest of Hobart, most are seeing the volume of sales go down and the sales prices are going down on the outer reaches. Cambridge has a vast new homes area, so any drop in sales price, particularly land, is significant. It's about ten minutes from the business district of the Eastern Shore and twenty from the CBD.
     
  13. hobartchic

    hobartchic Well-Known Member

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    I also backed up everything I said about those suburbs with statistics. Recessions/ down turns do not tend to start in the inner popular suburbs with higher prices.
     
  14. Toon

    Toon Well-Known Member

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    How Hobart became a mainlander’s dream

    "In Tasmania's capital, outsiders are buying boltholes, developers are circling and tourism is soaring. But not everyone's benefiting from the city’s boom."
     
  15. hobartchic

    hobartchic Well-Known Member

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    Tourism has been booming but it's a fickle trade that relies on discretionary spending. No one, contrary to popular opinion, needs a holiday. Lately, I'm not seeing as many Asian tourists in Hobart, would love to know what the stats are for this year.
     
  16. hobartchic

    hobartchic Well-Known Member

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    Tourism stats only available to Sept 2017. Booming at end of last year certainly.
     
  17. Inov8ive

    Inov8ive Well-Known Member

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    I take your point re: commercial property, but this is a bad example to support your argument. RFG have been pushing this failing model for a long while and tbh GLoria J’s are probably the best of their failing portfolio. The impact of this downfall on Hobart will be minimal. The vacancy rate and rental yield together with the current sentiment indicates that we have more growth to come. Still a buy in Hobart
     
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  18. hobartchic

    hobartchic Well-Known Member

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    Hmm...residential clearance rate for auctions 13 per cent a fortnight ago, about 68 per cent last week, 17 per cent this week. So I guess time will tell.
     
  19. Bozley

    Bozley Well-Known Member

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    There were only 7 auctions in the whole of Tasmania last week. These numbers aren't big enough to be statistically significant.

    Hobart is experiencing increasing demand and decreasing supply. The only way for prices to go while this situation lasts is - up.
     
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  20. Inov8ive

    Inov8ive Well-Known Member

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