TAS Hobart real estate is 'hottest in Australia'

Two recent articles re Tassie

Hobart is losing grip of its title as Australia’s most affordable city, with the average house price now on par with Adelaide, according to research

The good news is filtering through to other parts

Prediction for strong house price growth in Tasmania's north and north-west

My personal observation is that central well located places in Hobart have gone up around 30 % , peripheral suburbs in Hobart around 10-15 % . Launceston has moved up in the last 2-3 years by around 10 % but is only just above the previous peak .

We paid 267 in Claremont just under a year ago and probably up around that 10 -15 % , but renting for 340 so still healthy return

IMHO the majority of the boom is yet to come

Vacancy rates are low and rental demand is high.

Cliff

 

CREAM OF THE CROP

Suburb, median growth percentage of change for 12 months, 3 years, 5 years

Sandy Bay units: 23%, 23.1%, 21.6%

West Hobart houses: 19.7%, 30.1%, 35.7%

West Moonah houses: 15.8%, 21.8%, 22.7%

Midway Point houses: 15.2%, 17.9%, 18.7%

Sandy Bay houses: 14%, 23.3%, 32.1%

Moonah houses: 14%, 18.8%, 18.3%

New Town houses: 13.9%, 25.9%, 23%

Glenorchy houses: 11.1%, 13.7%, 15.2%

Lenah Valley houses: 10.9%, 24.5%, 27.6%

Austins Ferry houses: 10.2%, 14.2%, 13%

 

Home prices in these suburbs have grown by over 30 per cent in one year

Tassie growth delivers six of the best


If I was looking to invest 1-2 mil in RE with good growth on the cards and needed strong yields I'd choose Tassy any day over NRAS stock.

 

Hi Rolf

I think that it will go past logan level returns , simply because of the hype surrounding it and it is still the cheapest capital city at this stage ...

We've seen what's happened to 2770 in the current cycle . Maybe it won't get to those levels , but at the moment there's no wider spread perception that anywhere else is booming at this stage

Cliff

 

I think the Airbnb market is a big player and the pressure will come off rents to some extent when some interstate Airbnb owners get tired of running it as an Airbnb and want a more passive investment. I'm wondering (but have no direct data) of how interstate owners faired when their Airbnb's flooded out and whether that will encourage them review their strategy. If more Airbnb's were put back into the normal residential rental pool that will impact the pressure on rents.

 

.....and when the speculators turn their attention back to Perth or Adelaide or Darwin? Hobart lacks new construction but also lacks population growth.

West Hobart is a good buy in any market. Solid demand no matter the timing.

 

Not necessarily so ... This has previously been posted , but as you've raised it and it needs correction .

Tasmania top of the pops for population growth, report finds

In terms of price growth , a lack of new construction is a good thing

Part of the problem with the inner city unit markets in Melbourne and Brisbane is too much new construction

Cliff

 

0.64% state growth is nothing to crow about.

Hobart has what - 225,000 people? Penrith maybe a bit less for comparison, maybe 200,000? 0.64% would be all of 1250-odd people, but Hobart is more like 2.5% growth lately so call it 5,000 odd.

Vacancy rates at lowest ever (less than 1%) but the unemployment is still around 6% - suggesting it's the grey set bringing their Melbourne cash over.

I just can't see it being sustainable.

 

Compared to Penno @ 4.9%

Linky

 

I tend to agree with @See Change that there is still quite a lot of growth left before the market cools down. A few reasons
- low total growth in the past 10 years
- under supply
- accelerated population growth
- improved economy
- Sydney and Melbourne are too expensive
- Aging population seek peaceful life style and affordable properties

Have to admit that Hobart market is a little bit volatile. But in the long term it does as well as other capital cities based on the past 2-3 decades of data

 

Historically (going back a couple of family generations), West Hobart has had periods of little to no growth. I'd be careful with the timing.

 

2017 we saw insane price growth.

In 2018 some people are still willing to pay a small fortune for an old house. Plenty of lonely old houses on the market. They are not exactly flying out the door at the moment. And plenty of investors selling up...with ads telling people that it would make the "perfect investment".

2018 we are beginning to see low to negative growth on the periphery e.g. Brighton/ Carlton. People are still over paying for Dodges Ferry in my opinion but stock's slow to sell.

Sure, some people are paying half a million for a wreck close to the city where they will freeze their toes almost off. But the sales volume is way down. Price will follow.

I saw an article the other day about how Hobart was booming and it was based on clicks on real estate ads. Not on sales. Talk about desperate.

 

I use an online booking service for visiting the north of the state. Every few days I get promotions that prices are down all over Tassie and the prices are so low I doubt many people are making much money. Every man and his dog in Tourism and Hospitality is doomed to failure.

 

I believe anyone jumping onto the Hobart bandwagon is about as naive as I was jumping into Gladstone too late. Several years of good steady growth == over done in my experience.

 

Had a chat to some agents yesterday and in the last couple of weeks ( after dark **** ) , the market has quietened slightly ( things not selling on first day with multiple offers ) , BUT , their opinion was this was just the normal mid winter slow down . Big issue with lack of stock with many locals not prepared to sell as they're having problems finding their next property due to lack of stock ....

Though still very hot . One agent quoted a unit that sold well above expectations . Another owner in the block approached agent saying " Can you get that for me " . That one sold without any advertising , within days , for more .

The place we bought in August last year has probably gone up close to 20 % on what we paid for it and on current value would return around 5.5 %

Anyone who has watched a boom close up knows it's not a straight line , but more a series of steps . One issue facing the market at the moment is finance . Not so much it's not available , but more with valuations not stacking up due to the rapid increases and a lack of comparables . Again have seen this issue in previous booms in Sydney and Brisbane , so nothing new .

Also just had an update from an agent in Launceston , Richard Bailey . Reports that the economy is tracking well with new businesses now having problems getting staff , all sectors of the agricultural industry experiencing record profits , farmers , finally being able to afford that new kitchen / bathroom / car etc .

Agree with Hobartchic that places like west hobart have and will have long periods of no or minamal growth , BUT so do areas in Sydney ... When we were buying in Sydney in the late 2000's , Sydney had the lowest ten year growth of any capital City . Timing is critical . If we didn't already own five rentals in Hobart and weren't at the point of wanting to decrease debt , I'd still be happy to buy there .

Cliff

 

If you can buy another property now, would you be more inclined to buy in Hobart or Launceston?

 

50 / 50 .
Hobart is booming at the moment , but some of the price rise has already gone .
Launceston is not in a generalised boom from what I can see so can still buy at prices similar to around the peak of the previous boom ( actually about 15 % higher in invermay which was our main target ) ( though haven't talked to agents on the ground ) but logic says it's going to soon with decreasing stock levels etc
Can probably get better return in launnie at the moment so might be easier to hold .

Just gone back and added the bold bits : In reality at this stage I'd probably go Launnie , because most places in Hobart have moved by around 30 % and launceston is lower than that ? 15 % . I'd be doing that with the view point of holding for around 4-5 years and hoping to catch close .

However having said that I've never bought when an area is booming , I've either position well before or just as it's about to take off , as per last year . Main issue with buying in a boom is the limited choice of properties


Cliff

 

I think anyone who bought into Gladstone was naive ... Simple look at the underlying economy should a large number of jobs during the construction phase of the various projects up there followed by a much lower level of employement to run them.

We did our dd on all the Costal cities in Q'land and gladstone stood out as the most precarious so that was one we didn't buy in and glad of it .

Hobart on the other hand has a diversified economy , is a long term state capital and Tasmania over the last years has started undergoing a change in where it is positioned . People who don't look at those things and just remember it as a back water are still in denial .

Several years of steady growth ?? Where we bought last year in Claremont it has only started moving significantly last year . The property we bought was on the market for several months but the owner was asking just a bit too much ( I'd enquired about it about three months before and it was about 10 k above market ) . Saw the movement happening and moved as everything else was selling and this property had stagnated and everyone assume there was something wrong with it .

Cliff