TAS Time to Hype Hobart Thread?

This isn't share trading where there is barely any transaction cost from buying and selling. Like it depends on where you are. People like see change can do this where they can afford to get it wrong without significant issues. If I get it wrong, I'll be in a bit of trouble. If everyone can predict when the right is to ride the wave and sell off, everyone would be a millionaire. I wish I had this ability when I was share trading. I didn't say I was a never sell person, I'm just saying I can't afford to buy the wrong property. The admin side to properties is also stressful too so I would also like to do it as little as possible.

 

A lot of investors here are looking around Geelong and Werribee. I've found something in Corio that will yield me over 6% which is good by Vic standards with CG and development potential. I believe it was pretty good value before the FHB rush after 1 July. You can still get good deals if you're quick too! I can't see any other states with the right fundamentals other than QLD and Vic atm. Hobart will have a much smaller pool of potential tenants too compared to others.

 

Hi Pentanol

Had a quick look at Corio and the stats don't look bad . Hasn't moved much for a while ( positive ) though starting to move at the moment .

All similar to Hobart .

Big difference is that the stock on market in Corio is holding steady while in Hobart it's falling through the floor which indicates it more likely to move strongly in the near future .

For me there's enough positives about the economy in Hobart to not worry . Didn't Geelong have a big car closure recently or upcoming ?

Most times I buy with a time frame of picking up significant capital growth in 5-7 years , but our latest one , if things go according to plan , sell in a shorter term frame and then buy in an area which hasn't gone up this cycle.

Cliff

 

It's about being able to hold it long term (yield obviously helps) but monitoring market and doing the calcs often depending on the prices at the time. My tassie IP is one of my highest yielding but I'm watching the market closely. I'm unsure how often see change sells his IPs but I'm sure he makes sure he can hold should the figures not work out.

A general point is to understand how much pulling equity for other purchases and CGT costs impact on the bottom line, especially if you ever have to sell in an emergency, where you may end up with a loan and no security against it because the property sold for less than the refinanced amount.

 

Yep good on you as you probably snagged a good deal prior to the investors' rush - atm there is nothing in Tasmania that I would choose over Melbourne or Brissie. Anyway good luck with that, Tassie market is fraught with danger and unpredictability. Anyway, one day I will have exposure in Tassie when my parents pass their property onto me so I'm not too fussed about using my own capital. If I wanted yield I'll be buying in Brissie not Hobart. Tassie got like 400k population and Brissie is over 2m and with a higher potential for interstate migration as the job prospect is better. The weather is also nicer. Young people like me have left the state for better job opportunities and higher wages.

 

Has anyone here been considering Mornington in Tassie? Any thoughts on how it's growth might compare to Glenorchy / Claremont in the near future?

 

Hi @Rob1, I purchased a couple of properties in Hobart last year and considering one more in the coming months. I have Mornington on my watch list because the REAs down there have mentioned it to me many times as a suburb to watch, along with Warrane. Both the suburbs are very close to the more desirable suburbs of Rosny and Bellerive, close to the city, close to all the amenities in Rosny but for some reason have traditionally been lower SES areas.

Mornington has some good houses on large blocks, but you have to be careful of the street. There are a lot of undesirable neighbours - multiple cars on the front lawn, old couches on porches etc. But it has seen some good growth and decent properties do not stay on the market very long. Yield consistently over 5.5%. I personally prefer it to Glenorchy.

As someone who grew up in Hobart and still visit frequently to see family, the locals have this aversion to suburbs that are "across the bridge" so I think that is why the Eastern Shore suburbs are still a little cheaper than the western shore.

 

Thanks Pat.
I started out looking at Moonah - Claremont, but perhaps some of the eastern suburbs are worth a closer look. The yields look quite good. I'll just have to avoid those old couches.

 

@Rob1 I was starting to look at Claremont. What's teh market like? and what yields did you experience for 3 or 4 bed houses? any impressions on claremont?

 

The Mona Effect: Hobart house prices surge 15 per cent in 12 months

 

The Mona Effect: Hobart becomes Australia’s hottest market after rapid price surge
JENNIFER DUKE JUL 23, 2017
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Most mainlanders are more likely to associate Hobart with Mona than its real estate market, but the latest data shows we’re no longer just holidaying in Tasmania, we’re buying there.

In the past 12 months Hobart house prices grew faster than every other capital city in Australia – up 15.2 per cent, data from Domain State of the Market report shows.


For the first time the median house price surpassed the $400,000 barrier, with the growth rate at its highest in more than a decade.

Glen Hunt is a Sydney investor who has recently bought properties in Hobart. Photo: Daniel Munoz

While this may come as a surprise to some, savvy investors have been betting on a Hobart revival for much longer.

Sydney-based accountant Glen Hunt has a portfolio of eight properties across Australia – including his home in Penrith, and investments in suburbs such as Dubbo, Cairns, Wollongong and Lutwyche.

“Investors are seeing a lot of positive things happening in Hobart at the moment. . . we are finally on the shopping list.”Todd Stevenson, Roberts Real Estate Hobart

But one of his most recent portfolio purchases was a newly built townhouse in Hobart’s Moonah for $310,000 in September 2014. He wasn’t the only investor buying – the other two townhouses in the block were also bought by investors at the time.

Hobart house prices grew the strongest in the country in the 12 months to June.

• Related: The unexpected hotspot making waves among investors
• Related: Five reasons to ditch the mainland for Tassie
• Related: Prestige property buyers eye Tasmania

“When it was initially pitched to me I thought ‘really, Tassie?’ but it turns out there was a lot of upside and I took a leap of faith,” Mr Hunt said.

Renting at $360 a week, the property “pays for itself” and has had only two days of vacancies.

“It’s one of the best-performing properties I own,” he said.

Mr Hunt purchased a newly built townhouse in Hobart for $310,000 less than three years ago. Photo: Supplied.


His buyer’s agent, Simon Pressley managing director of buyer’s agency Propertyology, wouldn’t have considered buying in Hobart 10 years ago as it was an economic “basket case”.

But in the past two years he has bought more than 80 properties on behalf of investors across Australia.

Tourism, an increase in business confidence and an improved economy has seen Hobart property prices begin to soar. Photo: Getty Images

“The market is hotter there now than data is reporting,” Mr Pressley said.

“We feel confident it will be Australia’s best-performed market for capital growth and yield over the next few years.”

He pointed to strong growth in local industries, such as tourism, education and food processing, along with a change in government as the “pick up” the state’s economy needed.

“Mona has made a contribution – it has changed the image that Hobart presents to the rest of Australia and has been a drawcard for tourists,” says Saul Eslake.

“We’ve seen about 18 months’ growth – which is usually what is needed for the majority of investors to feel confident to put a toe in the water. There’s still lots of room for growth,” he said.

It’s no surprise why Hobart has proven popular with east coast investors priced out of the Sydney and Melbourne markets. In addition to surging prices, it also boasts the cheapest homes, lowest vacancy rates and highest rental yields of any capital.

Hobart apartment prices increased 7.7 per cent over the 12 months to June, to $310,854.

Economist and vice-chancellor’s fellow at the University of Tasmania, Saul Eslake, noted the growth was “off a very low base” as Hobart had underperformed in terms of property prices and its economy compared to most other cities in the past five years.

“Mona has made a contribution – it has changed the image that Hobart presents to the rest of Australia and has been a drawcard for tourists,” Mr Eslake said.

It had also helped accelerate a surge of restaurants, cafes and hotel development in the city, he said.

But he wasn’t convinced prices growth would necessarily be in double figures again in the next 12 months, warning “history would counsel caution” with surges in prices in the past not being maintained for the long term.

Todd Stevenson from Roberts Real Estate Hobart said there was strong buying activity from upgraders, as well as interstate and local investors, pushing up prices in the inner suburbs.

“I believe investors are seeing a lot of positive things happening in Hobart at the moment from business and development to strong tourism numbers,” he said.

“We are finally on the shopping list.”


Domain Group chief economist Andrew Wilson pointed to Hobart’s “tremendous affordability” compared to Sydney.

“A change in government, revival in infrastructure and migration picking up has reactivated confidence and an improvement in the local economy,” he said.

Hotspotting founder Terry Ryder had also seen signs of growth in Hobart, with the state economy having “improved enormously”.

He estimated a third of the investors in Hobart were from Sydney, and believes this could increase as the east coast capitals approach the top of their market.

In July, Hobart was ranked 34th for house price growth on Knight Frank’s Global Residential Cities Index, which ranks 150 cities worldwide. It was in 77th position in the report for the same quarter in 2016.

Knight Frank head of residential research Michelle Ciesielski said there was an uptick in the first quarter of 2017, with three cities from Australia in the top 50 on the list, compared with none six months ago.

“Hobart prices strengthened for the second quarter, stimulated by those priced out of these heated east coast cities,” Ms Ciesielski said.

Commonwealth Bank’s latest State of the States report placed Tasmania fourth, compared to equal last place in 2016, though there was little separating it from the bottom three states – Queensland, Northern Territory and South Australia.

 

In the article they say the following

"In the past 12 months Hobart house prices grew faster than every other capital city in Australia – up 15.2 per cent, data from Domain State of the Market report shows."


BUT WHEN I READ THE "DOMAIN STATE OF THE MARKET REPORT" THEY QUOTE HOBART AS YEAR ON YEAR 11.9% AND MELBOURNE IS THE TOP GROWER AT 15.2%.

Sorry for shouting just wanted to make it clear which were my comments. I assume a correction will be coming from domain at some point.

Quarterly stratified median prices

HOUSE MAR 2017 DEC 2016 MAR 2016 QOQ % YOY %
Sydney $1,151,565 $1,120,541 $1,018,442 2.8% 13.1%
Melbourne $843,674 $811,515 $732,104 4.0% 15.2%
Brisbane $532,504 $539,839 $514,865 -1.4% 3.4%
Adelaide $514,853 $505,794 $490,627 1.8% 4.9%
Perth $561,165 $571,303 $578,426 -1.8% -3.0%
Canberra $705,059 $669,887 $638,714 5.3% 10.4%
Hobart $389,625 $371,693 $348,119 4.8% 11.9%
Darwin $598,914 $581,802 $619,381 2.9% -3.3%
National $801,204 $783,785 $726,856 2.2% 10.2%

 

Ok and one more post for good measure

Their hotlink in the article is to the March Quarter State of the Market report. So they sent me to the wrong report.

The current June Quarter report is here and confirms 15.2% YOY growth for hobart houses.

State of the Market Report – June 2017 | Domain – Product

 

Hobart traffic: Can a ferryman fix the peak-hour gridlock - ABC News (Australian Broadcasting Corporation)

Yep but one of the worse traffic congestions for a city of 220k with no other options for transportation. It's basically just a two speed economy with a Sydney supply restrictions. I dont know any top economic or finance students who chose to stay Tassie got work. We all left and have not returned. I'll be very cautious about buying in Tassie.

 

Sounding like a record stuck in the same groove pentanol ....

The demographic that finds Tasmania attractive is not your demographic . Just because you couldn't wait to leave doesn't mean that there isn't a whole pile of people who want to go there for exactly the same reasons why you left . Same applies to Hobart and Launceston and the whole of Tasmanian.

Last cycle Tasmania boomed when the economy was a basket case while now ( by Tasmanian standards ) it's the strongest it's been in a long time . Add in the high returns , low vacancies and a market which from personal observation is around as hot as Sydney was at the end of 2013 ...

While I expect Brisbane to move up , right now , I wish I had a couple more in Hobart and a couple less in Brisbane .

Cliff

 

Turn out the lights and and last one out shut the doors, the top economic and finance students have left for Sydney, Hong Kong and London.

You do know capital growth is possible in a city without a strong finance industry? Hobart will play to its strengths.

Would you care to make a prediction for Hobart __% growth for the Domain State of the Market Report June 2018?

 

@Pentanol are you buying in hobart so trying to put everyone else off???

i too left hobart for work at 25yo, as did many of my friends. but unlike you, many of them have now migrated back to hobart for the less hectic lifestyle, to be closer to family, and for the growing foody culture there. i would absolutely love to move back, it can offer everything i have in sydney without the stress. for many family reasons i cannot move back just yet, but i see huge growth and change happening there. areas that were very working class and rough 20 years ago are now gentrifying. the traffic is nothing compared to sydney.

the market there is crazy. i have been buying there the past 18 months and i have missed out on endless properties because they are selling within days.

 

Currently I can commute into work faster in Sydney than I could in Tassie and the wages are a lot higher than Sydney. There is nothing appealing about Tassie. Lol "growing foodie culture" as opposed to already established foodie culture in Sydney? The food in Sydney is also comparably cheaper - Walk into Burwood for a cheeky 9 dollar Chinese lunch special everyday. Yeah can't beat that. Not sure what industry you're in Pat, but there's are many 9-5 jobs in Sydney too where I can get home quicker than Tassie and get paid more for it! Have you driven to the city in Hobart lately? In Sydney I don't even need a car which means that I actually spend less on car expense and maintenance. I didn't have a car in Melbourne when I was working there for 9 months either. I live in Strathfield and only pay $350/week for the apartment we're renting. The life in Tassie is just so slow and mediocre that it frustrates me. If Hobart can improve its public transport by rolling out a light rail then I would be more willing to invest there.

Why would I want to invest in Tassie when other places with similar population are better value with more diversified economy like Geelong, Ipswich, SC etc. Adelaide is another capital I would go over Tassie too. Don't even get me started on the weather there. It is heavily reliance on Tourism and its hospitality industry. I always said its a place you go to die, not to live. Hobart is definitely not a place where you can buy and hold, thats for sure. It suits Cliff because he is an active investor.

I'm happy to admit that Hobart outperformed whereas Brissie underperformed though with regards to this cycle but as a B&H investor who is unlikely to ever sell any property which means I rely on long term fundamentals rather than go in and then out again for short term areas like Hobart. Brissie provides this, I guess Hobart does provide some value as it started from a low base.

You guys only see the positive and not the negatives about the state and you may lead the newbies astray if they read your posts. I'm playing the devil's advocate. I do this at work too.

Well I can only verify people doing the same degree as me as I have all of them on linkedin. I can also confirm that all the people that I knew from Medicine (why work at Royal Hobart Hospital when you can work at Westmead, Concord, Royal North Shore, RPA etc), Tech, Pharmacy, Law (why work for Allport when you can work for S&G, Kings and Malleson) and Engineer (why work for Hydro Tasmania when you can work for Honeywell, AGL or Synergy) have also left the state.

 

Its not all about work mate, and getting to work, and how much you get paid for a lot of people. Believe it or not, slower pace of life, cheaper housing and open spaces are appealing to many people. You ever been to Bondi on a hot day? You ever been on the M5 when there's an accident in peak hour? Sydney aint all that

 

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