Hobart Property Outlook 2020
Property Market Update, 6 March 2020
The Reserve Bank of Australia cut interest rates this week to 0.50%. All big four banks have passed on the cut, with Westpac moving the quickest.
RBA governor Philip Lowe said coronavirus is having a significant effect on the education and travel sectors.
“The uncertainty that it is creating is also likely to affect domestic spending. As a result, GDP growth in the March quarter is likely to be noticeably weaker than earlier expected.”
Dr Lowe noted “further signs of a pick-up in established housing markets” and said home prices in Australia are “rising in most markets, in some cases quite strongly.”
“Mortgage loan commitments have also picked up, although demand for credit by investors remains subdued.”
“Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.”
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Hobart property investors making 10% per year
The median home value in Hobart is now $488,968, according to the latest data released from CoreLogic this week. Values in Hobart are up 5% over 12 months. Over the last five years CoreLogic says Hobart home values are up 45%.
Over the month of February, Hobart home values increased 0.8% said CoreLogic. Residential property investment returns were about 10.5% in 2019 in Hobart said CoreLogic. That includes a yield of 5% plus price growth.
Launceston and East Tasmania lead nation for house price growth
House prices in Launceston and North East Tasmania jumped up 7.1 per cent over the year to January 2020. Apartment prices went up 13.6 per cent.
The median house value in the region is now
$338,139, reported CoreLogic this week and the median apartment value is
CoreLogic’s Eliza Owen said Launceston and North East region of Tasmania has benefitted from a City Deal, increased tourism and a spill-over of growth from Hobart, as people seek relatively affordable housing elsewhere in Tasmania.
Hobart and Tasmania property outlook 2020
The median house price in Hobart is now $520,201 (March 2020). The median apartment price in Hobart is now $271,847, reported CoreLogic this week.
For the rest of Tasmania, the median house price is now $315,338. The median apartment value is $257,350.
Hobart property investors enjoy the lowest vacancy rates in Australia and continued demand for homes.
Rents in Hobart are up 5.5% over the past twelve months reported CoreLogic, way ahead of Adelaide in second place (2.3% growth in rents over 12 months).
Tim Lawless from CoreLogic said affordability constraints are likely to gradually push demand towards the middle and outer ring suburbs (in Hobart) “or towards cheaper price points in the medium to high density sector.”
“These more affordable segments of the market have generally seen lower rates of capital gain over the cycle to date and offer lower barriers to entry, as well as higher rental yields for investors.”
Regional Tasmania working well for property investors
Home values in all regions outside Hobart rose 1.1% over the last month and 3.5% over the last three months, reported CoreLogic.
Home values are up over 8% for the last 12 months and property investor returns in regional Tasmania are the strongest in Australia, according to CoreLogic.
Gross yields for property investors in regional Tasmania are about 5.3% with total returns including price growth of 14.8% over the last 12 months.
The seaside town of St Helen's on Tasmania's east coast has long been an idyllic, sleepy holiday spot.
One town that is doing particularly well for some homebuyers is St Helens on Tasmania's east coast where house prices have risen 20 per cent from $267,500 in 2017 to $320,000 in 2019.
Real estate agents say bike tourism is fuelling the boom while locals are struggling to find rental accommodation reported the ABC.
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