‘Hobart’s underperforming’: Why regional home values are on the rise in Tasmania

While Greater Hobart home values look promising, it’s the areas outside the city that are firing, a new property report has revealed.

931 Nicholls Rivulet Road Nicholls Rivulet. View

Property owners are sitting pretty around the state with new figures showing their homes have never been worth more.

PropTrack’s June Home Price Index shows a 0.55 per cent uptick in Hobart dwelling values last month, which was behind only Adelaide and about the same as Sydney.

But that’s not where the action was.

Regional Tasmania recorded the smallest possible gain of 0.1 per cent in June, but that was enough to push the rest-of-state housing market to a new peak median dwelling price, houses and units combined.

279 John Lees Drive, Diston. Elders

It now stands at $507,000. That is more expensive than regional NT and SA, and about $44,000 cheaper than regional Victoria.

With 3.32 per cent annual growth, regional Tassie’s median is now $19,700 higher than it was at this time last year.

Compared to prices five years ago, regional Tasmania is up by 58 per cent. That’s streets ahead of Hobart, which is 32 per cent higher than it was in 2020.

At an Australian Bureau of Statistics SA4 level, the northern regions have outshone the rest of the state.

PropTrack’s research showed the median value of West and North West dwellings is up 4.96 per cent annually.

Launceston and the North East climbed 3.37 per cent and Hobart by 2.34 per cent. The only downturn was in the South East, where prices fell by 1.05 per cent.

REA Group senior economist Eleanor Creagh said while regional prices have risen over the past year, much of regional Tasmania’s price growth was recorded during the pandemic period when it was outperforming.

Eleanor Creagh, senior economist, PropTrack. Picture: Supplied.

“Hobart was too, at this time, but more recently the city has been underperforming,” she said.

“With the expectation of further interest rate cuts this year, we would expect to see prices in regional Tasmania lifting further.”

Ms Creagh said these areas also have an affordability advantage.

“Affordability remains a constraint, and that is pushing demand down-market with lower tier segments of the market now outperforming.”

Real Estate Institute of Tasmania president Russell Yaxley said the growth figures for the northern regions have been a trend for a number of years.

He said these markets were leading the way for property value growth. However, they remain relatively affordable.

“Affordability has a significant impact on what people can aspire to purchase,” he said.

“For first-home buyers and investors, regional prices offer good opportunities.

REIT president Russell Yaxley

“And lately, Hobart is also showing some signs of growth.”

Real Estate Buyers Agents Association of Australia president Melinda Jennison said Tasmania’s housing market is gaining “serious traction” this year.

Tasmania’s property market is making a strong comeback, Ms Jennison said.

“Buyer demand and competition is pushing sales volumes and prices higher across much of the state,” she said.

“From surging interest in units to packed open homes and tightening supply, momentum is clearly building as we head into the second half of the year.”

HOME PRICE INDEX JUNE

City, Monthly growth, Annual growth, 5-year growth, Median value

Sydney 0.5% 3.25% 41.82% $1.182m

Melbourne 0.34% 0.99% 19.64% $818,000

Brisbane 0.31% 8.26% 88.48% $908,000

Adelaide 0.33% 7.8% 89.84% $836,000

Perth 0.63% 9.84% 88.21% $837,000

Hobart 0.55% 2.34% 32.87% $656,000

Darwin 0.22% 5.83% 34.89% $525,000

Canberra 0.29% 0.49% 34.89% $836,000

Source: PropTrack June all dwellings

Originally published as ‘Hobart’s underperforming’: Why regional home values are on the rise in Tasmania