Hobart the only capital city where house prices fell in February: PropTrack Home Price Index

Hobart has defied the national trend in the housing market, being the only capital city to see declining house prices, a new report reveals. What an expert says about the next few months >>

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Hobart was the only capital city to record a downturn in house prices last month as the decline in home values stalled nationally, a new report has found.

The February PropTrack Home Price Index, released on Wednesday, showed that prices in Hobart fell by 0.29 per cent, while other capitals saw modest gains.

It comes amid growing economic uncertainty as the Reserve Bank continues to hike interest rates.

House prices in Hobart are now 4.09 per cent below the peak recorded in April 2022.

Total listings were up more than 30 per cent compared to the previous five-year average in the state capital, easing competition between buyers.

Elsewhere in the country, limited housing stock and strong demand saw prices increase, with Adelaide (+0.44 per cent), Sydney (+0.36 per cent) and Melbourne (+0.18 per cent) leading the way.

Nationally, prices are still 29.4 per cent above pre-pandemic levels.

“While activity in the housing market has fallen as interest rates have quickly risen, the limited stock available for sale has led to a pick-up in competition among potential buyers, insulating home values,” the report said.

However, it noted that it was “too early to call an end to the downturn”, with a further 0.25 per cent rise to the cash rate expected in March.

REIT president Michael Walsh. Picture: supplied

“The magnitude of price declines in Hobart has eased in recent months from the faster pace seen in June and July last year when interest rates first started rising,” the report said.

In regional Tasmania, home prices shot up by 0.16 per cent in February, now sitting 1.65 per cent above 2022 levels.

Real Estate Institute of Tasmania president Michael Walsh said there was “no doubt that Tassie’s [housing] market has had a bit of a reset” but described the February fall in house prices in Hobart as “slight”.

“We’re looking down the barrel of a couple more interest rate hikes and it remains to be seen just what sort of effect [that] does have,” he said.

“The interest rate hikes affect different segments of the market differently. We’re still seeing over $1 million sales kicking around, predominantly purchased by locals. So I think that’s a pretty solid tick.

“Yes, interest rates have impacted on first home buyers and investors but that’ll swing back around.”