Hobart real estate: Is your home bringing in more wealth than your job?
In 60 greater Hobart suburbs, the average homeowner is earning more money from the growing value of their home than from their employer. Find out if your postcode is on the list >>
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HOMEOWNERS throughout greater Hobart have been accruing more wealth via property price increases than at their jobs.
And often the gap between an average income and a suburb’s median home value increase is a five or six-figure sum.
Provided exclusive to the Sunday Tasmanian, realestate.com.au’s Does Your House Earn More Than You? report shows a typical house in the 7019 postcode has grown in value from $312,000 to $475,000 across the past two financial years.
That change in Oakdowns, Rokeby and Clarendon Vale of $163,000 – or $81,500 annually – far outstrips this region’s average income of $48,248, according to Australian Taxation Office figures.
An $81,500 uptick equates to about $223 a day every day or $9 every hour across the two-year period.
On the back of price growth and numerous new home developments, the Rokeby market has gone from strength to strength since 2018 with the suburb’s record sale price jumping from $485,000 in 2018 to $507,500 then $605,000 last year, according to REIT figures. In June this year, an Emerald Drive house topped the record again selling for $677,250.
Hobart’s second-best earning postcode was 7053, home to riverside suburbs Bonnet Hill and Taroona. Here, the median price has shot up from $710,000 in 2018-19 to $907,250 – an increase of $98,625 a year.
The average income, according to the ATO, was $67,231, meaning a typical house value in these popular suburbs has grown by 1.47 times the average salary.
Rounding out the top three Hobart housing markets requires a trip out of the city to a baker’s dozen of leafy areas in the 7054 area code: Neika, Leslie Vale, Howden, Margate, Coningham, Lower Snug, Snug, Electrona, Barretta, Wellington Park, Ridgeway and Fern Tree and Tinderbox.
Tinderbox is another suburb kicking big goals this year, including the sale of a flash modern home that fetched a record price of $2.7m.
Tax office figures place the income in the 7054 neighbourhoods at $59,056. That was tens of thousands less than the $81,375 annual change in home values from $555,000 in 2018-19 to $717,750 in 2020-21.
In analysing the data from the pre-Covid market of 2018-19 and today’s property sales bonanza of 2020-21, REA Group economist Paul Ryan said a “tension” had been highlighted in areas that had recorded high price growth.
“People selling up and moving out of a major city are competing against local buyers on local incomes in more regional areas, and that is likely to cause conflict,” he said.
Mr Ryan said homeownership had been a pathway to growing household wealth and that the data showed how “exceptional” recent years have been for property values – and how they can grow some much higher and faster than income.
“This has been driven in part by Covid crisis stimulus packages and, in particular, low interest rates, which have directly fed into higher prices as people have been able to borrow so much more money,” he said.
With interest rates unlikely to fall any further than they already have, Mr Ryan said he would not expect future housing pricees to see the same exceptional rate of growth from the past two or even 20 years.
“However, cities in the spotlight, like Hobart or Launceston, may continue to outperform expectations as they grown into bigger cities in the own right,” he said.
While home prices keep rising sharply across Hobart and Tasmania, PRD Hobart director Tony Collidge said unlocking that wealth was not an option for everyone.
“We have to remember that the price you achieve for your home is irrelevant if you have to buy in the same market – all property prices have gone up, not just yours,” he said.
“The rapid rise in prices over the past seven years and the failure of wages to increase at a similar rate has seen our market increase to near unsustainable levels.
“This ultimately will place a ceiling on sale prices and rents because people won’t be able to afford them.
“Asking prices being out of reach of the average buyer could possibly see a transition toward rental accommodation, but if we don’t have enough of that it creates another issue.”
For Hobart residents that have yet to get a foot on the property ladder, building wealth through property remains a pipe dream.
Mr Ryan said there was a disconnect between the haves and have-nots.
“Some people are on the outside looking in,” he said.
“The burden of saving a 20 per cent deposit has become enormous in the last two years.
“There is an accessibility problem in housing at the moment – it is a big issue.”
SUBURBS MAKING MORE THAN THEIR HOME OWNERS
Postcode, Suburbs, Median average annual price change 2018-19 to 2020-21, Average total income
HOUSES
1 – 7019: Rokeby, Clarendon Vale, Oakdowns; $81,500, $48,248
2 – 7053: Bonnet Hill, Taroona; $98,625, $67,231
3 – 7054: Neika, Leslie Vale, Howden, Margate, Coningham, Lower Snug, Snug, Electrona, Barretta, Wellington Park, Ridgeway, Fern Tree, Tinderbox; $81,375, $59,056
4 – 7173: Forcett, Lewisham, Dodges Ferry, Carlton, Copping, Primrose Sands, Connellys Marsh, Carlton River; $67,250, $51,606
5 – 7004: Battery Point, Sandy Bay, Hobart, South Hobart; $83,750, $67,208
6 – 7171: Midway Point, Penna; $66,500, $53,705
7 – 7170: Acton Park, Cambridge, Mount Rumney, Seven Mile Beach, Roches Beach; $80,000, $68,841
8 – 7050: Kingston, Kingston Beach; $59,000, $54,466
9 – 7000: Glebe, North Hobart, Hobart, West Hobart, New Town, Mount Stuart, Queens Domain, Lenah Valley, South Hobart; $65,000, $62,518
10 – 7017: Tea Tree, Honeywood, Otago, Old Beach, Risdon, Grasstree Hill; $60,225, $58,011
11 – 7005: Dynnyrne, Sandy Bay; $74,750, $73,235
UNITS
1 – 7052: Blackmans Bay; $73,250, $60,040
2 – 7000: Glebe, North Hobart, Hobart, West Hobart, New Town, Mount Stuart, Queens Domain, Lenah Valley, South Hobart; $73,655, $62,518
3 – 7010: Rosetta, Dowsing Point, Goodwood, Glenorchy, Montrose; $48,750, $46,307
Source: realestate.com.au and ATO data. Median price figures required at least 30 sales in each comparison year. Some suburbs were large enough to span multiple postcodes, according to ATO data.
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