Hobart real estate: Strong demand pushing home values higher

Is there a limit to how high Greater Hobart home values can climb? An expert believes a $600,000 median is not far away. LATEST HOME VALUES REPORT >>

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HOBART’S median dwelling value is flying higher and higher each month this year.

So much so that locals wanting to buy a home in greater Hobart are being priced out of their own city.

In the latest data from CoreLogic, Hobart home prices – houses and units combined – set a new benchmark at $574,543 — up nearly $90,000 in 12 months.

That figure was up from $561,254 (April), $548,686 (March), $535,994 (February) and $513,552 (January).

Climbing at a similar pace, and keeping a winter downturn at bay, would mean Hobart’s prices will pass $600,000 within months.

At this time one year ago, Hobart’s median was $486,056 (May 2020). In 2019 it was $445,235. That means the price of homes have jumped more than the annual median Hobart household income ($64,168 in the 2016 census) in a year.

TasCOSS chief executive Adrienne Picone said rising house prices limited opportunities for Tasmanians and had a flow-on effect on rents.

“Tasmanians that are struggling to find a home tell us that the instability of not having a roof over their head impacts on their ability to access education, training and job opportunities,’’ she said.

“We know that with house prices rising to unprecedented rates, home ownership is unattainable for many people, especially young people trying to get into the market.

‘This has a knock on effect of driving more people into the rental market. A shortage of rental stock drives up rents.”

A $600,000 median could be right around the corner says REIT president Mandy Welling. Picture: Chris Kidd

CoreLogic’s Home Value Index, released Tuesday, revealed Hobart’s monthly median price growth leads the nation at 3.2 per cent, just ahead of Sydney at 3 per cent.

Hobart’s annual growth figure reached 16.5 per cent, up from 13.8 per cent in April.

Regional Tasmania posted Australia’s second strongest results behind regional NSW including a 1.9 per cent monthly uptick and 18.1 per cent annual change in dwelling values.

Compared to April, Hobart’s annual change in rents was up from 6.3 per cent last month to 7.2 per cent (houses) and 5.4 per cent to 7.1 per cent (units).

Real Estate Institute of Tasmania president Mandy Welling said the Hobart market continues to surge forward with what appears to be an “unstoppable force”.

“A $600,000 median does not feel far away with Hobart gaining momentum again in May,” she said.

“Once again, this has been driven by a short supply of property for sale, confidence in the market and a “safe haven” reputation.

“We expect this upward trend to continue.”

It is not just Hobart’s pricey inner ring suburbs where the market is firing, with PRD Hobart agents selling an entire subdivision in Magra near New Norfolk within a week.

Paul Reed and Andrew Hills sold 52 lots to a mixture of young buyers, smaller developers and a couple of builders.

Land is selling quickly in New Norfolk says PRD property consultant Paul Reed. Picture: Roger Lovell

Mr Reed said the blocks ranged from 500sqm to 780sqm and fetched between $145,000 and $180,000 each.

“We knew there would have buyer interest, but we didn’t expect to sell them all quite that quickly,” he said.

“The signage didn’t even make it to site before they were sold.

“I can see New Norfolk becoming a new booming area.”

HOME VALUE INDEX MAY

Change in values per month, quarter, annual, plus median value

• Hobart 3.2% 7.7% 16.5% $574,543 
• Sydney 3.0% 9.3% 11.2% $970,355 
• Melbourne 1.8% 5.5% 5.0% $740,562 
• Brisbane 2.0% 6.2% 10.6% $574,572 
• Adelaide 1.9% 5.4% 11.8% $500,881 
• Perth 1.1% 3.8% 8.5% $521,688 
• Darwin 2.7% 7.9% 20.3% $478,072 
• Canberra 1.7% 6.5% 15.6% $746,573 
• Combined capitals 2.3% 7.1% 9.4% $715,100 
• Combined regional 2.0% 6.5% 15.2% $468,980 
• National 2.2% 7.0% 10.6% $634,355

Source: CoreLogic

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