Home values buoyant against slower value growth

Price growth has slowed in Hobart while regional markets outperform the city, a report has revealed.

Upward pressure on home prices in Hobart eased in March. Picture: Supplied

THE unending upward trajectory of Hobart home prices has finally taken the foot off the gas — if only a little.

In its first Home Price Index report, released Friday, REA Group’s data business PropTrack revealed that price growth slowed in Hobart in March.

While the research found that Hobart’s annual percentage of growth remained strong at 23.85 per cent, March only contributed a 0.19 per cent uptick in values.

Report author and PropTrack economist, Paul Ryan, said this was the slowest rate of growth since the pandemic lockdowns of early 2020.

He said while price increases have slowed, this is in comparison to an exceptional period of growth where 2021 recorded the fastest increases in many decades.

“Prices are still growing but at a slower rate, partly because prices have caught up to lower borrowing costs,” Mr Ryan said.

“We have started to see interest rates increase. Mortgage rates have risen for fixed rate loans and I think people are incorporating expectations of rate rises by the RBA later in the year into their plans.

“It is prudent for people to take this into account when bidding or making an offer on a home as it may be the case that interest rates are markedly higher 12 months from now.”

Hobart’s median value is $657,000, the report said.

The median for houses is $705,000 and units $534,000. Unit values have grown by almost 17 per cent annually.

Launceston is a market leader in the regional property sector. Picture: Luke Bowden

Meanwhile, regional Tasmania’s growth has outperformed the city.

Its median is now $475,000 with 24.09 per cent annual growth and a 0.3 per cent monthly median price change.

The regional house median was a stich under $500,000 with over 25 per cent annual growth alongside an 11.27 per cent uptick for units and a $368,000 median.

At a SA4 level across the state, Launceston and the North East region recorded the highest annual growth at 26.33 per cent, followed by Hobart, the West and North West region and the South East, which ranged from 23.85-20.91 per cent.

Mr Ryan said in March every regional area in the nation outperformed its capital city.

“The trend toward lifestyle locations and larger homes has clearly benefited regional areas,” he said.

“Given how tight rental markets are in regional areas, it would not be a surprise to see investors take an active look at properties in these locations.”

Across the nation, three capital cities recorded price reductions in March — Melbourne, Perth, Darwin — while Adelaide posted the largest monthly increase of 0.84 per cent.

PropTrack’s monthly Home Price Index methodology combines sales and hedonic regression to estimate change in home prices in a way that is not affected by the quality and location of the unique homes that are transacted.

Mr Ryan said a difference between this report’s median price and those found in sales-focused reports, is the PropTrack data looks at all homes, not just those that have transacted.

More information about this report can be found at this link.