House hunters remain keen on Hobart property

Is slower price growth in the Hobart property market the news that first home buyers have been waiting for?

realestate.com.au chief economist Nerida Conisbee says while Hobart’s home prices continue to rise, the city remains the highest viewed property market per listing in Australia on realestate.com.au.

HOBART’S record-breaking housing growth is likely to become a victim of its own success.

Booming prices have reduced affordability and that is likely to lead to slower growth, says realestate.com.au chief economist Nerida Conisbee.

She says the economy in Hobart is “taking off” without adequate new supply of housing — and very little in the pipeline.

“Finding a bargain in Hobart is no longer possible,” she said.

Ms Conisbee said the city had been left with a rental crisis and an affordability problem.

“Hobart’s economic growth is now likely to be tempered by its housing problem and slowed by lower levels of affordability.

“For those living in Hobart, however, a slowdown in price growth is good news, particularly for first home buyers who have been struggling to get into the market.”

Interest has continued to be strong however, with Hobart home listings attracting more views than any other property market in Australia.

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In its April quarter Property Outlook report, realestate.com.au data shows house listings in Hobart, Bellerive and Battery Point were viewed more than those in any other suburb. In the unit market, it was Sandy Bay, Hobart and New Town that generated the most buzz.

Ms Conisbee said Hobart’s prolonged price boom had been blamed on “speculation”, but Real Estate Institute of Australia president Adrian Kelly said he was not sure that this was the case.

He said price increases had occurred due to relative affordability, population growth including ex-pats moving back home, an improved economy — especially in the tourism sector — and generally higher optimism all around.

“However, there is always room for improvement, particularly in the affordable housing and rental sectors,” he said.

“And don’t even get me started on what proposed taxation changes would do to our relatively small economy in terms of affordable housing.”

Mr Kelly said price growth or a market softening were not the only challenges that first time buyers were facing.

“They have to save for a deposit, pay State Government stamp duty and in most cases pay for some mortgage insurance,” he said.

Ms Conisbee said the April quarter data had revealed Launceston was benefiting from the growth of the state economy and a City Deal, which has led to greater levels of Federal Government investment in the city.

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