Low supply fuels Hobart’s sky-high home price growth

There is ample housing supply for sale in every capital city CBD except for Hobart where home values are rising and rentals are scarce, new research shows.

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TASMANIA’S major centres are “superior” to most of the nation and should be on the investor radar, says a leading property market expert.

In new research released today, Propertyology found there has been a 50 per cent increase in house prices alongside a dramatic drop off in the number of properties for sale.

Propertyology head of research Simon Pressley said over the last five years there had been am enormous reduction in housing supply in Burnie (74 per cent less) and Launceston (65 per cent less). Along with solid economic fundamentals, this has played a significant role in the increase in house prices.

Hobart stock levels are at the lowest on record, says Propertyology’s Simon Pressley.

“The 246,000 residents of Hobart only have 1595 dwellings listed for sale today, the lowest on record,” he said.

“A 61 per cent reduction in resale supply since the beginning of the property market growth cycle seven years ago has seen Hobart real estate values double.

“Hobart was nation’s strongest performer over that period.”

Meanwhile, the latest SQM Research figures show Hobart’s rental vacancy rate has tightened in June with the rate hitting 0.4 per cent and 140 vacancies. In June 2020 there were 272.

At 0.4 per cent, Hobart has the tightest rental market in Australia alongside Darwin. Canberra, Adelaide and Perth also have vacancy rates below 1 per cent.

The national residential rental vacancy rate fell to 1.7 per cent over the month of June 2021 … this represents the lowest vacancy rate since May 2011, the report said.

Nationwide, Propertyology’s research found that there was ample housing supply for sale in each of the capital city CBDs except for Hobart, which does not allow high density apartment development.

Mr Pressley said a big part of Tassie’s appeal was its “low density charm”.

“Personally, I’d hate to see that disappear but, realistically, city councils do need to be a little more flexible by permitting a small number to medium-low density mixed use projects,” he said.

“For property investors, the fundamentals of Hobart, Launceston, Burnie and Devonport are superior to most locations in Australia.

“Tassie still holds the mantle of the best-performed economy, housing supply is tight and rental demand is huge.

“The psychological impact that Covid has had on some people has increased demand for lifestyle and reduced congestion, that will benefit locations like Tasmania.”

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Originally published as Low supply fuels Hobart’s sky-high home price growth