Hobart housing price growth is unlikely to be as strong as it has been: BIS Oxford Economics

Hobart housing price growth is unlikely to be as strong as it has been: BIS Oxford Economics
Hobart housing price growth is unlikely to be as strong as it has been: BIS Oxford Economics

Many factors have driven this upturn, culminating in growth totaling 35 per cent in a period of 3 years.

Resulting in the estimated median house price of $485,000 at June 2018, according to a report released this week by BIS Oxford Economics.

Population growth has accelerated as net interstate migration outflows became net inflows, with Hobart gaining the lion’s share of this reversal the economists found.

Vacancy rates are tight and were at a of low 1.4 per cent at December 2017.

Economic conditions have also strengthened, with the lower dollar in this period driving strong growth in export sectors such as tourism and agriculture.

“In previous periods of net interstate migration inflows, the population movement has come from the demographic of people over 50 looking to downsize and experience a ‘tree change’,” noted Angie Zigomanis head of BIS Oxford Economics' residential research unit.

“However, the current migration inflows largely comprise younger adults and families with children, suggesting people moving for Hobart’s affordability or expats coming back to raise a family.”

With Hobart still having lowest median house price of the state capitals, this suggests that prices remain affordable, although price growth is unlikely to be as strong as it has been, suggests this report.

This report forecasts that, the median house price in Hobart will rise by five per cent in 2018/19, although it will slow in subsequent years as rising supply begins to take some of the pressure off prices.

Total growth of eight per cent is forecast in the three yeas to June 2021, with a similar rise forecast for units given the overall tightness in the market.

This equates to flat prices in real terms, i.e. factoring inflation.

For a look at our take on the BIS Oxford Economics report for the national market check out, "Melbourne house prices forecast to tread water through to 2020/21".

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