Hobart the hottest market in Australia

Hobart the hottest market in Australia
Hobart the hottest market in Australia

By some measures, Hobart is the hottest market in Australia. In terms of typical days on market for houses to sell, the fastest-selling suburbs in Australia are now found in Hobart.

The latest survey of sales activity by Hotspotting confirms that impression: relative to its size, Hobart has more growth markets than any other capital city in Australia. Agents we trust tell us they’re selling homes as fast as they can list them.

Other sectors of the Tasmanian market are busy also, led by Launceston and some of the towns in the state’s north.

Sales activity in the state has been rising steadily over the past three years. In 2016 and early 2017, every quarter has achieved higher house sales than the equivalent period a year earlier, a pattern that’s been evident now for the past three years.

For example, if we compare the past three September quarters, sales have increased from 2,300 (2014) to 2,580 (2015) to 2,832 (2016). Sales in consecutive December quarters have climbed from 2,515 to 2,718 to 3,017.

For those and other reasons, Hotspotting has been forecasting the advance of real estate markets in Tasmania for the past two years.

Real estate in Hobart, and Tasmania generally, has risen on the back of greatly improved economic performance and elevated infrastructure spending. In the State of the States report by CommSec, Tasmania’s national ranking has recently risen from 7th to 4th - putting it ahead of Queensland, WA, SA and the Northern Territory.

This is reflected in the increasing number of busy suburbs in Hobart. Our latest survey reveals that the number of suburbs with rising markets has more than doubled in the last six months.

Affordability is a big driver in this market. There is a rising influence of investor buyers in the market, attracted by the status of Hobart as the cheapest capital city market in Australia (as well as the city with the lowest vacancies and highest rental yields).

With affordability a core attraction, it’s the cheaper areas of the Hobart metropolitan area that are doing the best (although all sectors are busy).

The Glenorchy LGA has five growth suburbs (Berriedale, Claremont, Glenorchy, West Moonah and Austins Ferry), while the Clarence LGA has four  (Geilston Bay, Rokeby, Warrane and Bellerive). To put that in context, the median house price for both Warrane and Claremont is $265,000, while Rokeby is $215,000 and Glenorchy is $275,000.

Glenorchy (the suburb) is typical of the growth markets - sales levels have been 47, 49, 55, 67, 70, 85, 80 and 91 in the past eight quarters. In Kingston in the Kingborough LGA in Hobart’s south, sales levels have been 50, 61, 65, 68, 71, 79, 70 and 82 in consecutive quarters.

Rising sales activity is now translating into good price growth. The latest figures from the SQM Research Asking Prices Index has Hobart houses up 14% and units up almost 17% in annual terms. Meanwhile, asking rents have risen 7% on average for houses and 13% for units.

But it’s not just a Hobart story; other centres, notably Launceston and Devonport, are doing well also.

In Launceston, house sales in consecutive quarters throughout 2016 were 422, 465, 470 and 480 - a rising pattern which has continued in 2017. The number of growth suburbs in the Launceston area, covering the Launceston and West Tamar LGAs, has risen strongly in recent surveys.

South Launceston typifies the growth in this market. Its sales levels have grown from 20 to 29 to 34 to 46 to 52 in the past five consecutive quarters, a pattern highly likely to deliver growth in property values.

In the north, the Wynyard, Devonport, Shearwater and Somerset markets are all rising.

So while there’s growing evidence that the headline markets like Sydney and Melbourne are fading, Hobart is still quite early in its up cycle and is likely to continue growing for some time.

Terry Ryder is the founder of hotspotting.com.au. You can email him or follow him on Twitter.

Terry Ryder

Terry Ryder

Terry Ryder is the founder of hotspotting.com.au.

Tags: 
Hobart Residental Market

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