Property prices are finally starting to grow in Hobart Tasmania

Photo Credit: Diana Parkhouse via Compfight cc

Photo Credit: Diana Parkhouse via Compfight cc

We often hear from people thinking of moving to Tasmania, that they are worried that house prices may not increase (making their asset more valuable) or when will it be the bottom of the market and time to buy?

Well we are pleased to report from the below article from The Mercury that house prices appear to be on the rise. Interest in Tasmania is increasing and now may be the right time to get in touch with us to find your perfect home.

Dwelling values in Hobart have increased by 1.4 per cent in the past month.

PROPERTY prices are finally starting to claw back in Hobart with the latest CoreLogic RP Data housing index revealing values increased by 1.4 per cent during the month of October.

It was the second highest level of price growth nationally, behind only Adelaide where dwelling values rose by 1.5 per cent.

The figures revealed dwelling values had now increased by 3.8 per cent in Hobart, compared with the same time last year.

The median house was now $341,000 and the median unit price at $275,000.

Hobart is the only capital city where house prices are lower than they were at the end of 2008 – by an average of about $1155.

But it was the best capital cities for rental yields, with investors getting strong returns for houses of 5.3 per cent. Even rental yields were strong for investors who owned units in Hobart, with a return of 5.3 per cent, equal to that of Brisbane.

CoreLogic RP Data head of research Tim Lawless said yields had been dropping in every capital city except Hobart.

“The relative affordability of the Hobart housing market, coupled with its lifestyle appeal and higher rental returns should help to revitalise Australia’s southernmost capital city housing market,” Mr Lawless said.

He said tough economic conditions across the state and an absence of population growth had resulted in limited housing demand in Hobart, however transaction numbers were up 1.2 per cent over the past year, suggesting buyers may slowly be returning to the market.

CoreLogic RP Data head of research Tim Lawless said investors were getting the strongest returns in Hobart.

During October the two powerhouse markets of Sydney and Melbourne received only slight increases of 0.3 per cent and 0.6 per cent.

Values went backwards in Darwin by 0.1 per cent and Brisbane by 0.2 per cent while the Perth market recorded a more substantial drop in the month of 2.8 per cent.

Mr Lawless said the slow down in price growth was driven by a few factors.

He said the recent bank driven rises in mortgage rates was only part of the picture.

“We are also seeing approximately a 30 per cent premium on investment related mortgage rates, tighter lending standards and borrowers generally requiring a larger deposit.’’

A further disincentive to investors was that gross rental yields had hit record lows of 3.4 per cent nationally and new housing supply was starting to move through at record levels.

Mr Lawless said fewer investors in the market lead to less competition for properties which meant prices softened.

“We are seeing a lot of disincentive now for investment, not just the higher cost of debt but also the very low cash returns and I think also the fact that I think a lot of investors are now starting to realise the pipeline of future capital growth may not be that high,’’ he said.

 

Dale and Jo.

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