Demand for Hobart residential property higher than anywhere in Australia

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The yacht Wild Oats XI (C) sails behind other entrants Perpetual Loyal and Scallywag (R) on Sydney Harbour during the start of the annual Sydney to Hobart Yacht race, Australia's premiere bluewater classic, in Australia, December 26, 2016. Reuters/David Gray

A new report shows that renters in Hobart pay only $10 less weekly than they would be in Melbourne, with median house rents in Tasmania's capital reaching $420 weekly. Hobart has the strongest annual growth of all the capital cities, according to the Domain March quarter rental report.

The report also shows that Hobart recorded median house and unit rents at a record high. A separate report by the realestate.com.au website states that Hobart is the most in-demand capital city.

It is also described as home to half of the top 10 most sought-after Australian suburbs. The realestate.com.au Property Outlook report shows that demand in the southernmost capital is double that of Melbourne.

For Real Estate Institute of Australia’s Adrian Kelly, there was no doubt that Hobart was well and truly at the “top of the cycle at present.” Several people are trying to secure a property.

Domain data scientist Nicola Powell said Hobart saw a 15.1 percent year-on-year growth. She said it was the only capital city to see double-digit yearly growth.

Powell explained that there are several reasons for the growth, citing available rental stock levels becoming depleted.  Another factor that is putting pressure on the housing sector is Tasmania and Hobart being subject to surging population growth.

She thinks investors are swaying towards short-term leases instead of long-term leases. That puts pressure on the long-term leasing private rental market.

"Annually, unit rents in the Tasmanian capital have been on the uptick since December 2013, and median house rents are now only $10 behind Melbourne,” The ABC reported Powell as saying. Increasing the availability of affordable rental stock, she said, was the key to loosening Hobart's rental market.

She added that further rental growth depends on an increase in supply. Meanwhile, affordable housing proposals and recent building approvals offered by the Tasmanian government begin to take shape.

On realestate.com.au, Hobart listings averaged over 4,500 page views per property. Nerida Conisbee from Realestate.com.au said the combination of low levels of development and a changing economy had increased both renter and buyer demand.

"While the rest of Australia has had a development boom over the past five years, the level of development in Tasmania has remained fairly low," she said. Hobart remains to be the most affordable capital city with a median house price of $425,000. But it is beginning to get expensive and this will possibly remain to be the case in 2018.