Hobart homes typically sell in 89 days,
Not long ago, Hobart was a hot property market, with investors and relocating mainlanders eager to snap up real estate on the Apple Isle.
In 2021, house prices surged by 28 per cent, and the average property sold in just 17 days.
However, recent data tells a different story. Average days on market in the state capital have ballooned to 89, up from 66 days a year ago. Additionally, overall listings are now 35 per cent higher than the five-year average, according to Domain data.
“Hobart is a small market, but this is quite significant,” said Domain’s chief of research and economics, Dr Nicola Powell. “Hobart has been experiencing weakness for a couple of years now.”
PRD Hobart sales agent Marnie Reed described the local market’s performance as “below baseline.”
“While the number of buyers is likely better than during the global financial crisis, it’s not a typical market,” she said.
“Being a micro economy, our market doesn’t always mirror the trends of the mainland. We can experience a boom even when the mainland is struggling.”
Hobart’s housing market contrasts sharply with other capital cities, which have mostly recovered from the late 2022 price drops.
In contrast, Hobart saw a 2.3 percent decline in house prices over the last financial year, according to Domain data.
Currently, the median house price in Hobart stands at $686,053, which is approximately 10 percent or $76,000 below the March 2022 peak.
Rents in Hobart have diverged from the national trend, with median house rents falling by $10 in the June quarter.
Consequently, Hobart is the only capital city where house rents are now below their record highs.
In contrast, unit rents have remained consistent and stable despite the changes in house rental prices.
Alongside inflation and high interest rates, the state’s slowing population growth is also impacting the local economy and housing market.
Last year, Tasmania’s population grew by just 0.4 percent, which is significantly below the national average.
In its recent population policy, the state government admitted that without effective planning, it faces a slowing economy and a shrinking workforce.
Dr. Nicola Powell noted, “The overall trend for net interstate migration has been negative, which drains the population and creates market weakness.”
However, it is important to note that the Hobart property market is not in free-fall.
According to Nina Schubert from Insitu Property, most of her listed properties are selling after only two open homes.
“The feedback from buyers is that there is a lot of poor-quality stock available, making it hard to find good properties,” she said.
In contrast, I ensure my properties are presented excellently by painting and replacing carpets, resulting in beautiful listings.
Schubert noted that inquiries have increased compared to 12 months ago, when buyers were impacted by successive interest rate hikes.
“I’ve observed a significant return of first-home buyers to the market,” she said. “The removal of stamp duty on properties up to $750,000 in Tasmania has really transformed the market.”
Additionally, investors are present but are primarily searching for bargains, Schubert added.
PRD’s Marnie Reed observed a rise in investor numbers recently. “About a year ago, investor inquiries were around 11 percent of our total,” she said.
“However, for some reason, we are now seeing an increase in investor interest,” she added.
“If people are astute or savvy, they might view this as an opportune moment to buy in Hobart before the next boom.”
She explained that current market conditions allow prospective buyers to
“take their time to make a decision.”
While Hobart homes typically sell in 89 days, buyers may not find an extraordinary bargain but can still take their time to think things over.
