The viability of the Hobart market is disputed by some, but others claim the southern-most Australian state is set for property success in 2018 with rising prices, a new report has found.
Detailed in the Hobart Property Hotspots 2nd Half 2017 report by PRDnationwide, the Hobart market is still considered to be affordable in comparison to other capital city markets.
“While other Australian major cities begin to reach and pass their price peaks, Hobart continues to provide an attractive [and] affordable option that is currently still in its upswing of positive capital growth,” said PRDnationwide chairman and managing director Tony Brasier.
“The market is a hotspot for many interstate investors, suggesting local first home buyers need to quickly stake their claim in the market.”
The burst in profitability, according to the report, is attributed to over $160.9 million worth of new development projects in the second half of 2017 – the bulk of which being commercial, resulting in job growth.
The report looks at three key suburbs for houses and units:
Glenorchy tops the list for both housing and units, offering affordable property located 10 kilometres away from Hobart’s CBD.
The report stated: “The suburb has continued its double-digit price growth over the last 12 months, with house median price increasing by 12.7 per cent.”
Low vacancy rates of 0.2 per cent and rental yields of 6.3 per cent mean that the rental market is thriving in the area.
It is also scheduled to meet demand with $1.3 million spent on infrastructure projects over the second half of 2017.
Located 7 kilometres away from Hobart’s CBD, PRDnationwide data indicated median sale prices have risen by 18.1 per cent over the last year to the third quarter of 2017.
While not as impressive as Glenorchy, Risdon Vale has a similar vacancy rate and rental return of 0.3 per cent and 6 per cent respectively.
Approximately $1.8 million will also be spent on new projects over the second half of 2017, which is said to sustain the area’s economic growth, according to PRDnationwide.
Over 2016, Rokeby experienced a growth rate of 28.1 per cent, and this area is set to see further growth.
Similar to the other two suburbs, Rokeby has a rental yield of 6 per cent, but a vacancy rate of 0 per cent, which means that the suburb is primed for renters.
This high level of demand is set to be supplemented with a expenditure of $570,000 on local projects by the local government, which is predicted by PRDnationwide to funnel back into the property market.
As mentioned previously, Glenorchy offers investors an opportunity into the market, whether it is houses or units. The median unit price in the area has seen increases of 5.5 per cent and rental yields of 6.8 per cent.
The PRDnationwide report mentions the suburb is a hotspot for government and retail jobs, and with the aforementioned $1.3 million invested into upcoming infrastructure, there is a constant stream of demand for housing.
Only showing up in the second half of 2017 as a unit hotspot, Howrah offers investors rental yields of 4.3 per cent and a vacancy rate of 0.2 per cent, a 10-year low.
The area is located close to Hobart’s CBD and offers a beach resort-styled lifestyle, sporting clubs and access to a large shopping area in Rosny Park. All of this combined with over $1 million spent on upcoming investments, Howrah is shaping up to be quite the newcomer.
Situated north of Hobart’s CBD, Lenah Valley can provide investors with scenic views of the city. Investors may have to pay a higher median price, but for those willing to pay more, a price growth rate of 8.4 per cent, yields of 5.1 per cent and vacancy rates of 0.8 per cent are on offer.
Further investment of $1.1 million worth of new projects will have taken place over the course of the second half of the year, which the report indicates will create a future spill over to the economy of Lenah Valley, which will then result in more residential stock.