Hobart home hopes at last with price trend set to slow down
HOME buyers in Hobart at last have a reprieve, with price rises set to slow over the next three years.
Hobart has outpaced every other state capital in growth in the past three years.
But it appears the trend is about to reverse, with the QBE Australian Housing Outlook report saying Hobart can expect the smallest increase in housing prices in the country over the next three years.
While sellers have enjoyed a massive boom, the market now looks likely to be boosted from the bottom up, as first-time buyers and low-income families look forward with greater confidence to moving up the property ladder.
The report predicts housing price growth of only 4.1 per cent by June 2022 — less than inflation.
QBE LMI chief executive Phil White said it was due to affordability constraints.
“House prices in Hobart have grown an impressive 10.6 per cent per annum in the three years to June 2018,” Mr White said.
“However, affordability constraints appear to have begun to weigh on price growth.
“Relative to local incomes, Hobart has become the third least affordable capital city behind Sydney and Melbourne.”
The median house price at June this year was $499,300, after a slowing in growth in 2018-2019. It is expected to be $520,000 in 2022.
Real Estate Institute of Tasmania president Tony Collidge said while most, if not all, other capital cities had seen a decrease in house prices in recent years, Hobart had been the
exception to the rule, with demand outstripping supply.
“Because of the lack of supply, we will continue to see slow price growth and I think the other states will see a more significant, robust increase,” Mr Collidge said.
However, he said there would continue to be a dwelling demand in Hobart, while tourism, population and students were on the rise.
The QBE report, which Mr Collidge described as consistently reliable, said in recent years the strong demand for dwellings had exceeded new supply.
The highest increase in growth was expected to be in 2020 at 2.1 per cent and was then forecast to stabilise to a 1 per cent increase each year in 2021 and 2022.