{"id":14167,"date":"2017-10-04T01:00:41","date_gmt":"2017-10-03T14:00:41","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=14167"},"modified":"2017-10-04T01:00:41","modified_gmt":"2017-10-03T14:00:41","slug":"a-boom-bigger-than-sydney-beckons-for-this-city","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/a-boom-bigger-than-sydney-beckons-for-this-city\/","title":{"rendered":"A boom bigger than Sydney beckons for this city!"},"content":{"rendered":"

Hobart\u2019s growth cycle today is comparable to where Sydney was in 2014. All of the metrics which Propertyology analyse suggest that, all things being equal, the 15 per cent price growth from the last 12 months will be surpassed next year and that there\u2019s currently no end in sight.
\nThere\u2019s potential for Hobart property prices to grow by in excess of 20 per cent this calendar year and next year. This would be well above the best years produced by both Sydney and Melbourne during their boom.
\nSydney\u2019s property market is clearly cooling \u2013 parts of Sydney has recently seen auction clearance rates below 50 per cent which, in the past, has resulted in declining values. We feel that Melbourne\u2019s cycle is about 6 months behind Sydney and that it will increasingly cool as 2018 unfolds.
\nHobart\u2019s growth cycle didn\u2019t commence until 2016. Both Domain and Core Logic have recently confirmed that Hobart\u2019s change in median house price over the last 12 months ending July 2017 was officially higher than every other capital city.
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\nAffordability and the significant improvement in Tasmania\u2019s economy are driving housing demand while supply is incredibly tight. 0.4 per cent vacancy rates in August 2017 has been confirmed by SQM Research as the lowest for any capital city since they began keeping record back in 2005.
\nThere\u2019s no such thing as an empty property in Hobart right now. If a tenant of a property indicates that they are not renewing their lease at the end of the term the property manager will have a long list of waiting applicants. Property investors are in an enviable position wherein current yields are probably already covering all of their costs and rental income is now destined to shoot higher.
\nMost Australians don\u2019t realise that Hobart\u2019s increase in job volumes over the last 12 months<\/a> is 4 times the national average and more than double that of the next best capital city. Tasmania is building an international reputation for world-class agriculture, unique tourism experiences, and advanced manufacturing. Hobart is also a university city. The economy is firing up.
\nThe list records which Hobart has achieved over the last couple of years is impressive. Employment growth, retail spending, interstate migration, job advertisements, domestic and international visitor numbers, vacancy rates, and Australia\u2019s strongest property market, the list keeps growing.
\nPropertyology\u2019s decision to invest in Hobart a few years ago was after correctly anticipating the resurgence of Tasmania\u2019s economy.
\nThe transformation has already been remarkable and we feel that few people appreciate that even more exciting times are ahead. The pipeline of infrastructure and major job-creating projects is diverse and extensive.
\nBig international brands like Hyatt, Marriott, Fragrance Group and others are expected to commence work on several new luxury hotels over the next year or two. There are plans to extend the Hobart airport runway to accommodate direct flights from Asia, which has already produced record volumes of visitors from business delegates and tourists to Tasmania.
\nThe state\u2019s biggest tourist attraction, Museum of Old and New Art (MONA), has plans for jaw-dropping expansions that include a luxury hotel wing that hangs over the Derwent River and a high-roller casino.
\nSubmissions have been sought for a multi-billion dollar proposal to redevelopment waterfront land in Hobart\u2019s heart, Macquarie Point, in to an iconic cultural precinct that will draw people from all over the world for a truly unique experience.
\nOther major job ceating projects include a $700 million upgrade of the state\u2019s biggest hospital, a new university, and a $400 million technology hub in the CBD with facilities for up to 3,000 students.
\nGreater-Hobart\u2019s population growth rate of 0.9 per cent in 2016 was higher than New South Wales\u2019 Central Coast and Adelaide.
\nHousing demand in Australia\u2019s most affordable capital city is largely driven by local confidence from the rapid job improvement. Now that the capital growth is there for all to see, mainland investors are appreciating that Australia\u2019s highest rental yields mean that the cost to hold a property in Hobart is effectively nothing.
\nWe believe that rental pressure will intensifying even further. Whereas big cities like Sydney, Melbourne and Brisbane are now seeing record volumes of new supply hitting the market, the building approval volumes in Hobart suggest that the supply pipeline will remain lean for some years yet.
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\nWith a median house price that is approximately one third of Sydney\u2019s, Hobart is a considerably less risky bricks-and-mortar proposition.<\/p>\n

\u201cHobart is the only location in Australia which has the combination of an affordable entry price, an economy which is already strong (and still improving), hardly any impact on investor\u2019s annual cash flow, and a tight supply pipeline for as far as the eye can see,\u201d<\/em><\/strong><\/p>\n

[Propertyology Head of Market Research, Simon Pressley]<\/em><\/strong><\/p>\n

The 15 per cent headline capital growth rate over the last 12 months is dragged down by the lower rates of growth in Hobart\u2019s urban fringe. Our clients have already seen as much as 35 per cent price growth over the last few years. With rates of supply tighter than anything we\u2019ve seen, it\u2019s quite conceivable that property prices in metropolitan Hobart could exceed 20 per cent next year and beyond.
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\nHobart Market Fundamentals<\/u><\/strong><\/p>\n