The property market in Tasmania looks eerily familiar…
I wanted to have a look at what’s going on across the Tasman today. It’s current property boom and emerging housing crisis is a microcosm of the factors that are driving property markets across the country.
First, according to CoreLogic, Tassie has experienced by far the sharpest rental growth over the past year:
Compare rental growth in Hobart to the national average, and Hobart is tearing away:
As usual, higher rents are being driven by low vacancy rates and a tight rental market. Vacancy rates are hovering around 0.5% – which is about as tight as it gets.
And of course when rents rise, house prices go up, since rents are the return on the property asset, and asset returns and prices are always linked.
Over the past twelve months, prices in Hobart grew 3.9%. Only Sydney and Melbourne did better, but they were bouncing back from a consolidation and that was always to be expected.
But, it looks like the Tassie boom is only getting started. Experts predict population growth will continue to outstrip supply. This dynamic – call it a housing shortage if you like – is the most consistent and predictable driver of property prices across the country, and now it’s Tasmania’s turn.
Property prices are set to keep rising in Hobart, experts say, offering no relief from the affordability crisis facing Australia’s southernmost capital city, after rapid rises in recent years.
Locals report a continued influx of mainlanders moving to the Tasmanian capital…
The city’s median house price, at $482,960 last quarter, jumped 35 per cent over the three years to September, Domain data shows. Meanwhile, unit prices increased more than 50 per cent to $395,715.
Hobart became the fourth most expensive apartment market in 2019… This is a stark contrast to two years ago when it was the most affordable…
[Independent economist Saul Eslake] noted upward price movements had been driven by a significant turnaround in population growth — with more people migrating south and fewer locals leaving — increasing demand for homes…
Rob Henry of Harcourts Hobart has seen an influx of mainland buyers in recent times as east coast housing prices have jumped…
The undersupply of housing has put a squeeze on Hobart’s rental market, the most rapidly rising of all the capital cities – with rents increasing 9.8 per cent for houses and 12.9 per cent for units over the year to September.
Hobart also has the lowest vacancy rate, sitting at 0.6 per cent in December compared to the national rate of 2.4 per cent.
“Vacancy rates are very, very low, you don’t get one or two people applying for a rental, you get 10 to 15 people wanting to put in rental applications,” Mr Henry said.
Of course, where there’s a boom in prices, and demand outstrips supply, you have a housing crisis, as there just isn’t enough houses to go around.
Thousands of Tasmanians have been left languishing on the state’s growing housing waiting list, new figures reveal, with the list now higher than at any point in the past year…
New figures released by the Department of Communities reveal that… thousands of Tasmanians remain on a housing waiting list that is getting longer.
The number of Tasmanians waiting for public housing rose in the September quarter to 3,444 — higher than at any point in the previous 12 months…
Labor’s housing spokeswoman Alison Standen said the waiting list was evidence of a deepening housing crisis in Tasmania.
“People in Tasmania tonight are concerned about where they’re going to get a roof over their heads. This means that very many vulnerable Tasmanians are struggling to find a home,” she said.
“Clearly this is a crisis in housing that is getting worse and worse.”
I expect this is right. A vacancy rate of 0.6% is pretty much ridiculous. That’s a full-blown housing shortage.
And with prices still well-below the main-land capitals, you’d have to think there’s still plenty of upside.
And the drivers are there – the same drivers that have delivered massive price gains across Australia for years.
People just don’t seem to get it. If there are more people than houses, then prices go up.
Tasmania is proof of the pudding.