‘42 forecast hits $2.9m

HOBART’S most affordable suburbs could have price tags that look more like Sandy Bay if values increase at the same rate that they have for the past two decades. In the new Real Estate Institute of Australia report “Real Estate Market Facts: A 20-year report 2002-2022”, one of the big takeaways was that Hobart had experienced the largest percentage of house price growth in the nation at an eye-watering 269 per cent.

Experts say past performance is no guarantee of future performance. There are just too many factors that are impossible to predict. Any number of events, big and small, could impact property price growth.

The Global Financial Crisis of 2007-08, for example, pushed Hobart home values down so far it took years in some suburbs to get back to where they were. But Covid was the opposite, with prices soaring skyhigh.

Inflation and rising interest rates have dampened price growth this year, but the cash rate is still fairly low compared to historic highs.

But what if the RBA pushed it up to 2008 levels and over 7 per cent — how would the market react?

Forecasting forward 20 years is impossible to do accurately. But let’s see where it would end up.

A 269 per cent climb would take Hobart’s typical home from $790,000 right now to a whopping $2.9151m.

PropTrack figures show Gagebrook is Hobart’s most affordable suburb at $371,500. With 269 per cent growth, that would increase to $1.370835m. Pretty close to the median in Tranmere today.

In New Norfolk, $430,000 now would become $1.5867m; $460,552 in Clarendon Vale would be $1.699436m; and Risdon Vale’s $475,000 median would zoom to $1.75275m.

At the top end of town, this type of growth would produce unimaginable prices.

Battery Point’s current median house price is $1.5205m. With 269 per cent growth it would peak at … wait for it … $5.610645m. And that would not be the suburb’s top price, merely the property in the middle of a year worth of huge imagined future sales.

In Acton Park this level of growth would shift prices from $1.31m up to $4.8339m, and in Sandford it would climb from $1.18m to $4.3542m.