Hobart prices still lead the nation

HOBART’S annual home value growth has topped the nation for the second month on the trot.

The growth in the southern city was 14.3 per cent, a stronger result than Melbourne at 12.1 per cent and eclipsing Sydney at 10.5 per cent, CoreLogic RP Data’s September Home Value Index shows.

Hobart was also the strongest performing capital city with the largest upswing in monthly dwelling prices (houses and units combined) with 1.7 per cent growth in September, followed by Melbourne at 0.9 per cent and Canberra at 0.6 per cent. The median dwelling value for Hobart is also nearing $400,000.

CoreLogic head of research Cameron Kusher credited Hobart’s growth to interstate migration and affordability.

“It’s so much more affordable than the other capital cities,” Mr Krusher said.

“Businesses are now more open to people working remotely and a lot of people from Melbourne own properties in Tasmania and probably want to retire there.”

Real Estate Institute of Tasmania president Tony Collidge said the state market was “streets ahead” of everywhere else.

Mr Collidge, right, said the lack of supply in residential housing and rental vacancies, coupled with the level of interest in Tasmanian tourism and job growth, was a “perfect storm”.

“Prices are only going to go one way — they will continue to go up,” he said.

“Over the next two to three years, I think Hobart prices will increase significantly if something does not happen to change our current trajectory,” Mr Collidge said.

He said Hobart, Adelaide and Perth were sitting in a strong position for potential growth.

“For those that are trying but struggling to buy, it is not such a good position,” Mr Collidge said.

“However, a benefit that could come from this growth would be developers gaining confidence in our market, and perhaps Launceston, too.

“Where two years ago, they might have looked at us and thought there wasn’t enough potential for profit to make an investment risk worthwhile, now they may see a good return is possible.

“It could open doors and opportunities for Hobart.”

While Hobart’s percentage of growth over the past year has been excellent, Hobart remains the country’s most affordable capital city.

Mr Kusher said the Hobart market “has got a bit more to run” because it was so much more affordable than Adelaide.

The CoreLogic report revealed a median dwelling value for Hobart of $391,618, which was about $38,000 cheaper than Adelaide and about $54,000 less than Darwin.

Hobart dwellings are about $150,000 more affordable than the national median.

Mr Collidge said it was “onward and upward” for the Hobart market.

“It looks as though this quarter could be even bigger than our last quarter,” he said.