Hobart counters property slow-up

AUSTRALIA’ S property market is slowing but nine out of 10 homes are still selling for a profit, with capital cities delivering the best returns.

However, Hobart houses have turned a market decline on its head in the past 12 months and is leading the nation with double-digit rises.

A recent Corelogic report found 91 per cent of properties sold in the last three months of 2017 turned a profit or made break-even for the seller, with capital cities offering better chances of a profit that regional centres.

The end of the mining boom continues to hurt parts of the country, with losses on property resales heaviest in those regions linked to resource industries.

Around Australia, more houses than units continued to be resold at a profit.

Housing Industry of Australia senior economist Shane Garrett said that of Sydney homes sold at a loss the average hold time was 3.6 years, against nine years for houses that sold for a profit.

“Property is not the stockmarket... the longer you hold, the safer it is,” he said.

While house prices in Sydney have fallen slightly, Mr Garrett said the uplift since 2012 is still massive in comparison.

According to HIA figures Sydney home values have pulled back two per cent on last year.

“The majority of homes in Sydney continue to be worth more than what the buyer paid for them.” Mr Garrett said.

Sydney and Melbourne alone still accounted for more than 60 per cent of total resale profits in the December quarter, according to the Corelogic Pain and Gain report released on March 20.

But Mr Garrett said the national property market is set for a rebalance.

“Sydney simply doesn’t have massive potential for growth for the time being and Melbourne also has little potential for massive growth,” Mr Garrett said.

“Cities that are lowest in dollar terms and lowest to the typical salary tend to have the biggest potential for price growth now.”

Hobart prices have risen by 13 per cent in the last 12 months but three years ago prices were falling, he said.

“That’s happening in Hobart now and I wouldn’t be surprised if it happens in Perth and Darwin over the next two to three years,” Mr Garrett said. AAP