$2.2m property prediction

High price for family home

A NEW report released today has made a bold Hobart property market prediction: a $2.2 million median price in 2043.

However, Real Estate Institute of Tasmania president Tony Collidge believes there is next to no chance that could actually happen.

Aussie Home Loans and CoreLogic’s 25 Years of Housing Trends report reveals Greater Hobart house values have risen by 6.5 per cent annually since 1993.

At the same rate of growth, Hobart’s median house value could rise from today’s $452,900 to reach $2.203 million in 2043, the report says.

The value of Greater Hobart apartments has grown at an annual rate of 5.5 per cent since 1993, which would put its 25-year forecasted median at $1.339 million.

Aussie chief executive James Symond said the report reveals that over the long term, residential property in Hobart has been a strong performer.

“I believe it will continue to perform well,” he said.

Mr Symond said the percentage of annual household income in Hobart required to service a loan had jumped from 18.6 per cent to 30.6 per cent since 2001.

Tasmania’s average loan size in 1993 was $55,400 and in 2018 it is $252,100, a 355.1 per cent change.

Mr Symond said with mortgage rates now close to their record low levels of the 1960s, loan serviceability levels have improved. The report also revealed Hobart’s top 20 suburbs for value growth in the past 25 years — led by North Hobart.

The suburb experienced extraordinary growth in median prices from $95,000 to $680,500, which was a 616.3 HOWRAH resident Ann Druett can hardly believe how high Greater Hobart house prices have grown.

Mrs Druett thinks Hobart’s sky-high home prices are “absolutely ridiculous”.

“I suppose people are paying these prices because they feel like they have to,” she said.

“Or if they don’t, will a similar house cost them even more next year?

“And how are young people supposed to afford to buy their first home now?”

Last year, the 82-year- per cent change — well above the national average of 412 per cent growth over 25 years.

Mr Collidge said it was unimaginable that Hobart might grow at such a rate to reach a median price in the millions of dollars. “If this guesstimate is right, the housing minister of old sold her family home, having lived there for 37 years. She moved just three minutes down the road to a smaller property that has “everything I need”.

When Mrs Druett bought her four-bedroom brick home in Howrah in the 1980s it cost $84,000, which she said was “a lot of money at the time”.

She sold it after 17 days on the market for $485,000 and said it may have sold for more had she gone to the expense of updating it before selling.

Mrs Druett said she spent a lot of time doing a thorough search of what was available to buy.

She inspected hundreds of properties before finding the right one.

In the ’80s, Mrs Druett remembers looking in Sandy Bay and comparing it to similar Eastern Shore properties. She said at that time there was a $10,000 premium for people that wanted a Sandy Bay address.

However, she knew in seconds that Howrah was her preferred choice.

“When we inspected the house that became our home we knew instantly that it just felt right,” she said. “I have wonderful memories having raised five children there.” the day could have a real issue because we all may need public housing,” he said.

Mr Collidge said there was a stark difference between Hobart’s current booming prices and those of the market’s previous high point.

He said Hobart prices near- ly trebled between 2000 and 2007 with growth of about 175 per cent.

“However, from January 2014 till now, house prices have increased by about 21 per cent,” he said. “I find it hard to believe that such rates of growth can or could continue.”