HOUSING BUBBLE STARTS TO POP

HOBART’S housing boom is over, according to Real Estate Institute of Tasmania president Tony Collidge.

New data shows residential property prices grew 1.5 per cent in the September quarter, the slowest quarter since June 2016.

Mr Collidge said the heat had gone out of Hobart’s housing market but it was not the end of the world.

“I believe prices have peaked,” he said. But Mr Collidge added Hobart was not destined for the same dramatic downturn seen in other parts of Australia.

HOBART’S housing boom is over according to REIT president Tony Collidge, who says the city’s building shortage will ensure it will be a soft landing for the sector.

New Australian Bureau of Statistics home price figures show Hobart’s residential property prices grew by 1.5 per cent in the September quarter, the slowest quarter since June 2016 when Hobart recorded 0.7 per cent growth.

There were only 605 established houses sold in Hobart in the September quarter — the lowest on record with a median house price of $438,000, according to the ABS September 2018 Residential Property Price Indexes released yesterday.

Yearly, house prices rose by 13 per cent in Hobart, the best yearly growth of all the capital cities.

Mr Collidge said the heat had gone out of Hobart’s housing market but it was not the end of the world.

“I believe prices have peaked,” he said.

“In the September quarter, when REIT released its last report, that was the first quarter in four years where the market had gone backwards.

“I’m seeing properties take longer to sell and while the market will still be tight there is going to be a softening.”

But Mr Collidge said Hobart was not destined for the same dramatic downturn seen in other parts of Australia.

“I don’t expect drops of 10 per cent or anything,” he said.

“Our market place is 30 per cent investor orientated and 70 per cent owner-occupier.

“Sydney and Melbourne are facing a lot of issues because of their large investor market.”

Mr Collidge said Hobart was a small market and any increase in tourism, population and students would see a tightening of the housing sector.

“We can’t build houses quick enough to cater for the need,” he said.

Mr Collidge said the future looked bright with the 17th Australian Housing Outlook Report from QBE, released in October, forecasting Hobart’s median house price will rise to $520,000 by 2021, a growth of 7.9 per cent.

Median unit prices in Hobart are also forecast to reach $420,000 by June 2021, a cumulative rise of 9.3 per cent, the highest across all Australian capital cities and the only capital city where unit prices will outperform CPI.

“There will be a lot more opportunity in the market for buyers and sellers in 2019,” Mr Collidge said.