OTHER STATES AND TERRITORIES
Tasmania and the ACT have provided the leading capital city markets in the past 12-18 months. Hobart and Canberra have had the lowest vacancy rates and have led on rental growth, with Hobart also the outstanding city on house price growth, a status it has maintained for the past two years.
The two cities continue to stand out as tight markets with good demand.
Hobart has passed the peak of the current cycle and it was noteworthy that while it continued to lead capital city Australia on price growth in 2019, the rate of increases moderated somewhat.
The opportunity in Hobart is to build new dwellings in a city where vacancies hover around 0.5% and rents are growing at the fastest rate in the nation.
Regional Tasmania has also recorded prolific price growth in the past two years and the state’s second city, Launceston, has attracted interest from the mainland, from both investors and home buyers. Like Hobart, these regional markets have mostly passed their peaks, but will carry some growth momentum into the new year.
Canberra is an underrated and often overlooked market that is underpinned by one of the nation’s strongest state/territory economies, the highest incomes and the lowest unemployment. Vacancies hover around 1% and rents continue to grow steadily. There’s always consistent demand in the Canberra market and price growth will be solid in 2020. The overriding characteristic of Canberra is that it’s always steady – it seldom booms and it never busts.
Markets just over the NSW border around Queanbeyan offer an attractive alternative 15 minutes from central Canberra.
Elsewhere, the Northern Territory has been the basket case of the national economy in recent years and is finding it difficult to generate recovery drivers.
The Darwin market had its last price peak in 2014 and has had five years of significant decline since then, with $100,000 wiped off the value of the typical house.
There were tentative recovery signs late in 2019, with vacancy rates trending in the right direction and indications that price decline is coming to a halt. Sales activity has picked up, with first home buyers taking advantage of low prices, government assistance and cheap finance.