CITY PRICE BOOM

HOBART’S fiery home values have surpassed the annual growth of every other capital city.

CoreLogic RP Data’s August Home Value Index has revealed positive growth of 13.6 per cent for Hobart dwellings (houses and units), ahead of Sydney at 13 per cent and Melbourne at 12.7.

It is the first time Hobart has led the nation in this category since Tasmania’s property boom of 2003-04.

Hobart recorded the best quarterly change in values, equal with Melbourne at 1.9 per cent, the report said.

CoreLogic’s head of research, Cameron Kusher, said a number of factors created this upward momentum.

He said Hobart was more affordable than other capital cities, the economy was starting to improve, Hobart seeing more interstate migration and tourism was booming, which helped to drive housing demand.

“People in Sydney and Melbourne have a lot of equity in their properties and Tassie, being a lot cheaper, could be attractive to those buyers,” he said. “Workplaces are becoming flexible with when people are needed in the office or able to work remotely. Melbourne to Hobart is just one hour by plane.”

Real Estate Institute of Tasmania president Tony Collidge said with Tasmania’s residential market performing well, the rest of the country had become “much more aware” of what was happening in Tasmania.

“We are being observed with great interest,” he said.

“Of concern is the inability of our market to meet the demands placed on it, which has resulted in increasing rents and dwelling prices.

“I do not see prices easing for some time yet.”

Mr Collidge said residential price increases occurred because the number of properties available for sale in southern Tasmania was down by as much as 60 per cent in some areas — the lowest levels in over a decade.

Rental vacancies are also historically low.

Mr Kusher agreed that scarcity was affecting prices and driving demand.

“There is not a lot of new construction happening, combined with about 30 per cent less Greater Hobart properties available for sale compared to the stock level of a year ago,” he said.

Mr Kusher expects Hobart’s momentum to continue.

He said there were signs Sydney was starting to slow, but Hobart could see more acceleration from where prices are now compared with the end of 2017.

While Hobart house prices are growing, it is still the most affordable capital city.