Derwent Valley Property Market Update 2nd Half of 2022
In Q2 2022, Derwent Valley recorded a median house price of $485,000 and a median land price of $265,000. This represents annual (Q2 2021 – Q2 2022) median price growth of 11.8% for houses and 46.8% for vacant land. Total sales declined between Q2 2021 – Q2 2022, by -11.9% (to 37 sales) for houses and by -33.3% (to 8 sales) for land. Strong demand has absorbed new listings, creating an undersupplied market. Now is an ideal time for owners and down-sizers to capitalise on higher returns for investment. The current imbalance in demand and supply can provide a buffer against cash rate hikes.
Average vendor discounts between Q2 2021 and Q2 2022 continue to record a premium, however at a lower level of 6.3% for houses and 3.1% for land. Market conditions continue to favour vendors, as buyers are still willing to offer above the initial listing price. But this is at a lower level than 12 months ago, which suggests there are now more opportunities for buyers.
In June 2022, house rental yields in New Norfolk were recorded at 3.8%, which is higher than Hobart Metro (3.6%). In the 12 months to Q2 2022 the median house rental price increased by 4.5% (to $460 per week) and average days on market went down by -5.3%. Furthermore, demand for house rental increased by 35.2% in the 12 months to Q2 2022, which suggests the renters are willing to pay more even without an undersupply in the market. This presents a beneficial market for investors.
4+ bedroom houses have provided investors with +9.6% rental growth annually, achieving a median rent of $800 per week.
New Norfolk recorded a vacancy rate of 0.5% in June 2022, which is slightly above Derwent Valley LGA (0.3%) and Hobart Metro (0.6%). Vacancy rates in New Norfolk remain well below the Real Estate Institute of Australia’s healthy benchmark of 3.0%, and trended below 0.5% in the past 3 years, even amidst COVID-19 conditions. This confirms there is still a healthy rental demand and investors can be confident of a conducive investment environment in New Norfolk.
