Hobart - Affordable & Liveable Property Guide 1st Half 2018
Affordable Suburbs - Hobart
The city of Hobart’s median property prices increased by 10.6% for houses and 7.2% for units between 2016 to 2017/2018. At the same time, sales transactions increased by 30.7% (houses) and 54.0% (units), which signifies exceptional demand is driving the market rather than scarcity of stock. Current evidence signals that double digit price growth will further continue into 2018, resulting in Hobart being Australia’s top achieving capital city. The highest level of growth is anticipated later into 2018, which will level out to single digits over 2019/2020. With the current activity in Hobart’s property market, there is unlikely to be relief from rising prices. Those looking for more affordable options need to look at the northern area of Hobart.
Table 1. Hobart’s
top performing suburbs in the 1st half of 2018
Housing affordability in Tasmania has declined over the past 12 months to the December 2017 quarter^. Proportion of income to meet home loan repayments increased by 25.7% and the number of first home buyers only increased by 4.0%, which is lower than other states. Table 2 provides the percentage of suburbs that are available for house buyers.Table 2. Accessible suburbs by price range
Liveable Suburbs - Hobart
2018 sees liveability added as a new criterion included in our methodology. This ensures that not only does our report highlight affordable suburbs but also those that have high liveability factors. This provides us with insight to the ‘cost of liveability’ and how much home buyers need to be prepared to pay. It also serves as a warning to local and state governments on the rising costs of liveability. It also provides focus areas for further development to create a balanced opportunity for residents, regardless of their income bracket.
Highly affordable suburbs (those with a maximum property sale price of the average state loan plus 40% deposit) exist. There were 8 suburbs that fell within our affordable category, including: Rokeby, Goodwood, Risdon Vale and Montrose.
However, these suburbs fail to meet the liveability criteria set. To meet this 72% (houses) and 40% (units) needed to be added to the average state loan. Thus, the average cost of liveability (based on average percentage difference of premiums added to average state loan) in Hobart is 16%. This is almost on par with Sydney (18%) and higher than Melbourne (10%) and Brisbane (5%).
Affordable & Liveable Suburbs - Hobart
Considering a combination of key property criteria such as: property trends, investment potential, affordability, project development and liveability factors; the tables below show the suburbs that should be on every property watchers list.
Table 3. Affordable and liveable suburbs - Houses
Table 4. Affordable and liveable suburbs - Units
Hobart’s rental market proves to be in high demand, demonstrated by median rental prices of $380 for houses and $320 for units, and low vacancy rates of 1.4% even though there has been an increase in median sales prices. There has been an increase of 5.6% (houses) and 3.2% (units) in median rent over the past 12 months to December 2017. Currently, rental yields are amongst the strongest in the Australian market which provides attractive, low risk options for investors seeking opportunities beyond the Sydney and Melbourne property markets. Now is the time to enter the lucrative Hobart property market before this investment hotbed moves beyond the reaches of affordability.
Over $318.2M of commercial, industrial, infrastructure, mixed use and residential projects are planned in the 1st half of 2018, underlining Hobart’s sustainable economic growth and enhanced liveability. This will result in conducive conditions for a vibrant property market in the future. The main mixed-use project is the Montpelier Salamanca Residential. This will add 116 units to the market. In total 112 units, 36 townhouses, 76 houses, and 198 residential lots will be added in the 1st half of 2018.
This guide analyses all suburbs within the greater Hobart area. The suburbs chosen as the most affordable and liveable hotspots are within a 10km radius of the CBD. In selecting hotspots, the below factors and methodology were considered:
Property trends - suburbs will have a minimum of 20 transactions for statistical reliability purposes, with positive price growth over the past 15 months (2016 to Q1 2018*).
Investment - suburbs will have on-par or higher rental yield than Hobart Metro, as well as on-par or lower vacancy rates (as of December 2017).
Affordability and liveability - suburbs will have a median price below the maximum affordable property sale price, based on the average state loan. In this report 72% for houses and 40% for units were added to the average Tasmanian home loan, which was $266,839 as at December 2017^^. Key liveability factors included ensuring the suburbs have a low crime rate, availability of amenities were within a 5km radius (i.e. schools, parks, shopping centres, and health care facilities), and an unemployment rate that is on par or lower in comparison to the state average (as determined by the ABS Census 2016).
Project development - suburbs will have a high total estimated value of future project development for the 1st half of 2018**. This ensures sustainable economic growth, having a positive effect on to the property market.