Hobart Property Market Update 2nd Half of 2020
In Q2 2020, Hobart recorded a median house price of $758,500, and a median unit price of $457,500. This represents annual (Q2 2019 – Q2 2020) median price softening of -1.5% for houses and of -16.8% for units. Between Q2 2019 – Q2 2020 total sales slowed, by -28.8% for houses (94 sales) and by -62.5% for units (44 sales). Softer demand is expected due to COVID-19 conditions, however there has also been limited new stock in the market. With more affordable prices now is the time for first home buyers to act.
Average vendor discounts between Q2 2019 and Q2 2020 have swung to a buyer’s premium of 0.1% for houses, while units tightened to the same level (0.1%). Market conditions in Hobart continue to marginally favour vendors overall, as buyers are willing to offer above initial listing prices. This makes now a good opportunity to sell.
Over the past 12 months, house rental yields in Postcode 7005 compressed to sit at 3.9% in June 2020. This suggests the house rental market is in a fairly healthy position, particularly when combined with the 11.7% increase in demand for house rentals, to 230 rentals in the 12 months to Q2 2020. Now is an opportune time to enter the house rental market, particularly as the average days to let have also declined.
3 bedroom houses have provided investors with the most resilient rental prices annually with a median rent of $520 per week.
Postcode 7005 recorded a vacancy rate of 2.3% in June 2020. Although the increasing vacancy rate trend might sound alarming, a vacancy rate of 2.3% is still well below the Real Estate Institute of Australia’s 3.0% healthy benchmark. This confirms a healthy rental demand continues to exist in Hobart, and that there is conducive conditions for investment.