The latest QBE Australian Housing Outlook report anticipates a 4% rise in Hobart house prices and a 3% increase in unit median prices over the next three years.
The return to regulation market conditions follows a surge in property values in recent years. On average, the median house price in Hobart grew by an impressive 10.6% per annum in the three years to June 2018, noted QBE. However, affordability constraints appear to have begun to weigh on price growth.
Steady net interstate migration flows induced through a lower Australian dollar, were central to the demand for Tasmanian real estate. QBE says the weaker dollar also boosted the state’s tourism and agricultural sectors. The improved employment environment has seen the demographic profile of those moving to Tasmania become younger compared to the older ‘tree changers’ traditionally downsizing from the more expensive capital city markets.
The demand for dwellings has been strong and has exceeded new supply in recent years, taking the market into a dwelling deficiency. Rental vacancy rates have tightened, falling to 1.5% in March 2019.