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Home buyers spend $3.8b

Edition 192_House

Tasmania's housing market achieved record sales totalling $3.879 billion in 2017.

Despite a decrease in the number of homes listed for sale over the past two years, 11,353 transactions were recorded — the highest number in a decade.

Sales of houses for more than $1 million came in at 168, easily eclipsing the previous record of 109 for a calendar year set in 2015.

The majority of these high-end purchases were made by Tasmanian residents (130), with interstate buyers accounting for the remaining 38.

Figures released by the Real Estate Institute of Tasmania (REIT) in February showed that the total value of homes sold in 2017 was about $760 million more than the record $3.119 billion set in 2016.

The buoyant real estate market has seen many Tasmanians enjoy unprecedented rises in their personal wealth and it has also encouraged investors.

Five suburbs and one small town in the south recorded median price growth of more than 30 per cent for the 12 months to November 2017, according to CoreLogic.

Eaglehawk Neck grabbed the top spot with a 40.6 per cent change in its median house price, while West Hobart units showed a 39.2 per cent lift.

Inner Hobart experienced growth of 37.0 per cent, while Herdsmans Cove in the northern suburbs rose 34.7 per cent.

A small, coastal town south of Hobart, Snug, showed growth of 32.6 per cent and its median house price reached $437,500.

Mount Stuart, close to the North Hobart restaurant strip, was one of the most active Hobart suburbs with 36 sales and growth of 31.1 per cent.

Tasmanian building approvals for 2017 increased by 48.6 per cent year on year.

That was the strongest growth, by a big margin, of any State or Territory.

The President of REIT, Tony Collidge, said booming tourism, growing university student numbers, increased job opportunities, housing affordability and the emergence of Tasmania as a lifestyle destination were helping to drive the market.

“We now have unprecedented demand on a somewhat limited housing supply,” he said.

“No one foresaw how our economic condition would change so rapidly.

“Unfortunately, there is no quick solution to the shortage of stock, it is something we will have to work through.

“We estimate that Tasmania needs nearly 5,000 new homes to satisfy its current affordable housing, rental and private dwelling demand."

Interstate buyers bought about one in five of the homes sold in Tasmania in 2017.

First home buyers increased by almost 10 per cent or 120 sales to 1,345. Primarily they bought houses, with 158 units and 276 land blocks purchased by the group.

Hobart was the only capital city to record positive dwelling value growth in January, according to CoreLogic RP Data’s January Home Value Index.

It was also the only city to post a double-digit annual change in median dwelling values at 12.4 per cent.

The next best result was Melbourne at 8 per cent.

CoreLogic Head of Research, Tim Lawless, said Hobart’s high rate of capital gains could be partly attributed to lower prices relative to the big cities.

“Hobart’s median house values are about 59 per cent ($616,000) lower than Sydney’s median and 48 per cent ($401,000) lower than Melbourne’s,” Mr Lawless said.

“With values rising quickly in Hobart and now easing in Sydney and Melbourne, Hobart’s affordability advantage is being eroded.”

Investors in Hobart continue to see strong results with gross rental yields for houses (5 per cent), the second best in Australia behind Darwin.

Newly released statistics from Domain show that Hobart had the best house price growth in the December quarter, as well as the best annual house price growth and best annual unit price growth.

Hobart house prices are now at record levels, while Sydney’s median house price has declined over six months.

“It has been over a decade since Hobart experienced such a surge in house prices over a quarter, and the capital city’s results over the December quarter highlight the growing demand for homes in the Tasmanian capital,” Domain said.

The Hobart City Council issued development permits worth $82 million in January, boosting the tally for the first seven months of this financial year to $215 million. Last financial year the total was $203 million for 12 months.

In Launceston, house prices rose by 4.2 per cent in 2017 following a record-breaking number of sales.

The median house price reached $292,000 over 12 months, with house sales totalling 1,334 – up 280 from 2016 and the highest ever recorded.

REIT’s quarterly report noted the Launceston areas growing the fastest were outer suburbs, while inner-city locations had seen stable or negative growth.

Image courtesy of The Mercury

8 March 2018, Edition 192

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