- Posted By Janaka Wickramapathirana
The isolated island state of Tasmania has seen a boom in economic growth in recent years and when the markets of Sydney and Melbourne began to decline, Hobart became one of Australia’s top performing property markets over the past five years. Until March 2019, Tasmania was the state ranked the highest for growth in demand, second for wage growth and third for growth in retail trade.
Despite its unprecedented growth, the Tasmanian market is beginning to change slightly. One of the greatest appeals about living there was the affordability of rent and living costs, but now due to various factors including low vacancy rates and high demand, rents are climbing quite rapidly which means Hobart has lost its status as the most affordable capital city in Australia with rates now exceeding those in Adelaide, Brisbane or Perth but that’s not bad news for investors as rental yields are on the rise.
A suburb to watch in the greater Hobart area however, is Kingston beach which sits on the Derwent river at the mouth of the Browns Rivulet and has shown continuous growth since 2014. In the year up to March 2019 house and unit values rose by 7.8% and 10.7% and the rental market also showed strong growth, with rental rates rising by 7.1% for houses and 11.8% for units, highlighting the attractiveness for investors, but also the issue with declining rental affordability in Hobart.
Overall, the property boom in Hobart can be attributed to the vast improvement in the state’s economy over the years, and in terms of what the future holds for the market, the continuous of migration of more expensive and congested mainland cities such as Melbourne and Sydney and continued economic development and rising tourism, means that there should most certainly be a continuation in price growth in Hobart.