Having ridden the covid property wave better than most states it was inevitable that Tasmania, and in particular Hobart, was going to experience some sort of correction in the proceeding years.
While the Australian property market currently presents a complex landscape of opportunities and challenges, Hobart continues to thrive, despite a general market correction in property prices.
The first interest rate cut in five years last month was also welcome news for the Apple Isle, and although in general terms the cut was modest, the potential savings for homeowners and the confidence boost for potential buyers could be immeasurable.
The fear of being caught in rising interest rates after purchasing a home or investment property has now been significantly reduced, which should encourage more Australians to buy.
Senior Manager, Residential and Rural Sales, Elders Hobart, Mathew Chugg said the interest rate reduction had restored some faith back into the local market.
“There is not much chance of interest rates rising in the near future, with the more likely outcome that they will reduce further or remain steady,” Mr Chugg explained.
“I think we will look back at this time and say this is where our market began to transition. There are some greater worldly factors still at play and I believe now is the beginning of a turning point.”
Despite the country’s house prices losing 0.3% to the end of February, Hobart gained 0.4% to remain 1.8% to the good over the past 12 months.
Mr Chugg said this was despite buyers becoming a bit more selective in a market where presentation and professional consultation was paramount.
“Although days on market has increased to 34, those properties that are priced well and are impeccably presented are still achieving great results. It has become vital that agents are consistently providing good quality market feedback to their vendors, whether that be positive or potentially negative, and that vendors take that advice onboard.”
Elders Tasmania Marketing Manager, David Stalker said Hobart was seeing a lot of first home buyers coming back into the market with a number of incentives currently available.
“There are a number of existing and new home purchase incentives available to first home buyers including share purchase deals, the Tasmanian Governments MyHome scheme grants and stamp duty concessions are assisting people to get into the local market,” he explained.
“Add to that a white-hot rental market with a vacancy rate of around 2% and economists are suggesting it is a great time to get into the Hobart investment market with yields quite strong compared to others across the country.”
Mr Stalker reiterated Mr Chugg’s point of the importance of property presentation in the current climate.
“Buyers currently have a lot of choice. Presenting a property well and generating that sense of initial excitement around a home has become more important than ever. While most properties we are seeing are positioned prominently, it is the ones that create that bit of wow factor that are performing best,” Mr Stalker added.
Elders Expands in a Moving Market
Having gone through some pretty rapid fire growth in Hobart in both the commercial and residential spaces over the past few years, the Elders brand continues to strengthen despite a somewhat indifferent market across the state.
Interest rate rises and a slight market cooling have not prevented a gradual progression for Elders to become Tasmania’s truly holistic property brand, according to General Manager, Tasmania, James Cornish.
“Going back a decade we had approximately 50 employees and were heavily focused on our agency and lifestyle business,” he explained.
“Having mirrored the national structure, we have filled gaps in our real estate business with staff growing to over 220 and 6 new offices joining us just last year. We have doubled the size of the Tasmanian real estate business to become a truly holistic offering with the state’s largest commercial business embedded in it.”
Mr Cornish said having diversified the business in this way had attracted a number of leading property operators to the brand.
“We could argue that we now have the leading operators in what they do working for Elders, across property management, residential, commercial and regional sales, people who really know their craft,” he said.
“Even though we have been well known for our commercial property arm in Hobart, in the last 12 months, we have become one of the largest residential property operators in the city.
“Our market share has also grown significantly across the north to north-west of Tasmania, with the addition of a franchise office in Ulverstone and a corporately owned office in Burnie,” Mr Cornish added.
What Now for the Tassie Market?
Tasmania is currently benefitting from increased livestock prices which are now almost double what they were a year ago. This has bought back renewed confidence in agri business in particular and in turn the property investment market, according to Mr Cornish.
“There is certainly confidence in the Tassie market, people are coming to Tasmania, not leaving it,” he said.
“The unemployment rate is historically low and on the property management side, organic growth is resulting in really good rental returns compared to the other states. Commercially, there is plenty of opportunity on both the management and sales side for commercial investors to prosper, particularly in Hobart.”
Mr Stalker said the growth Elders had experienced over the past year was a testament to the business it had created in the southern state.
“When the market slows in a particular area, you usually see a bit of a contraction of people coming into the industry,” he explained.
“For us however, we’ve got more agents than ever in Hobart and with the backing of a well-credentialed national brand, we have been able to weather the tough market conditions and establish ourselves as the property leaders in our state.”
Want to know more about the happenings in Tasmania? Contact an Elders expert in our Hobart Office here.