Hobart Property Boom Over, Sydney Median House Price Falling
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Hobart Property Boom Over, Sydney Median House Price Falling


According to the latest quarterly report by
the Real Estate Institute of Tasmania (REIT), median house prices in Hobart are down, properties
are taking longer to sell, and investors are turning to other states to buy. Only a few months ago, property in Hobart
was being snapped up at a record rate, but now — as with the rest of Australia — the
tide has turned. REIT president, Tony Collidge, said Tasmania
property is starting to cool. He stated, “If the market is a clock, and 12:00pm is
when it’s at the peak, we’ve probably moved to about 12:30pm. People are saying that the prices are very
high and they’re not prepared to continue paying over-the-top prices for real estate
across the state. I don’t think the drop in the market will
be significant compared to what has happened on some of the mainland centres, simply because
there is a shortage of properties for sale.” According to their latest report, house sales
in greater Hobart have fallen 16% in the past year. Median house prices are down 1.7%. Mr Collidge also stated that properties are
taking longer to sell. He said, “In March 2018, it was just taking a bit
over two to two-and-a-half weeks for a property to sell and it’s now pushing out to the four-week
mark.” He said that investor purchases are down from
about 22% over the last four years, to 16% last quarter. “We have noticed a shift in investment activity
in the state … prices have dropped quite significantly in other parts of Australia
so investors are looking at options where they can get into those markets. While the market is down in those regions
they’re looking to capitalise there, rather than buying at the top of the market as is
happening here.” He also talked about the looming rental crisis
in Tasmania. He said, “Rents have gone up significantly because
of demand and it’s really hard to push them up much higher because of the affordability
factor. At the moment, the rental sector is about
30% of our market and 70% is owner-occupiers. We really needed to see that rental sector
grow from 30% to 40% to be able to accommodate a lot of the demand that we’ve got in the
marketplace. So with investors now leaving in that significant
number, we’ll probably see the rental share go down to 27-28%, which is not what we wanted
to happen.” But thanks to the investor exodus, this has
created potential opportunities for first home buyers. Mr Collidge said, “With the investors moving out of the market,
it’s created opportunities for first homebuyers and we’ve seen significant growth in the number
of first homebuyers in the market. We’ve seen first homebuyers go from 11% in
the last four to five years up to 17% this quarter, so that’s a significant increase,
and the median price they’re buying property at is around $330,000.” Head up to the mainland, and we can see that
Sydney median house prices are on track to fall below $1 million for the first time in
four years. The latest quarterly report by property website
Domain, shows that Sydney’s median house price is now $1,027,962, which is down 3% over the
past three months. The report stated, “Sydney’s current property downturn is
the sharpest in more than two decades. It is yet to surpass the duration of the 2004-06
slump but it is coming close to being the longest. Sydney house prices have fallen 14.3% from
the mid-2017 peak. If the pace of quarterly decline remains,
prices are likely to dip below $1 million in the coming quarter. A six-figure median house price has not been
recorded in four years. Sydney unit prices have fallen 9.9% from the
mid-2017 peak. For the first time in three years unit prices
are below $700,000.” Domain senior research analyst Nicola Powell
commented on the suspected reasons for the downturn. She said, “Ultimately obtaining a home loan is more
challenging and what that has translated into is there are fewer buyers in the market because
buyers are having to meet more stringent lending conditions. Some buyers are unable to get finance and
if they can get finance their borrowing capacity has been reduced.” Ms Powell also mentioned that prices will
probably continue to fall for the rest of the year. She said that the potential for an interest
rate cut could possibly spur on the market, but not by much. She said, “There is wariness amongst buyers. I think there is renewed interest but buyers
out there they’re smart, they’re knowledgeable in the fact that the market has been softening
for some time and I think they don’t want to overpay.” And that’s the current state of the Sydney
and Hobart property markets. The Sydney to Hobart is a famous yacht race
and is widely considered to be one of the most difficult yacht races in the world. But the current property price race is not
a race that anybody wants to win. It’s a race to the bottom.

23 Comments

  • Firstname Lastname

    Very interested to hear your thoughts about the debt to GDP ration that the Australian Government are running.

  • John D

    Tasmania was at the end of the feeding frenzy of property boom, investment wise it’s not a good choice when it comes to sell off because you could be waiting a long time to find a buyer.

  • Josiah Bomford

    I kind of imagine your channel as the next Current Affair. (Perhaps minus the tv crew chasing after the victim). Great Work! Love your content. Hope you go big 🙂

  • harveybirdman74

    4:30  When did anyone ever want to "overpay"? This woman spent several years at university to become qualified enough to write this?

  • huntthewild

    It has NOTHING to do with the so called lending conditions. People are not buying because they simply can't afford it. Most that did buy in the last 3 years ONLY purchased to try and make a quick buck now many of them are in serious trouble. A house is a place to live in, make memories in, grow old in. It is not an investment tool for TOOLS.

  • Reality Bites

    Sadly, first time buyers getting in now may well lose all their hard saved equity/deposit as prices continue to fall. I have sympathy for these people, but not for speculating investors (a contradiction in terms there!).

  • Damien Wright

    So Tassie is rolling over . Imagine how bad it will be in Tassie once construction stops , then tourism from the main stops as the greater recession really starts to kick in . Job losses debts going bad forced sales more pressure on the housing market . Imagine how many forced air B&B investment properties will come to market driving prices down further . If there are changes to negative gearing and forced sellers really on owner occupiers in an environment of tight credit,,, the correction might overshoot . Medium house price in Tassie 2020 ,, 130- 170 K .

  • One Two

    The senior analyst seems to NOT be saying that we're in a bubble. Everything else sounds just downright bullshit. Thus, she is the senior bullshiter!

  • Master Yoda

    Interesting video, but what I don’t understand is that the mainstream media is telling is us that Hobart real estate is going up, but this video is saying that the Hobart boom is over.

  • Gort Newton

    Sydney's Domain property prices are for properties on the market, that's not the sale price, it's the price being asked and is utterly unrealistic. The market is heading DOWN fast and houses taking much longer to sell, than this time last year. Buy a house now, ride the price down, watch your $1 million investment fall to 900k, 800k, 700k, etc.

  • All Good

    This was very uninformative.
    People who bought in the last few years shouldnt be thinking of selling now anyway so prices will be subjective. Good properties will always sell but its more about the type of buyer your property attracts and whether finance is involved.

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