HOBART has outperformed Australia’s major capital city property markets, recording another small rise in median dwelling values despite COVID-19.
The city recorded a dwelling (house and units) value increase of 0.1 per cent in August despite a national decrease in values of 0.4 per cent.
Houses saw the biggest monthly increase, up 0.3 per cent, but a 0.7 per cent decrease in unit values clawed back the dwelling average increase, according to the CoreLogic Hedonic Home Value Index for August.
Melbourne, which is in the grips of a strict level four lockdown due to outbreaks of the novel coronavirus, saw a decline of 1.2 per cent (overall dwelling values) over the same one month period.
Sydney saw declines of 0.5 per cent, while Brisbane posted a 0.1 per cent drop.
The best performing city was Darwin, which saw values increase by 1 per cent in August, albeit of several years of declining values.
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CoreLogic’s head of research Tim Lawless said the performance of each housing market was “intrinsically linked with the extent of social distancing policies and border closures which also have a direct effect on labour market conditions and sentiment”.
“The Melbourne housing market is the main drag on the headline results,” he said. “Through the COVID period to date, Melbourne home values have fallen by 4.6 per cent.”
In Hobart, dwelling values increased 0.3 per cent over the last quarter and 5.5 per cent over the past 12 months, with median values (houses and units) reaching $490,743.
“Looking forward we are likely to see a diverse outcome for housing markets around Australia, depending on how well the virus is contained and the regions exposure to
other factors such as its reliance on overseas migration as a source of housing demand,” Mr Lawless said.
Tim Lawless
Tasmania’s borders have been slammed shut since March 19, with Premier Peter Gutwein recently announcing the moat would remain in place until at least December 1.
The state has just one active case – a man in hospital who returned from Melbourne after seeking medical treatment in August.
Low levels of cases and eased restrictions in many regional markets is just two of the factors holding up the smaller markets.
The data shows the best performing markets besides Hobart are Adelaide and Perth (0.0% change), Canberra (up 0.5%) and Darwin (up 1%).
All of those markets have zero or minimal cases and more freedoms.
Mr Lawless said regional markets also tended to be less reliant on overseas migration.
“Regional markets may also be appealing for their relatively low density and lower price points,” he said.
“The normalisation of remote work through the pandemic could make proximity
to major cities less of a factor in home purchasing decisions.”
Anecdotally, local real agents are reporting an uplift in interstate buyer inquiry, particularly from Victoria.
Petrusma Property Hobart/Sandy Bay managing director and auctioneer Sam Towns said he had sold properties to “plenty of interstate buyers”, with a number prepared to buy sight unseen.
He said border closures meant buyers were able to do virtual tours of homes instead.
“They are from all over (Australia),” he said. “I think people are seeing Hobart and Tasmania as a bit of a sanctuary.
“If they can’t move immediately, they are certainly wanting to make the move here one day.
“And if their job can be done remotely, that creates flexibility.”
Mr Towns said the key suburbs being looked at by interstate buyers were those closest to the CBD – West Hobart, Sandy Bay, Battery Point and the like.
He said Hobart offered great views, lifestyle, proximity to the city, lifestyle and relative affordability compared to the likes of Sydney and Melbourne.
Charlotte Peterswald for Property sales manager Debbie Heron said interstate buyer inquiries were “trickling in” but she expected that change dramatically once the border opened.
“Once borders open, the Hobart market will go ballistic,” she said. “In the interim, locals are taking advantage of less competition.”
CoreLogic Hedonic Home Value Index August 2020 – Change in dwelling values (houses and units combined)
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