By Herron Todd White
The predictions for the Hobart region in February 2020 were for steady growth and we didn’t let you down. Sure, the past six or so months have been a trying time and there was a quiet time between April and June, however continued reducing interest rates and government stimulus packages have spurred the market on with good growth throughout the year.
Interest rates in February were circa 3.12 per cent and the Reserve Bank cash rate was sitting at 0.75 per cent. Now the Reserve Bank cash rate is at an all-time low of 0.1 per cent and standard variable owner-occupied rates are down to around 2.29 per cent. Money is cheap and this is spurring the market even further.
We predicted the lower socio-economic areas to level out but this couldn’t be further from the truth with these areas outperforming higher valued areas. At this point in time with rates so low, it is actually cheaper to buy than rent. On the flip side of the coin, the banks aren’t making it any easier to access funds for most lower income earners.
Property sales in excess of $1.5 million have slowed since the pandemic but there are still some high-end property transactions. Properties up to $600,000 are still walking out the door with multiple offers often well in excess of asking prices.
According to a report submitted by SQM Research, the vacancy rate for the Hobart region was sitting at a low 0.9 per cent in February and surprisingly as at October, the rate had reduced to a low 0.6 per cent. Rental prices seem to have levelled out since the start of the pandemic with gross yields hovering around the five per cent mark.
What will 2021 bring for us in the south is anyone’s guess but it would be fair enough to predict a steady market with possible increases due to the record low interest rates, shortage of supply and many owner-occupiers and investors alike chomping at the bit to buy a safe piece of the Apple Isle property market.
Stephan Ning Liu
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