Alarming signs appearing again for Hobart tenants.
Following an eighteen-month easement in vacancy rates and therefore the flow on result of slightly reduced rental prices (particularly at the higher end of the market), we are noticing a trend back to similar conditions that had the market at crisis point of affordability.
If you have recently renewed or accepted a new lease, you may want to raise a glass in celebration, as we may be about to experience a surge in prices on the back of reduced vacancies again hitting our market. This may not become apparent until deep into the December quarter or even early post New Year.
What’s happened?
Off the back of a fairly bleak winter (weather included), the market has recovered (for Landlords/ Investors) with the number of available properties on realestate.com falling from around 520 available at the beginning of August to a paltry 340 at the time of writing some seven weeks later! This is a significant shift in a small regional market and an impact on market conditions seems a fait accompli.
Why?
Well anecdotally it appears that a couple of classes of tenants have returned into our market. (Refer Easter Blog 2023). Migration seems to have slightly risen after 3 years of population decline and this will be a key driver if it continues. The main reason for the current trend of declining stock availability, is a return of our youth who have been travelling or doing studies interstate or overseas and these have come to completion. This should continue into our peak summer period and if it does, we are going to have a severe shortage of housing available and that scarcity will inevitably drive prices back to potentially beyond the record highs of pre and post Covid19.
If this occurs then yield returns for investors will rise so the question is…where are the investors for our market?
Again, anecdotally from speaking with peers, colleagues and industry professionals…absent!
This is not entirely surprising with the Hobart sales market lagging in volume of sales, increased stock and slightly declining prices.
Hobart desperately needs property investment rekindled to assist with affordability levels, so maybe it’s time to dip your toe back in if you have been considering a new purchase in Greater Hobart.
