- 2018 was a tough year for Australia’s housing market, at least in nationwide terms.
- However, in contrast to national trends, Hobart’s housing market remained red-hot.
- New analysis shows the Tasmania capital dominated the list of the fastest-selling suburbs in Australia last year.
- With affordability becoming stretched in Hobart, there are already signs that market conditions are now cooling.
2018 was a tough year for Australia’s housing market, at least in nationwide terms.
Across the country, the median home price fell by 4.8%, according to data from CoreLogic, the largest annual percentage drop since the global financial crisis.
In the capitals, the declines were even steeper over the same period, falling by 6.1% in average weighted terms.
With demand weak due to tighter lending restrictions, less activity from local and foreign investors and deteriorating sentiment towards the outlook for prices, among other factors, the proportion of properties up for sale swelled, particularly in Sydney and Melbourne, the two capital cities where median prices fell the most during the year.
Given those factors, the average sales length for listings also increased noticeably compared to what was seen in prior years.
After being so hot for so long, particularly in Australia’s largest centres, Australia’s housing market turned cold.
However, the national trends don’t tell the full story of what happened in 2018.
In some individual locations, rather than being ice cold, market conditions were hot.
Take Hobart, Australia’s southernmost capital city, for example. According to CoreLogic, the median price in the Tasmanian capital jumped by 8.7% during the year, adding to the strong gains achieved a year earlier.
The percentage increase was more than double the 3.3% increase in Canberra, location to the second-largest median price increase of any Australian capital last year.
Given that performance, Hobart unsurprisingly dominated the list of the fastest-selling suburbs in Australia in 2018, taking out eight of the top 10 spots, according to analysis from RiskWise Property Research.
“Lutana, a suburb of Hobart 6km from the CBD, and Mornington, only 7km from the CBD, both achieved an incredible average of six days to sell for houses,” said Doron Peleg, CEO at RiskWise.
“They were followed by three more suburbs of Tasmania and one in Western Australia taking a mere seven days to sell and the remainder taking only eight days, including Castle Cove in New South Wales.
“This is in stark contrast to the Australian average number of days on the market which sits at 43.”
However, with median home values in Hobart now higher than in many mainland capitals, Peleg says there are already signs that market conditions in Australia’s hottest housing market are also starting to cool.
“A significant increase in dwelling prices in Hobart in recent years, decelerating price growth, fewer people attending open home inspections and fewer inquiries on listings, indicate that housing affordability has made an impact and that price growth was unsustainable,” Peleg said.
“However, while these reductions are not surprising given Tasmania is less affordable than five of the states and territories in price-to-income ratio terms, the market supply is very small, so this will continue to drive price movements.”
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