A record run of house price growth across Tasmania has seen many inner-city Hobart suburbs hit the exclusive $1 million median price for the first time.
New data from the Real Estate Institute of Tasmania (REIT) shows that after a prolonged period of growth across the state, median house prices in many areas are now equal to those in the rest of the country.
According to the REIT, low interest rates, strong demand and “severe” shortages of stock have all contributed to the long period of growth the state has been experiencing.
Five suburbs in inner Hobart now have a median house price above $1 million.
Sandy Bay has the highest median house price in Tasmania, at $1.5 million, which is up 45 per cent since September 2020.
South Hobart sits in second place, with a median price of $1,227,500, followed by West Hobart, Taroona and Mount Stuart.
The region of Inner-Hobart now boasts a median house price of $1,026,500.
Greater Hobart’s median house price increased 5.2 per cent over the September quarter to sit at $710,000 – its highest-ever recorded level.
REIT figures noted there was a record $4.46 billion in real estate sales in Tasmania in the 12 months to September.
This was a 15.8 per cent increase on the previous year and it contributed to median values rising 18.7 per cent.
REIT President Michael Walsh said strong demand and a shortage of supply was contributing to the surge in prices.
“We Tasmanians are getting used to the idea that our real estate market has caught up to the rest of Australia,” he said.
“I think we’re still value for money, but we’re just getting used to the fact that $1 million here and $1 million there is not an unheard of price now.”
Investors eyeing off Launceston
Mr Walsh said house price growth had filtered outwards to areas such as Launceston, where the median price increased 15 per cent in the September quarter to hit $530,000.
“The market starts moving with the capital city… and Hobart has had a pretty good run for the last four or five years,” he said.
“Then for some reason, it tends to move towards Launceston and hence we’re in this situation now where we’re sailing on quite nicely.”
Over the past quarter, 29 per cent of properties sold in Launceston went to investors, leading Mr Walsh to label the region the “investment capital of Tasmania”.
Mr Walsh said the current economic conditions and tight supply should continue and prices would rise further.
“Low interest rates, improving economic conditions and an opening up of the borders will continue to see demand for property in this state grow,” he said.
“We clearly need to find avenues to release the pressure that has been placed on the rental and sales markets by seeking the government’s help to look for ways to expediently create more rental properties and build more established homes for sale.”