Hobart’s housing market looks a lot like Sydney’s did two years ago, a business outlook report for the March quarter says.
The Deloitte Access Economics Business Outlook report for the March quarter shows Hobart has the trifecta of factors that led to the massive growth in the New South Wales capital in 2016:
- The fastest house price growth in the country
- Very low rental vacancy rates
- Rising residential rents
Alongside a 22 per cent increase in housing approvals, these factors would likely prompt a rise in housing construction for the long term, the authors said.
“The combination of relatively cheap prices, increased demand for tourist accommodation from Airbnb and low interest rates suggest this might just be the start of a prolonged upswing in housing construction activity,” the report said.
With low interests rates likely to remain in place until early next year, the housing price rises are set to continue.
That will not be welcome news to those struggling to get a toehold in the Hobert property market, especially since the real estate industry recently said the market was cooling off.
‘Success breeds success’
The state’s economy was thriving on a “virtuous cycle”, the report said, where gains across the economy fuelled further economic prosperity and “success breeds success”.
“Tasmania’s better economic news is feeding better news on population growth — which is itself feeding back into better news for the state’s economy,” it said.
While the cycle of growth was positive, it was only occurring at a “relatively modest pace”, and still below the national average.
The economy has continued to benefit from growth in tourism, agriculture and food and beverage manufacturing.
International visitor numbers to Tasmania rose by 17 per cent in the past quarter with flow-on effects in food and retail sectors.
Despite the controversy surrounding it, salmon farming was also singled out as going “from strength to strength”.
Commercial construction ‘a stand-out’
Commercial construction across Tasmania has also helped fuel the economic fire and has outperformed other sectors.
The value of work done has increased by two-fifths over the last two years alone.
Construction works, including the Royal Hobart Hospital redevelopment and the Museum of Old and New Art’s new hotel, form part of the $3.5 billion worth of construction currently underway or in the pipeline.
The engineering construction sector also strengthened over the last quarter, with the value of rail work done increasing by almost three-fifths.
This article was published on ABC News Online as part of my employment with the ABC in Hobart. It was published on Monday 23/4/18. It can be found here: http://www.abc.net.au/news/2018-04-23/tasmanian-strength-shows-in-new-deloitte-report/9686558