The Hobart and Tasmania property market experienced a slowdown in the last quarter of 2023, as the impact of cash rate hikes and reduced affordability took a toll on buyer demand and seller confidence. However, prices remained at an all-time high, reflecting the strong fundamentals of the market and the ongoing supply shortage.
According to the Real Estate Institute of Tasmania (REIT), the median house price in Hobart was $945,000 in Q4 2023, down 13.3% from Q4 2022. The median unit price was $641,500, down 13.5% from Q4 2022. The number of sales also declined, with houses dropping by 6.4% and units by 52.1% over the year. The average vendor discount for houses swung to -0.6%, while units remained at a premium of 0.5%, indicating new opportunities for buyers.
The rest of Tasmania also saw a decrease in median prices and sales volume, with the state-wide median house price falling by 10.5% to $540,000 and the median unit price dropping by 11.8% to $400,000 in Q4 20231. The number of properties sold across Tasmania decreased by 10.5% over the year.
Despite the slowdown, the rental market remained strong and resilient, with high demand and low vacancy rates. The median house rent in Hobart was $595 per week in Q4 2023, up 8.2% from Q4 2022. The median unit rent was $450 per week, up 7.1% from Q4 2022. The vacancy rate in Hobart was 0.6% in December 2023, well below the healthy benchmark of 3.0%. The rental yield for houses was 3.4% and for units was 3.6%, both above the national average of 2.9%.
The outlook for the Hobart and Tasmania property market is mixed, as the effects of the pandemic, economic recovery, population growth, and government policies continue to influence buyer and seller behaviour.
While some analysts predict a further correction in prices and activity in the short term, others expect a rebound in demand and confidence as vaccination rates increase, borders reopen, and interest rates remain low. In any case, the market remains attractive for investors and owner-occupiers alike, as it offers affordability, lifestyle, and potential capital growth.