Hobart - the best long-term investment in Australia over the past decade
Over the past decade , Hobart has seen both the highest level of capital growth and rental growth . House prices have more than doubled ( increasing by 125 per cent ) and rents have increased by 69 per cent . It ’ s hard to imagine how affordable Hobart was given how significantly its housing market and economy has changed over this time .
Like the rest of Australia , price growth has now stalled as interest rates rise . This will be only temporary but at this point , we still don ’ t know exactly how high interest rates will go . Until there ’ s a clearer outlook , it ’ s unlikely that we ’ ll see strong growth . Nevertheless , rental growth is more certain , particularly given that borders have reopened and we have a construction crisis limiting the level of new development .
The strength of the rental market is particularly apparent at a suburb level . There are only three suburbs in Hobart that are currently seeing declines in rents and this is only for units , not houses . These suburbs are Rokeby , Dynnyrne and South Hobart .
Although Hobart has been one of the top performers over the past decade , unfortunately past performance is no guarantee of future performance . While household incomes have increased over the past decade , it ’ s been eclipsed by cost of living increases and affordability issues will impact the level of growth longer term . In addition , low levels of building activity , particularly for suitable housing such as apartments for students and downsizers , is expected to be turned around . The Hobart economy remains a vibrant one but the seismic shift that occurred over the past decade is almost certain not to occur again over the next decade . Hobart remains a great investment , however , with yields at one of the highest levels in Australia and it also remains a popular place to live .
42