Population growth and limited rental supply has made Hobart Australia’s best performing capital property market.
Hobart was the only capital city to reach double-digit annual growth in house and unit rental prices, according to Domain’s rental report which analysed the national rental figures for the final quarter of 2017.
Rents rose 6.8 per cent over the quarter and 12.9 per cent year-on-year. The increase translated to a $45 increase in rent since the same the figures were recorded in 2016 – a $395 a week expectation.
Median unit rental prices grew 6.3 per cent over the quarter and 13.3 per cent annually, to $340 per week.
“Hobart currently has strong levels of migration and not enough rental supply to keep pace,” Domain data scientist, Dr Nicola Powell said.
Investors in Hobart property are enjoying the best gross rental yields in the country, house rental yields are 5.34 per cent while units are 5.52 per cent – falling just behind Darwin and Canberra.
Canberra recorded a result of 5.80 per cent over the quarter, closely followed by Darwin at 5.67 per cent.
Houses in the Tasmanian suburb of Chigwell returned a rental yield of 7.9 per cent and have a median value of $237,217 which made it the most affordable suburb to invest in. Chigwell as a Tasmanian suburb to invest in was closely by Warrane (6.6 per cent yield) and Glenorchy (6.3 per cent yield).
In contrast, major capitals like Sydney and Melbourne currently offer median house rental prices of $550 and $425 respectively. However, in comparison to Hobart’s status, Sydney’s rental market experienced a drop over the quarter despite steady prices which has foreshadowed a tightening of its rental market in 2018. In Melbourne, spiking population numbers have put pressure on rental stock and therefore prices, resulting in its record high $425 on its way to mirroring Sydney’s situation.
SQM research’s latest figures revealed that Hobart’s dwelling vacancy was the lowest in the country at 0.7 per cent.