The softer market conditions has led to the median house price for Greater Hobart in the March quarter to decline by 5.6%, whilst the median house price in the North West saw a smaller drop of 3.3%.
But what exactly is causing the 20 year low?
What’s happening in the market?
This sluggish market has come as no surprise to us at REIT as vendors are failing to appreciate that the market is not as strong as it has been in recent times. Vendors are reluctant to lower their expectations and are clinging to unrealistic asking prices; particularly in more expensive areas and therefore demand for available stock has declined.
We have also seen the average time on market for property increase in comparison to the past. Our data shows the average time on market is now at 55 days, compared to just 2 weeks 12 months ago.
Whilst the current property market overall is flat, it does however seem current conditions are still attractive for some segments of the market, particularly interstate investors. With the average median house price at $310,000, interstate buyers are seizing the opportunity to grab a bargain. In fact, interstate buyers were responsible for 25% of all March sales. Likewise, the same percentage of Tasmanian properties were bought as an investment.
The Tasmanian property market has bottomed out – much of it to be blamed on overpricing. However, the market should be levelling out this year, and with prices holding relatively steadily, sales are anticipated to recover in the next 12 months.