Hobart TAS Property Investment

## 2. Market Overview The median house price in Hobart is $1,042,791, while the median unit price is $768,476. The market has experienced a 1.9% price growth over the past year, with a 4.6% 5-year CAGR. Although the days on market are not available, the stable market cycle and high rental demand suggest a balanced market. This signals a good opportunity for buyers to enter the market, while sellers can expect a stable price environment.

## 3. Rental Market The vacancy rate in Hobart is 1.8%, indicating a tight rental market. The median weekly rent is $690, resulting in a gross rental yield of 3.4%. With a high rental demand and stable vacancy trend, investors can expect a relatively low vacancy risk. The demand rating is high, driven by the low vacancy rate and stable market cycle.

## 4. Short-Term Rental Opportunity The median nightly rate for short-term rentals in Hobart is $219, with an occupancy rate of 35%. This translates to an estimated annual revenue of $28,443 (assuming 365 days of occupancy at 35% rate). Compared to the long-term rental yield of 3.4%, the short-term rental opportunity may offer a higher potential return. However, investors should carefully consider the trade-offs between the two options, including management fees, cleaning costs, and potential regulatory risks.

## 5. Infrastructure & Growth Drivers Several infrastructure projects are underway or approved in Hobart, including the Hobart Airport Master Plan - Terminal Expansion, Macquarie Point Development, Tasmanian Health and Medical Research Precinct, and Southern Suburbs Demand Management Project. The presence of Glenorchy station 7.0km away provides relatively convenient access to public transport. These projects are expected to drive demand and support long-term growth in the area.

## 6. Bull Case If market conditions hold or improve, the upside scenario for Hobart is promising. With a 4.6% 5-year CAGR and a stable market cycle, investors can expect continued price growth. Assuming a 3-year growth forecast of 1.4% per annum, the median house price could reach $1,123,919 by the end of the forecast period. This represents a potential capital gain of $81,128, or approximately 7.8% per annum.

## 7. Risks Despite the positive outlook, there are specific risks to consider. The unemployment rate in Hobart is 7.1%, which is higher than the national average. This may impact rental demand and vacancy rates if the economy experiences a downturn. Additionally, the supply pipeline is moderate, with development activity consistent with long-term averages. This may lead to increased competition for investors and potential downward pressure on prices. However, no significant risk factors have been identified for this suburb, and the flood and bushfire risks are low, according to the state planning portal overlay.

## 8. The Play For investors looking to enter the Hobart market, we recommend targeting an entry range of $900,000 to $1,200,000 for houses and $600,000 to $900,000 for units. A minimum yield of 3.2% should be targeted to ensure a relatively stable cash flow. Investors should monitor watch signals such as changes in rental demand, vacancy rates, and infrastructure developments. Our recommended strategy is to focus on long-term rentals, given the stable market cycle and high rental demand. However, short-term rentals may offer a higher potential return for investors willing to take on the associated management fees and regulatory risks.

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.