Hobart property market showing signs of recalibration following period of growth
After what has been an immense upturn in the Hobart property market, glimpses of recalibration are beginning to occur as overall enquiries in the market are weakening, with many non-client facing businesses looking to relocate outside the CBD and into more affordable surrounding regions.
Having now surpassed a premium, rent prices are the driving force behind the relocation, with demand for high-quality CBD assets on a slight decline. This, combined with the rapid rise of ecommerce business principles, has allowed businesses to pivot, with storefront presence becoming less of a priority as hybrid working arrangements are also on the rise.
From an investor point of view, yields are moving towards 6.0% for good investment grade stock, whilst a 6.5%-7.0% return is being seen on all other mixed-use assets, which depicts a more accurate picture of the market based off traditional trends.
Despite the curve flattening, the Devine Property team continue to transact on significant properties, with both the Suite 332-334 Main Road, Moonah, and 93 Montagu Bay Road properties going under contract after successful four week long expression of interest campaigns, closing the agreements on the locations.
Although remaining a region of immense demand, as overall enquiries decrease and vendors relocate into the outer suburbs to reduce costs, the market may be on track for recalibration in what has followed a surge in price and interest.
Coupled with multiple high-ticket properties having successfully been closed, and investments producing positive percentages of yields, the Hobart region continues to reflect an incredibly strong real estate market across all sectors.
KEY TAKEAWAYS
Investment yields moving back towards 6% for good investment grade stock.
Investment yields returning to 6.5 – 7% for other mixed-use assets.
Non-client facing businesses moving to outer regions as rental prices surpass a premium.
Multiple high-end establishments continue to move through Devine Property team.