Here’s What You’d Get A Million Dollars For In Hobart’s Hot Real Estate Market

While many in and out of the Hobart real estate market are watching home prices with bewilderment, a new report sheds light on another reason why home ownership is out of reach for many in the island state.

The Core Logic report shows that Tasmania has the largest gap between wage increase and house price growth in Australia in the past 20 years.

Union House on one of Hobart’s main streets is the latest example of how hot the market can be.

It may be promoted as ‘in need of a fix’ but that doesn’t deter those keen to take on the challenge in Tasmania’s hot property market.

The 20th century estate in Stoke Street, New Town has attracted “enormous” interest since it was put on the market for $1.15 million bids this week.

An old kitchen in the Union era house
The home is likely to be purchased for more than the asking price in the current market.(Supplied: Peterswald)

Described as “perfect for those seeking a restoration project” and a “rare blank canvas,” the property has already received several offers.

Real estate agent John Morgan said locals want the home back to its former glory.

“I think the locals are trying to snatch properties like this to keep the mainland people out,” Morgan said.

“Given the interest that is emerging, I think we will have a very strong result that goes beyond the index but who knows in this market.”

Morgan said the house was inhabited until earlier this year.

“The previous owner loved and lived in it but it needs some renovation to bring it up to the standard most people would like to enjoy these days,” Morgan said.

It is yet another example of the hot real estate market in Hobart that is out of reach for some.

Black and white photo of a Federation style house
The Stoke Street house is at its peak. (Supplied: Peterswald)

The “fear” factor

A Core Logic report released on Friday showed house prices in Tasmania have jumped 300 per cent in 20 years.

Real estate agent Penny Flanagan witnessed it in relief in the Mount Nelson suburb of Hobart.

Homes that sold for less than $200,000 in 2000 now sell for up to $1.3 million.

“I put it in FOMO – fear of getting lost,” she said.

“We have a shortage of inventory at the moment and people desperately need access while the market is still half affordable.

“And people are worried about price hikes, so they are offering ridiculous rates for property insurance.

The Core Logic report also shows that Tasmania has the largest gap between wage increases and house price growth in Australia.

Aerial shot of a dilapidated house next to mansions in a leafy suburb
The house is on a main street in the suburbs of New Town. (Supplied: Peterswalds)

In the 20 years to September 2021, the wage price index in Tasmania has increased by 79.9 percent.

Nationally, wage increases were about 80 percent, with home values ​​rising 193 percent.

The report’s author, Elisa Owen, said the discrepancy in Tasmania was significant.

“He’s already talking about the struggle a lot of first home buyers are going to have right now in terms of trying to put together a deposit when income growth is relatively low compared to home prices,” Owen said.

“House prices are running out faster than people can catch up with their savings.

“If you own a home that is great, it means that your wealth is accumulating very quickly and it is better for you to own the asset than to try to increase your salary in a savings account.”

Ms. Flanagan agrees that it’s getting more and more difficult.

“We are still very affordable for many mainlanders, but I feel very sorry for early homebuyers.”

Stoke Street house room
According to the agent, “The previous owner loved it…but it needs some refurbishment.”(Supplied: Peterswald)

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