The Tasmanian property market has had a ripper of run.
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Prices have at least doubled since 2014, and even since the onset of the pandemic, Launceston and NE prices have risen by 53 per cent, recent data shows.
Even real estate agents are admitting that there was a touch of hype in the market.
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Some of that exuberance is still on display in the offerings being advertised this weekend.
An ad for a decrepit-looking boat shed in Hobart's Derwent Park invites offers above $250,000 - for an 18-year lease. A 2-bedroom suburban unit in Latrobe is going for $450,000, and a York Street apartment is being offered at $849,000. A beautiful house in East Launceston with stretching views over the city and Tamar Valley - for $1.75 million.
Hard to Price
But Terry Robinson, managing director at Peter Lees Real Estate, said the hype at last looks to have come to an end.
"The steam has gone out of the market. People are a little bit more cautious at the moment, and the interest rates do scare people, and the noise is that they are going to put them up more in the short term," Mr Robinson said.
He said this housing bull market has been difficult to price at times.
"In that period of super-hype or enthusiasm, it was difficult to put an accurate price on - you'd put a pretty adventurous price on things, and it would still sell for higher," he told The Examiner.
He recalled one memorable case of selling a house in South Launceston.
"You'd look back at the sale history and realise these people only bought this a year ago - and it's doubled in 12 months. You'd think, that's not possible, but it was."
According to Tim Lawless, research director of property research firm Corelogic, median house values in Launceston and the North East increased by a whopping 53.6 per cent between March 2020 and June 2022.
But the data now confirms that price growth in the region peaked in January, and has been slowing down since.
Bull Market Faltering
"The pace of growth is now clearly easing, with the 1.0% rise in dwelling values over the June quarter being the lowest growth rate over a three month period since October 2020," Mr Lawless said.
"The slowdown is sharper for houses, where values were down 0.9% in the month compared with a 1.2% rise in unit values."
According to Corelogic, that 0.9 per cent fall in median house values in Launceston was the first monthly decline since August 2020 - near the height of panic over the pandemic.
The median value of a house in Launceston was $585,000 - down about $6500 from a month earlier. Unit prices were more resilient, rising 1.2 per cent during the month of June.
But house values in the city are on a downward trend, and if the June trend continues, Launceston's housing market is set for its first quarterly decline since since 2019, and its first annual decline since 2017.
More Rises Coming
According to independent economist Saul Eslake, the swing in the Reserve Bank's belated moves to tighten up interest rates is to blame for the fall. And we almost certainly haven't seen the last of them, he said.
The severity of the RBA's interest rate hike next month depends on the inflation figures due out towards the end of July.
"Anything much more than 1.6 per cent [inflation] probably would constitute an "upside surprise" and would thus likely prompt the RBA to lift its cash rate by another [0.5 per cent] at its next meeting in August," Mr Eslake said.
While property prices don't always fall as a result of higher interest rates, a fall in values is much more likely in Australia this year, he said.
According to Mr Eslake, these likely interest rate increases will have a chilling impact on Tasmanian home values.
Falls Only Beginning
"It is more likely [to have an effect] in this case because prices have risen so much [in Tasmania] and because households have so much debt," he said.
"I think it would be reasonable to expect [property price] falls of 10 per cent in Hobart between June and the second half of next year," he said.
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