Hobart’s shocking real estate hotspots that surpassed the glamor districts – realestate.com.au

Two Hobart suburbs, 50km apart, have something unexpected in common: the city’s rising house prices.

An exclusive 30-year analysis of house prices found Bridgewater and Dodges Ferry easily outperformed Hobart’s glamorous suburbs.

These suburbs were the only areas of the 36 suburbs where the 30-year price growth factor (PFG) was in double figures.

For Bridgewater, one of Hobart’s cheapest areas, the current average home price is $421,000, which is 11.7 times higher than in 1995.

In beachy Dodges Ferry, the median has risen to $567,000, with a PGF of 10.8.

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Bridgewater, Tasmania. Image: supplied

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House prices in Greater Hobart have increased by a factor of 5.9 to an average of $680,190.

Richmond, West Hobart and Sorell round out the five best performing areas, with growth ranging from 7.9 to 8.6. Sandy Bay and Battery Point increased by a factor of 7.2 and 7.3.

REIT figures show that Bridgewater’s average home price was less than $100,000 in 2003.

PropTrack economist Angus Moore said in 1995 that the suburb’s median home value was in the mid-$30,000s.

He said the study used PGF rather than expressing the change as a percentage because percentages are harder to imagine when they are large.

“When the change is more than 1,000 percent, a growth factor figure is easier to understand,” he said.

“The Hobart data showed a bit of a mix in the best performing areas, this was not dominated by all affordable or expensive suburbs.”

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PropTrack economist Angus Moore.

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Although Bridgewater is a suburb built for public housing, new developments have also sprung up.

Joel Nielsen of EIS Property has listed eight high-quality, affordable new units in Nielsen Esp for Loreto Community Housing. The real estate advisor said they are specifically designed for buyers of MyHome share plans.

“Bridgewater has become increasingly popular with first home buyers and investors,” he said.

“For first-time buyers, it remains one of the more affordable suburbs compared to others in the region.

“For investors, the appeal lies in the combination of a low entry price and strong rental yields.”

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Mr Nielsen said with the completion of the Bridgewater Bridge, the commute into the city will take just 25 minutes.

“The suburb offers excellent amenities, shopping centres, medical facilities, a Services Australia office and close proximity to the Brighton Transport Hub, making it a convenient and well-connected location.”

Units at No. 14 Nielsen Esp, Bridgewater are listed with EIS Property and priced at “Offers over $445,000”. Image: supplied

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Units at No. 14 Nielsen Esp, Bridgewater.

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Moore said the forces driving price increases over the past three decades are complex, but can be broadly categorized by changes in supply and demand.

He said the country was building far fewer homes relative to population growth, creating supply shortages and coinciding with a “structural” downward shift in interest rates, giving buyers access to more debt.

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No.4 Chaffeys Dr, Dodges Ferry is for sale with Kate Storey Realty for over $560,000. Image: realestate.com.au

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Fall Real Estate has No.11 Fifth Ave, Dodges Ferry, on the market for $750,000. Image: realestate.com.au

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He said the RBA’s cash rate peaked at 17.5 per cent in early 1990 and fell to 0.1 per cent in 2021. Currently, the interest rate is 3.6 percent, while banks offer loans at around 5.5 percent.

“Rates used to be higher and more volatile, but lower rates mean people can take out bigger mortgages.

“Prices may be structurally higher because rates are structurally lower and more stable than in the early 1990s.”

No. 1.30 Cheswick Crs, Bridgewater cost $545,000 plus with Ray White Hobart. Image: realestate.com.au

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Priced at over $489,000, No. 2 Maxwell Dr, Bridgewater is for sale at BellParker@homes. Image: realestate.com.au

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Mr Moore noted that house price growth had not matched wage increases.

“Incomes have not grown tenfold over this period like house prices. House price growth has far outpaced wages and far exceeded inflation,” he said.

“That may not help much if people stay put, but if they downsize or move and are in a position to release that equity, they can have a significant amount of wealth.

“It is difficult to predict 30 years ahead, but it is less likely that we will have the same level of growth again.”