Hobart has highest profitability rate in the capital city markets

THE vast majority of Hobart property owners that resold their home in the September quarter made a profit, a national report has revealed.

In two Hobart municipalities there was a 100 per cent strike rate for profit-making sales.

And in three council areas, those profits were in excess of $200,000 compared to the last time these properties were sold.

Released today, CoreLogic’s Pain & Gain September 2020 report revealed each of Hobart’s seven council areas recorded profit-making sales in at least 94 per cent of transactions.

At 94.7 and 94.9 per cent, Glenorchy and Clarence had the fewest number of sales at a profit.

Sorell and the Derwent Valley were the strongest markets with every transaction profitable, while almost all of the sales in Brighton (96.2 per cent), Hobart (97.5 per cent), Kingborough (98.6 per cent) made money.

Sorell owners made a median profit of $204,000, up from $186,500 in the previous quarter and it was a similar story in Clarence ($235,000 in September, $231,750 June).

While the Hobart council area recorded Greater Hobart’s highest median profit $285,000 in September, that figure was down compared to $316,500 in June.

Across the municipalities there was a total profit of $223.6 million lead by 61.2 million in Hobart, 53.6 million in Clarence and $41.6 million in Kingborough.

By comparison, there was a total of $4.1 million in loss-making sales throughout Greater Hobart.

The data found that Hobart had the highest rate of profitability (96.6 per cent) in the capital city markets.

This is a title Hobart had held since march 2018.

CoreLogic’s head of research Australia, Eliza Owen, said the national market and the Hobart market had performed in opposite ways when it comes to investor sales versus owner occupiers.

Nationally, a higher portion of property investors sold their dwelling at a loss during the September quarter but this wasn’t the case in the southern capital.

“The only region where there was a higher incidence of loss-making sales among owner occupiers was across Hobart,” Ms Owen said.

“This has been a consistent trend across the past few quarters. In the three months to September, 3.2 per cent of owner occupied resales saw a nominal loss, compared with just 1 per cent of investor sales.”

Ms Owen said the relatively low level of loss-making sales among both cohorts reflects the exceptional capital growth across the Hobart market.

“CoreLogic home value indices show dwelling values across Hobart have seen annualised growth of 7.9 per cent for the five years to December 2020, the highest annualised growth rate of the capital city markets,” she said.