This article is from the Australian Property Journal archive
HOBART has ranked fourth in the world for annual house price growth, according to Knight Frank’s latest Global Residential Cities Index, as city house prices rose at the fastest rate in almost 80 years.
Turkey trio Istanbul, Izmir and Ankara occupied the top three spots with eye-watering growth of 63.2%, 58.5% and 55.9% respectively.
Hobart was next with 33.7%, while Canberra came in at seventh with 30.7%.
Not far behind on the list of 150 cities were Darwin in 11th (with 25.5% growth), Sydney in 13th (25.4%), Adelaide in 15th (24.8%) and Brisbane in 18th (22.1%).
Melbourne was at 36th with 15.8%.
“Hobart has been the beneficiary of COVID, with a surge in popularity as many interstate purchasers have looked for more of a regional location to escape lockdowns and avoid restrictions in,” said Mathew Chugg, Knight Frank Australia department manager residential Hobart.
“As the capital city of a small island state, Hobart showed it could move quickly, shut borders and continue to live as normal. The change of working conditions has also had a large impact on the Hobart property market as people can now work from home.
“It also helps that Hobart is relatively easy to get to from other major cities, being only a one hour flight to Melbourne and 1.5 hours to Sydney.”
Chugg also said an awareness of Hobart’s lifestyle options had increased over the last couple of years.
“World class food and wine, the most beautiful scenery, great educational options for families – all on your doorstep. Within a 30-minute drive, you could be on top of a mountain, on a remote beach or in a rain forest – a lifestyle that carries great appeal in the Australian culture.”
Of the 150 cities tracked by the index, 140 saw prices increase in 2021, up from 122 in 2020.
The index grew overall by 11% in 2021. Cities in the Americas registered the strongest jump, averaging 15% annual growth compared to 11% in the Europe, Middle East and Africa region, and 9% across Asia-Pacific. North American cities Phoenix, Halifax, Miami, Dallas and San Diego filled out the rest of the top 10.
“US households not only accrued significant savings during successive lockdowns but the equity in their homes expanded significantly too. In some cases, this wealth has been used to upgrade existing homes or purchase a second property,” the report said.
“The question is how long prices will continue to rise at their current pace. Interest rates are starting to rise – New Zealand, the UK and the US have all hiked base rates already in 2022 – consumer sentiment is weakening due to the geopolitical crisis in Ukraine and incomes are not rising in line with inflation.
“But even if rates reach 4% in the US and the UK – the figure at which Capital Economics forecasts house prices would start to fall, it is unlikely to stop the urban revival in its tracks.”
New Zealand’s Hamilton and Auckland came in at 12th and 24th.
The top 20 was rounded out by Bratislava, St Petersburg, Seattle, Moscow and Atlanta.
Kuala Lumpur saw the biggest fall in prices at 5.7%, while Italian cities Venice, Genoa, Palermo and Florence all saw values fall.
