| Episode: | E146 |
| Show Title: | The Hobart Property Market 2023: Boom or Bust? |
| Cast: | Aaron Horne, John McGregor, & Patrick Berry |
| Show Length: | 23 minutes 44 seconds |
We’re Bacccccck…..Tune in to the latest episode of our podcast where local Tasmanian industry experts, John McGregor and Patrick Berry, dive into the exciting world of the current Hobart Marketplace.
Discover the shifting dynamics from a seller’s market to a more balanced playing field for buyers and sellers. Learn about the emerging trend of savvy buyers who are seeking the right opportunity and not settling for anything less. Don’t miss out on the possibility of moving away from the traditional “offers over” language in property advertising. And most importantly, get insight into the crucial factor of a property owner’s tenure and how it affects their decision to sell.
EPISODE TRANSCRIPT
Patrick
But it’s just interesting as to who is predicting which way the market will go.
Aaron
Yeah, I guess as I was reading through some of the notes, I was thinking about how by some Press Ltd proper geology. I know there’s some info in there, but yeah, he often says that kind of. Yet looking at all this data is at those big centres of Melbourne, Sydney, our kind of market here in Hobart is it’s slightly different.
Aaron
And then in some of his notes he’s predicted, you know, Hobart, Burnie, Devonport, pretty good spot to still continue to look. I might have misquoted him then, but he’ll be fine with it.
John
I’m sure if.
Patrick
You’re in Devonport Polytech and that’s pretty close. Yeah. So he was.
[intro]
Aaron
All right, guys, welcome back to the property pod. Your weekly engagement into real estate here in the Hobart marketplace. I’m your host, Aaron Horn. It’s 2023. First crab off the rack, bagging it up right at the end of the landing.
Patrick
I love that you say weekly in that opening. Yet here we are, February nine.
John
It’s been holidays.
Aaron
Yes, holidays. People have been away. It is a government mandated breather between podcasting and podcast. Every week of the year, it becomes way too oversaturated in the market. Everyone’s got to have a breather.
Patrick
They’re not saying.
Aaron
No, we’re back. We’re in action. It’s fine. People have missed us of had we only signed off? Mark I’ve had about five people say, where’s the show? Is it over? Please be over.
Patrick
Here.
Aaron
It’s not over. No. Welcome back. It’s 2023. It’s a new year. We’re here. We’re in the same studio all at the same spots. How are we doing, guys? How are you, John?
John
Feel good. Who? Really good is nice. It is nice to be back because I missed your voice pretty much for the whole of January. You weren’t really here, you know?
Aaron
Well, you can probably fill us all in on your adventures. Just kind of let the listeners know where you were.
Patrick
Yeah, I decided to go caravanning, become one of those great nomads, but not so great.
Aaron
It’s so funny.
Patrick
It literally. It is like.
John
I’m getting creative. I let it grow as well.
Aaron
It’s one of those things where if are said to me three or four years ago, I reckon you’d never do a caravan trip with your kids. Why exactly?
Patrick
In six weeks? Why two weeks in? I thought, why am I doing this? So where did you go? I headed up to Airlie Beach, middle of Queensland. I guess you describe it.
Aaron
Yeah. And your folks have a place on the coast? Yeah. Yeah. So you went there for Chrissy?
Patrick
Yes, I Christmas Broadbeach, you know, hit the beach, hit the sand sun. All that stuff is good fun.
Aaron
Normally we’d be jealous of that down here in Hobart for Christmas, but we had absolute cracking weather on Christmas here.
Patrick
Yeah, but have you had enough sun that you still have a three.
Aaron
For three from Taunton.
Patrick
I’ve got actually my foot is still got that thong. Ten. Have a.
John
Nice with shoes on for the next month.
Patrick
So that would have gone by now but it hasn’t so it’s nice.
Aaron
So what did you learn on your adventures up North? What what kind of give us a brief elevator pitch of what you saw, what you liked, what you like.
Patrick
Look, I learnt Queensland’s incredibly hot and I don’t know why people want to live there. The thought of you don’t and you want to move to Tasmania. John, I would love to help you out there.
John
We got your.
Patrick
Back. If that heat is getting to you, we’re here to help.
Aaron
Stuck the landing.
Patrick
Yeah, yeah. Nice. Yeah, but no, it’s just really like. It’s weird. No daylight savings as well in Queensland that I can’t get my head around.
Aaron
Well, the cows don’t like it.
Patrick
Oh.
Aaron
That’s why I cancelled that. Oh, it’s literally like they try to trot it one year. They kind of said like, oh, see how we go, it’s too hard to get up. And Malcolm if the clocks in our back the other way.
Patrick
Yeah. Just the cows in any other state in Australia don’t have that issue.
Aaron
That is used to it. They’ve got to buy watches or something like that. Okay.
John
I’m going to go with that one.
Aaron
You can fact check me on it, but I’m pretty sure that’s nothing to do with with the CAS.
John
Look, I’ve never had a reason for it, but now that is my reason.
Patrick
The cows don’t like it. If it’s true or.
John
Not, I got.
Aaron
To fact check this. I’ll be back next week with the cows. Oh, let’s take it in such a way to. It’ll help me.
Patrick
Out. Oh, that’ll work. Now that perfume that I’ve been I did bike riding, mucked around, went so a lot of housing estates being constructed up the coast of the highways land like they do it differently like here in Tassie you say subdivision go up. It’s 30 houses over there. It’s like 500 houses, a school, a Woolworth’s, like a do a whole.
Patrick
They build a city in one hit. So you drive up the highway and you get an hour out of Melbourne and then all of a sudden, you know, parklands opening soon and you see the billboard and it’s not just the subdivision, it’s a whole city they’re building.
John
Yeah, yeah, yeah.
Aaron
I guess it’s kind of like, remember that time ages ago back on the plot, we spoke about those megacities they built in China trying to get everybody to move out of the cities. And now they’re just these abandoned ghost towns because they’re just like, everybody move out of where you’ve grown up and lived or you’re not interested.
John
Just. Just just ghost cities. It’s crazy.
Patrick
Yeah, well, I guess these cities are working relatively well because the people can afford to buy, so they’re forced. Yes. Those areas. But now it’s interesting just seeing how different states do it.
John
I guess it must be much a way better thought out because rather than just a whole the glut of houses it’s got will always services are already integrated into that hub so boom you’ve got a new community. Yeah, yeah, yeah.
Aaron
Town planning is actually we were in Launceston just last weekend for festival, went up there with the family and where we stayed was kind of an old Launceston like just near the hospital. Yeah. Yeah. And trying to navigate some of those little side streets which are one way and tiny little things. We’re in this maze and you just think like, oh yeah, like town planning has come a long way now where it’s like, what?
Aaron
Oh yeah.
Patrick
No, you’re right. And when we’re in Canberra, that’s exactly how, if.
Aaron
To be.
Patrick
Really honest there, because Canberra’s building was actually an architectural competition when they built that city. So there’s actually a whole museum. You can go in Canberra about how they designed the city of Canberra and why it flows so well. And it does use dry after driving through Queensland and Sydney and you get to Canberra and you’ll at this place just.
Aaron
Get anywhere.
Patrick
Hey, I’d live here and I was like, no, you wouldn’t.
John
Unless you’re in the army.
Patrick
To drive. Yeah.
Aaron
Well, speaking of driving, I know like this is a little grumble, but while we’re away, there was that the time that the whole city came to a standstill with that truck fell over on the. It actually felt like a heist was happening. I thought there was like a truck that fell over on the Tasman Bridge. I crash on the bound bridge and I think something happened on the southern outlet like this calculated Ocean’s 11 style thing.
Aaron
We’re like, we’re going to take out all the major arterial roads, then we’re going to hit Fortnite, those like Die Hard three.
Patrick
So see, we don’t even know. Maybe in the basement underneath, you know, the wharf is joint foot reserve of gold for Australia.
Aaron
It well could be, it could be it. We could be onto something. I think we should start a true crime podcast the day Hobart stood still.
John
Do you distinctly remember that day that was like that? Did the music just crack and it.
Aaron
I could.
John
Just.
Aaron
Yeah, that’s, that was a mofo thing.
Patrick
I was there in it. Yeah, yeah, yeah.
Aaron
Well look I wouldn’t put it past Walsh.
John
And the submarine was going out of the dirt into the secret, but.
Patrick
It did just advertise that he won $80 million. It’s. I mean, maybe it’s a cover story.
Aaron
Guys. Well, let’s pitch. Let’s no more property talk. Maybe there was gold in the Lake Illawarra under the bridge. Oh, I’ve worked this all out.
John
Yeah, yes, yeah. Conspiracy podcast every Thursday.
Patrick
Oh, can we ever get this some backdrop back on track?
Aaron
We can. We just got to find out what Johnny Mack did on his little period away. We just got to catch up with you. How was your time over Christmas?
John
Well, ours was just spent with family, actually, and then just doing little small bits, renovations at the home and at our investment property. Yep. So it was because both of my brothers are down, which is always great. So we try and spend as much time with them as possible. And Luke announced that he’s getting he got engaged.
Aaron
Yeah, I heard.
John
Yeah. We’re next week I suppose if we’re released today actually he’s going to go to his wedding now.
Patrick
I heard that he had a big reveal planned and your dad squished that on the head by just stuffing it up?
John
Oh, I think Luke wanted to do more than is his fiance. I mean.
Aaron
Was it a solid.
John
Yeah, that was a really good to do a song.
Patrick
But and Chris says something along the lines, Well, I hope it’s not about getting engaged to somebody like that.
John
I could have done.
Patrick
But I surprised Dunn.
Aaron
Well, we’ll have to fact check that as well.
Patrick
But that’s what the rumour in the office was when I came back.
John
And it was, mind you, with that thing where if you’re to consider his personality, it’s exactly something he would accidentally do. Yeah.
Patrick
He’s 14. And to be like, damn, it’s it was.
John
It was a genuine surprise. It’s really nice. Yeah.
Aaron
Well, my, my aunt was watching the project or something the other night. She said he had a ring on. Yeah.
Patrick
Told him I don’t want to see. Yeah. Let’s listen.
Aaron
But yeah I actually watched him on Taskmaster Master last week. Hilarious.
John
That is a good show. So, Grandma’s.
Aaron
Yeah. What do you want to do when he died? Have you watched it?
Patrick
No, not this week.
Aaron
I had to make a video of his lifetime and it was, you know, one minute you had 45 minutes to make and then he’s like in. And Luke died winning the six Olympic No. Six grand final, you know, and I lost it. So I get.
John
I think he said in a social post where he’s a, you know, older brother, Tom Gleeson. And I could just imagine those guys must just give each other hell.
Aaron
Yeah, the red headedness of them.
John
Yeah, yeah. It’s, it’s the band is really good. I really enjoy now.
Aaron
Very, very entertaining. So Channel ten, check out Luke on Taskmaster.
John
Yeah, yeah. But for me, it was pretty, pretty crazy, which is fine. I didn’t really need any more, to be honest. No, I worry about some big holidays down the road.
Aaron
Very nice. Very nice. Well, we’ve had our prerequisite banter at the start of the show put in show notes about Nina. Thank you for that. Appreciate that. Jumping into the market, it’s it’s interesting. Look, I wanted to kind of I wanted to put a positive spin on some things out there. Dave recording yesterday, the Mercury came out with a huge headline on the front cover.
Aaron
A drop in housing prices could be pretty dire out there for people. What I want is a.
Patrick
Big heading to it took up like half the front page of the newspapers.
John
How you sell papers, baby.
Patrick
But then I had to remind myself that nobody reads the newspapers. I think, like it’s a pretty negative page. It was.
Aaron
It was. And it’s interesting. Lots of the mass media out there is about the the trickiness of the market out there. You guys are working in it every day. You guys are even while you’re off. I know you’re getting phone calls and yet you’re always working even if you’re up the east coast of Australia. Still plugged into the system?
Patrick
Unfortunately, yes. Always still playing around. Yeah.
Aaron
What are the conversations that you guys are finding out there at the moment? Like we could run through a bunch of stats here about how the market was booming. It’s kind of gone back to pre-COVID levels. We’re talking corrections in the past. It does seem to have shifted and when there’s big headlines like that, it does seem to lead people to kind of hit the panic button.
John
Yeah, yeah.
Aaron
What’s happening out there? Hit us with what? You talking to your vendors about what? You’re talking to buyers about what’s what’s the story that you guys are finding as your truth?
John
Well, I’d say the the fear of missing out is going into the market. So on a general sense, we heard back three years ago, two years ago, the buyers were in that emotional sense, thinking, God, I have to buy now, otherwise I’m going to miss the boat. So it’s that real driver of prices emotionally where they feel they just have to buy something.
Patrick
And it’s understandable because I think between 2017 and now it was like 93% prices very so for people that were trying to buy between over the last couple of years, every month they waited, they’ve had to pay more money to.
John
Where it was made.
Patrick
So that’s why those that real sense to try get things done a.s.a.p because they were worried that, you know, if it takes me six months to buy a house and people are going to spend another $50,000 doing it.
John
Boom, I kind of afforded it.
Aaron
So I went in the inverse of that now where every month I’m not buying. That’s right. I’m going to be paying less. Is that the vibe that’s out there on the street?
John
That’d be that’d be the sentiment that we have. From my experience. The way they look at it is, look there. There’s no more rush now. There can be a little bit more patient. What else have you got? I’ll just wait. I’ll. I’ll see what happens, you know? So whereas before, it’s like I have to get in, it’s like, I’ll see what happens.
John
Oh, good. RUSH So for us, you know, even one of our properties, it’s we’re reconnecting with a buyer 3 to 4 weeks later, it’s going to purchase it. And they were they needed that little bit of push static because that house was still available. We’d had a price adjustment and now they’re like, okay, that’s fair value. Now I’m going to go for it.
John
And so from in terms of that activity, we’re seeing it more as a sort of a balanced market slash buyer’s market. We’re now sellers, if you if would say, look, if you want to have a crack at a price in this current market, I could probably guarantee that you’re not going to get it. And that’s where they’ve seen their capital growth.
John
And then they’re trying for even more, you know, but the buyers just aren’t in that same headspace anymore. So for the sellers that are selling, while I’m suggesting make sure you’re committed to the sale because it may not have that same price expectation, you could have got it.
Patrick
Also depends on how long that particular person’s own the property. If you only on the property for say 24 months, then you’re probably going to bunker down and hold onto it for a bit longer. If you can afford to, because you are probably going to lose some money on it. But if you’ve owned it, you know, for five or ten years, like you’ve had exceptional growth.
Patrick
So even if the prices do come back as what the mercury argued, you know, 20% or whatever.
Aaron
Less, then.
Patrick
Yeah, actually I think it worked out a 10%, ten.
Aaron
Percent to 10% was.
Patrick
Yeah. So we’ve had 93% price growth in the last five years and they’re predicting it’s going to come back this year by 10%. You are still making a lot of money.
John
You’ve done okay.
Patrick
Yeah, yeah. So you just need to remind yourself of that. And the third thing to remember is, like we always say is you’re buying and selling in the same market. It doesn’t matter what you pay for the property and what you get for your property because it should balance out. Yeah, you come on stock way up, you sell and then you rent for a while or you don’t get back into the market straight away and the market shifts and goes the opposite way.
Patrick
Then you can come, I guess, let slip short.
John
Yeah, absolutely. And it is interesting where from our interaction with buyers, the rate shifted to being much more comfortable about just indicating interest below the asking price, which is reasonable because this suppose before they’re expecting it to go up and they’re expecting it to go down at this point. So as opposed to instantly offering more, you know in Tasmania we shifted very much to offers over and we might find that, that, that we discussed it as I was meaning the other day where we might start shifting the way in which the properties are advertised, moving back to fixed prices or offers around or different adjustments just to meet where the buyers are.
Aaron
Yeah, it’s funny to go. Ever since I’ve been working on the media side of things it’s been at this offers over language is being used on all the pricing since 2018. It looks.
John
Easy.
Aaron
It’s been like that and then you’re hearing kind of some of the conversations around the office, like I’m thinking about doing a buyer’s range of you know, like the lower end of the spectrum, the high end of the spectrum find the right price in the middle of it. And I was like, Oh man. Like, Yeah, there is a change.
Aaron
I’ve never seen it like this before. It’s really interesting to see how the conversations are kind of navigating this thing or a few people have been setting like, here’s the set price. You pay this.
John
You get, what would you undertake? What’s on the paper?
Patrick
Yeah, yeah. It is going to be interesting marketplace. Like, you know, the big four banks have all predicted pretty big losses this year ranging from anywhere from 8% right through to 16% price drops, which once again stress we are 93% up. So still you’re making money if you are selling this market. But then you move across to some of the economists and they’re predicting a different story like Nino’s got here in these nights that Eskom research is actually predicting 3 to 7% growth in most capital cities, providing interest rates don’t go to sky high.
Patrick
Yeah, so I.
Aaron
And was there a quarter of a percent rise yesterday or half a percent rise?
Patrick
Was that one of the most top listening, you know, know? It’s too scary because I’ll be going I’ll.
John
Get the letter from my banks.
Patrick
Every month. I’m just like, oh, it’s more money. But it’s, it’s just interesting as to who is predicting which way the market will go.
Aaron
Yeah, I guess as I was reading through some of the notes, I was thinking about how by some press ltd proper geology. I know there’s some info in there, but yeah, he often says that kind of. Yet looking at all this data is at those big centres of Melbourne, Sydney. Our kind of market here in Hobart is, it’s slightly different.
Aaron
And then in some of his notes he’s predicted, you know, Hobart, Burnie, Devonport, pretty good spot to still continue to look. I might have misquoted him then but he’ll be fine with it.
John
I’m sure if.
Patrick
You’re in Devonport and it’s pretty cool. Yeah.
Aaron
I just don’t know if it’s because.
Patrick
We don’t have offices in Burnie, Devonport, no. But I think for me if I was thinking about buying in the marketplace, I think there is a window of opportunity there today. Like I think there is a sense of people being a bit worried out there in the market at the moment. That worry will disappear at some point this year.
Patrick
Yep. So if you’re brave enough to bite the bullet now and say, yes, I think you can secure a pretty good deal. But I do think there will come a point at 2023 where everyone realises that this is the new normal and as will get on with my life, might as well go back and buy property. And that’s when you’re going to get unstuck and not get those really good, I guess, opportunities to negotiate and get a good price.
John
Yeah, absolutely. And I guess I would think it’s still very much a numbers game. So for a couple of times when I’m trying to help friends buy property, at the moment it’s well, you know, he’s in a difficult situation where it’s he’s there’s different there’s high levels of competition at very different price points. He is him and his family are looking for their second home.
John
They’ve been in the market for a while, but they’re going to come under that home share scheme and anything up to 500, they just really having a hard time because it’s still that at 470 to 500 and northern suburbs for a three bedroom house like that’s still accept that’s shows really exceptional value. Yeah and they’re getting beaten time and time and time and time again.
John
But then once we move into the sort of five, 50, 600, I’ll just speak for Glenorchy specifically. Yeah.
Aaron
Yep.
John
That’s perfect. The that’s when there’s a real slowing because the median started to shift back from 600 from 2022 back into 2021 is looking at about 555, 550 and so unless the properties are immaculate, it will find a little bit harder to be able to move that quickly if there’s, you know, work that quote unquote needs to be done.
John
So we’re still got a lot of competition for finished homes, but anything that requires a fair bit of maintenance people are being a little bit more cautious about because of the rising cost of what they’ve got.
Patrick
Lucky neighbours going in. I’m up.
Aaron
I was about to say the exact same thing that.
Patrick
Did me up today.
Aaron
We’ve I have tonight with my neighbour.
John
Know what.
Aaron
We’re talking about in last year my neighbour across the road he’s who’s been selling kitchenette a bit of work. He hadn’t painted the side of the house just by being a painter, but, but the good news is he’s fixed up the backyard. He’s gone and painted the whole house through like it was. Some quite elaborate colours will say eccentric could be another aware that we could use creative colours has now kind of minimised the the palette to be a bit more nice.
Patrick
It sounds like he has listened to episode 12 with the property part I reckon it’s probably yeah.
Aaron
He’s been no. Well so he hasn’t changed. He doesn’t read the newspaper, he doesn’t have Facebook. He’s, he’s just a man of the world.
John
Yeah.
Aaron
So he’s not reading that the market is shifting. So his expectations every time he’s added to his prices. So he was appraised at 490, he’s like no I want 520. Mm. Okay. I will try and achieve that. Oh his agent is not us. Will try and achieve that every time he’s added he’s added a ten grand to the price.
Aaron
So now his expectation is that like 570 I won’t sell for less than 570 and he’s coming over. It’s coming up all the time. I’m I’m trying to be a parent, trying to be a parent about and it’s like ask eBay. This question was like, I still don’t know the answer to any of this, but my layman’s version of this is it’s not your idea.
Patrick
Like you haven’t.
Aaron
Had much interest at 520, so you’re not going to get extra interest at 570 because you’ve done a few extra things. But yeah, I’ll talk to your agent. Hopefully your agent can help you out. Your neighbour can.
John
Yeah, I’d heard that before. You know, it’s like, Oh, mate, maybe we’re pricing it too cheap and people think there’s something wrong with it. But mate, it’s not, you know, you’re not fine. Art, I could say it’s a house doesn’t work on the same philosophy.
Aaron
But just in another update from my street and issues that we had where we were talking about the guy with the really long grass. Yeah that you could I go and offer to mow his lawn just on the off chance that would make my straight look better and have better straight appeal. Not the worst house on the street.
Aaron
He has done such a good job at whippersnapper ing it. He’s been out in his tiny little short shorts. He’s got like the little stubby shorts with these tiny little white stick legs. Sarah went by that to now the dog walking the dog. She said, It’s looking really good, mate, and the smile on his face. So he must.
Patrick
Be getting ready to sell her. Reckon.
Aaron
Yeah, it will be interesting. Yeah. He has done an immaculate job, so my street is looking cracker. There’s a house opposite me that’s for sale for about 570 if you’re interested.
John
Because your neighbours lawns are amazing. Yeah, it could freshly painted. It could have been like me. Like I. My grass is the worst and straight for ages because I just didn’t own a lawn mower whippersnapper for ages where we weren’t living there. But now it’s it’s always kept level as a reminder do the same same routine.
Aaron
Now you kill it off.
John
Yeah it’s all budgets burnt it just so far the lawns I’ve.
Patrick
Managed to turn my nice green rental grass into straw.
John
Fantastic.
Patrick
It’s a dog garden. No more, John.
John
It’s water.
Patrick
It’s fine. Yeah, it’s. It’s crunchy straw down. Yeah, we’re going.
John
To see less minus for you my.
Patrick
Mother once and now she doesn’t amount in more.
Aaron
The hardier. Well, look, guys, it’s great to be back in the studio. It’s of an interesting year. Yeah, just market wise. Things are changing. It’s going to be interesting. We’ll try and keep a positive spin on it like we do here in the studio. But yeah, be interesting to kind of pick the brains of other people out there of how they’re finding themselves.
John
Well, I was only thinking about it this morning when just it’d be interesting to listen to moments like the conversations we had when the markets were very, very different and like what was the advice, etc., that were saying at the time?
Aaron
I’d love just to listen to the smack that we talk.
John
Yeah, it could.
Aaron
But you could probably skip 90% of it. We just need like a podcast, paraphrase it, it’s like it takes all the rubbish out and then get a two minute byte of really good information.
John
Yeah, yeah. I’m with you, man. Yeah, it’s. It’s this big shift. I mean, the way that we’re operating is changing. So familiar practitioner’s perspective. The conversations definitely are different. And I’ll be interested to see how the map over the next six months.
Aaron
100%. 100%. Well, welcome back. It’s good to be back. We’ll be back weekly. That’s our promise from here on out and will say on that lot. And that’s the property pod for the first episode of 2023. Thanks, guys. See you!
[extro]
