The Mercury - July 2008
Hobart house prices slump
HOBART recorded the biggest fall in housing prices of any
metropolitan market in Australia last month
Hobart house prices fell 2.24 per cent and units 2 per cent.
However, the news was not all bad.
In the 12 months to June, Hobart house prices grew 11.96 per cent and
unit prices rose 11.61 per cent.
House and unit prices in nearly every city and regional centre in
Australia fell last month, property analyst Residex found.
The last time house prices fell in all states was just before the Great
Depression.
The slump is affecting the top end of the market as well as the lower
end.
Residex chief executive John Edwards said: "It looks like we are moving
into a one-in-100 year event.
"It points to a situation where unless the Government and Reserve Bank
take action, Australia could move into a recession.
"The only other times this has ever occurred were before we have moved
into severe recessions.
"Never in my lifetime have I seen so many converging negative events."
His gloomy predictions were not supported by Real Estate Institute of
Tasmania chief executive Martin Harris and Housing Industry Association
Tasmanian executive director Stuart Clues.
Mr Harris said a drop in sales and values across Australia had occurred.
"But the good part from Tasmania's perspective is the negative impact on
us is likely to be minimal compared to Victoria and NSW for example," he
said.
"I would expect no more than a
5 to 10 per cent adjustment drop in the market."
Higher interest rates were hurting some people but there were not mass
mortgagee sales in Tasmania, Mr Harris said.
The Tasmanian market was slightly more insulated because "historically
Tasmanians have not mortgaged themselves to the hilt", he said.
Mr Harris said fears of a recession were over the top.
"It's a pretty gloomy reaction, an overreaction, to say the least," he
said.
Mr Clues said lending for housing had fallen for three consecutive
months in Tasmania -- March (down 8 per cent), April (down 3 per cent)
and May (down 20 per cent).
But he said the "whopping" fall recorded in May was not expected to
continue.
"We would not support a doomsday-type event and housing prices going
into free-fall," Mr Clues said.
"In Tasmania we have seen steady growth, not a massive boom, for the
last five or six years."
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