Derwent Valley Property Market Update 1st Half 2024
In Q4 2023, Derwent Valley recorded a median house price of $461,000, and a median vacant land price of $195,000. This represents annual (Q4 2022 – Q4 2023) median price growth of 7.2% for houses and a softening of -6.7% for land. Total sales decreased during this time, by -15.0% (to 34 sales) for houses and by -66.7% for land (to 5 sales). The house market is in an undersupply, as price growth was accompanied by less sales. This is an ideal time for owners to capitalise on their investment. The vacant land market is more affordable at present, due to construction costs increasing. This creates an opportunity for buyers.
Average vendor discounts between Q4 2022 and Q4 2023 have moved to a lower premium of 0.2% for houses. This benefits buyers as although they must offer a premium above the first list price, it is at a lower level compared to 12 months prior. Vacant land vendor discount remained relatively stable, at -3.8%. Again, this benefits buyers, as sellers are willing to accept lower than the first list price. That said there is a very small land market in Q4 2023.
House rental yields in Derwent Valley was 4.7% in December 2023, much higher than Hobart Metro (3.3%). Median house rental price has held steady in the past 12 months to Q4 2023, at $480 per week, whilst the number of houses rented increased by 22.9% to 188 rentals. The same pattern can be seen in the unit market, which benefits renters.
4+ bedroom houses have provided investors with +3.6% rental growth annually, achieving a median rent of $580 per week.
Derwent Valley recorded a vacancy rate of 0.7% in December 2023, which is slightly below Hobart Metro’s 1.1% average. Vacancy rates in Derwent Valley¥ have seen sporadic growth over the past 12 months, due to investors entering/exiting the market as higher cash rates shape their decision / financial viability. That said a 0.7% vacancy rates is still very low, and significantly below the REIA ‘healthy’ benchmark of 3.0%. There is still quicker occupancy of rental properties, which benefits investors – even if there is a steady rental return.
