This transcript was generated automatically and may contain small errors.
You have a $750,000 budget and two cities have caught your attention, Keynes and Hobart. Keynes' house market has grown by 17% in the past year, compared with Greater Hobart's 5%. So Keynes seems to be the obvious choice, right? But choosing purely based on recent growth could be a costly mistake. Keynes has been booming for years, while Hobart is just starting to recover.
So would you rather buy into momentum or into recovery? Let's let the data speak. Now we have a budget of $750,000 and two cities to choose from, Keynes and Hobart. Let's have a battle between them and see which market we would rather buy in. First round, median price.
Keynes has a median price of $745,000. Here I'm talking about the south part of Keynes, which is the more established area. If you're talking about the north coastal part of Keynes, prices can be more expensive. And Greater Hobart, we have a median price of $767,000, slightly higher than our budget, but it also depends on where we're looking at. If you look at Hobart City or the south part, it might be more expensive.
With median prices of over $800,000 or even $900,000. If you look at Hobart's northwest, which is the LGA area of Glenorchy, their median house price is just $671,000. So plenty of options to allow us to buy a house within our budget. And now in terms of growth, as we have mentioned before, Keynes' last one year growth was huge, 17% in a year, compared with Hobart's just 5%. This is also dependent on which part we're looking at.
If you're looking at the more affordable area, such as the Glenorchy area, the past one year growth was actually not bad, 13% in a year. So purely based on recent growth, it seems that Keynes is definitely a winner because the growth momentum is stronger. But is it the obvious winner? As we know, when we assess markets, we cannot just look at one or two indicators or metrics in isolation. We need to look at things from a more holistic point of view.
So that is why before we draw the conclusion, we want to look at more metrics. And now let's look at them from the economic conditions, demographics, to the current sales market pressure, rental market pressure, to the cycle position before we call our winner. So now economy. Keynes has a population of 180,000 and a 1% growth in the past financial year. And Hobart has a larger population size, which is 255,000, but the growth is slower than Keynes, which is 0.
2%. As we know, in recent years, Tasmania has been one of the lowest growing states in terms of population. And now on the screen, I'm showing Keynes and Hobart's top five employment industries. As we can see, neither of them has a one single dominating industry in their economy. And that means job market is not dependent on one single industry's dynamics and would be more resilient to economic shocks.
And at this moment, both job markets are quite healthy. Keynes' unemployment rate is 4. 7%, slightly lower than its long-term average. Similarly, Hobart's unemployment rate is sitting at 5. 2%, also slightly lower than its long-term average.
So in terms of economy, both of these economies are healthy and resilient. So I wouldn't make a call who's winning just based on the economic conditions. And now let's look at the sales market pressure in both of these cities. At the first glance, both markets are seeing very tight supply. In Keynes, inventory is now 1.
7 months of stock and Hobart 2. 0 months of stock. But the trends are slightly different. Keynes have been booming for years. The supply levels have been quite tight in the past three, four years.
Recently, there has been an increase in inventory levels because of the rise in for sale listings. That is very much in line with many cities across the country, especially the relatively investor-heavy markets as sentiment drops and investors or overall buyers are more hesitating when they make purchases. But in Hobart, it's different. Inventory or supply levels have been steadily trending downward over the past two years as the market recovered. And in recent months, we actually do not see a noticeable increase in number of for sale listings.
That is why the inventory levels is still steadily trending downward. And now days on market, how long houses are spending on the market before they're sold. Keynes as a typical hotspot market, the days on market has been steadily low at around 15 days over the past two years. In recent months, in terms of a three-month rolling median, we also see this increasing trend in Hobart's days on market. A quick summary of the sales market.
Both sales markets are tight in supply. Keynes has always been tight and now showing some signs of loosening because of the recent sentiment drop. While on the other hand, Hobart's supply has been tightening and the recent sentiment drop is not affecting supply levels as much because of how tight the stock is being held. Now, rental market. Again, there's something different in the vacancy rate trends in these cities.
Keynes as a hotspot market for many years, the vacancy rate has always been low at around 0. 5, 0. 6% levels. And because of the tight supply, the rental growth has been steady over years. Even in the past year, after many years of a rental surge, it has still achieved a 6.
8% annual growth. In comparison, Hobart lost some momentum between 2022 and 2024. And that time we did not just see slow price growth or even decline. We also saw a surge in vacancy rate. But in recent two years, vacancy rate has come down.
As we can see in this chart, there was a significant decline from 2024 to 2025. And now it is sitting around 0. 3%. And rental growth in the past year was also very healthy at around 5. 3%.
And now another very important metric for investors, yield. Keynes generates a healthy gross rental yield of 4. 9%, while Hobart's gross rental yield is around 4. 5%. Again, just like prices, yields also vary from one region to another.
For example, the Glenorchy area we just talked about, the prices are lower, so the rental yields there are healthier compared to the more expensive areas. The current median yield in Glenorchy is 4. 9%. Sounds similar to Keynes. And when we talk about yield, it's important to remember that gross yield is just one number.
And in practice, we need to consider net yield with all the holding costs in consideration as well. And when it comes to net rental yield and North Queensland, we have to keep in mind that the holding costs could be higher because their council rates are higher, their insurance premium is higher, their property management and maintenance costs could be higher as well. So when we make the decision where or which market to invest in, it is important to do our research on all these small things as well, not just the data on paper in our market research. A quick summary for the rental market. Both rental markets are tight with extremely low vacancy rates and healthy rental growth.
Gross yield is better in Keynes compared to Hobart, but when it comes to net rental yield, depending on the actual calculation, it is possible that they may end up with very similar net rental yield levels. And now before we get into the cycle position comparison, we'll quickly talk about their income and supply levels. Both are actually healthy. Keynes' new house building approval rate is now around 2% and it has been increasing in the past three years. It is understandable because as the market is hot, more developers would be incentivized to build.
And in Hobart, house building approval rate is now around 1. 5%. It's been low at this level for years, just in line with its inactive sales market. And this consistently low new building construction level could be one of the contributors of the current tight supply conditions in Hobart. Now let's talk about cycle position.
And this could be the largest difference between the two markets. On the screen, you can see the trend lines of these two cities' 20-year median house prices. In the first 10 years, from 2006 to 2016, the two lines were almost in line with each other. The difference started in 2016 when Hobart boomed while Keynes stayed relatively steady. Keynes started booming in 2021 and that boom has continued until now.
While Hobart's boom stopped in 2022, experienced a three to four years correction phase, and now it seems to be entering a new phase of growth. This chart clearly shows the difference in cycle position of these two markets. Keynes has been booming for multiple years and is now in the second half of its current growth cycle. While Hobart has experienced a correction phase and is now just starting to enter the next growth cycle. So after all these rounds of comparison, I believe you and me both have a conclusion in our mind.
And that would be there's no obvious winner. Both of these markets can be good, but they are for different types of investors or different portfolio needs. Keynes being at the peak of its growth cycle, it can deliver immediate fast growth. But looking ahead, there could be less growth left compared to Hobart. While on the other hand, Hobart, it is just recovering.
It might be generating less or lower immediate growth at the moment, but we're looking at an entire growth cycle ahead and potentially higher total growth in the coming two to five years compared to Keynes. However, we'll need some more patience than buying in Keynes. So this comparison between Keynes and Hobart actually teaches us a important lesson. And that is there's no one single best market for everyone.
