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Have multiple years of the best growth percentage in the country left Hobart buyers tired? Picture: Supplied

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New predictions for Hobart’s property market say the city’s typical home could be as much as $40,000 worse off by the end of this year.

In the latest Outlook Report, economists at PropTrack have forecast a 3-6 per cent decline by Christmas.

This could knock up to $40,800 from Hobart’s July median dwelling value of $680,000.

While an eye-popping number, the 3-6 per cent is a revision from the previous Outlook Report that forecast a 6-10 per cent pricing slide.

PropTrack’s current prediction for the end of 2024 is a 1-4 per cent decrease.

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PropTrack economist Angus Moore said part of the story is that Hobart prices have not recovered yet in the same way other cities have.

“In part it is about momentum. When prices are falling, that is a reasonable predictor that they will continue to fall, at least for a while,” he said.

“Relative to average incomes, Hobart is an expensive city now. A lot of that was driven by demand during the pandemic.

“I would expect Hobart to be softer than the national average for the next six to 12 months.”

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Propertyology’s Simon Pressley.

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Propertyology head of research, Simon Pressley, said the decrease in home prices and activity in Hobart this year came back to something rare: buyer fatigue.

“Hobart was the strongest market in Australia from 2015-2022 by a long, long way,” he said.

“Over that time, it had more than twice the rate of growth than was recorded across most of Australia.

“The main reason for this was Tasmania’s economy firing on all cylinders. And it remains strong today.”

Mr Pressley said with strong fundamentals, an increasing but still relatively small number of homes for sale, plenty of jobs and rising wages, people could have confidence in Hobart.

“If you have owned a home in Tassie for three years or more, despite 2023’s downturn, you’d be sitting on some pretty spectacular equity,” he said.

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PropTrack economist Angus Moore.

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Meanwhile, the latest PropTrack’s Home Price Index showed that greater Hobart’s median dwelling value — houses and units combined — was $680,000. In February, it was $713,000.

Mr Moore said lower prices for a first-home buyer may mean it is easier to save a deposit.

“However, the increase in interest rates has reduced borrowing capacity by a lot more than how far prices have fallen,” he said.

jarrad.bevan@news.com.au