April 21, 2019 | 05:13 PM

Property & Home

02.08.2018Property market round-up: Focus on Tasmania

At face value, the property market in Tasmania is looking buoyant at the moment. Statistics show that values are significantly on the rise.

At face value, the property market in Tasmania is looking buoyant at the moment. Statistics show that values are significantly on the rise, and there’s clear evidence that cities like Hobart are substantially outperforming mainland state capitals. However, there are some slightly more worrying figures too – and it’s far from certain that Tasmania’s position as a property hotspot is going to last. This article will explore those figures, look at the reasons behind them, and forecast what might be next for the Apple Isle. 

The basic figures

When the baseline figures are assessed, it’s clear that many homeowners in Tasmania have a lot to be positive about. In Hobart alone, there was a rise in values of 3.2% over the course of the quarter running up to February 2018. While that may not seem like a large amount, it’s actually a substantial rise compared to changes seen in other state capitals. Perth, for example, saw a drop of -0.7% during the same period, while in Melbourne the drop was -0.4%.

Of course, growth rates in Hobart need to be placed in their proper context. Residential property sales in 2017 accounted for around 1% of all sales across the whole of Australia, meaning it wouldn’t be a great choice as a bellwether for the entire country. But for a homeowner on the ground in Hobart, that’s not relevant. House price value rises of over 13% in a year, which the state capital saw in the twelve months up to February 2018, are phenomenal.

Reasons for growth

There are various reasons for the strong performances in Tasmania’s property market recently. Changes in the state’s economic fortunes are partly responsible. Jobs are seemingly more plentiful in Hobart than they were before, and the state has had a healthy amount of tourist activity in recent times.

But when these types of economic growth hit an area, they’re not usually the only cause for a shift in the property sector’s performance. Often, a major reason is that the rise in jobs means investors spot an opportunity and swoop in to provide buy-to-let or resale properties instead. And in Tasmania, that’s certainly been taking place.

What does the future hold?

Despite these positive figures, there’s a sense among some in the Tasmanian property sector that things may be about to dry up. Although there’s been a rise in prices, the rate of sales has actually slowed down. And across the whole state there’s been a drop of 5.4% in the number of properties shifted off the market. 

Even though price rises are good for sellers, they’re not so good for buyers. According to bosses at the Real Estate Institute of Tasmania (REIT), this is bad news. "Prices are getting high and people are starting to say, 'Well, enough is enough'," Tony Collidge, President of REIT, is quoted by ABC as saying.

"I think prices now in Hobart are at a level where a lot of the locals are thinking: 'Do I really want to pay that much for property?’" he added.

Tasmania’s property scene has clearly been on an upswing, especially when compared to some of Australia’s mainland states. Figures reveal a substantial rise in house price values here over the last year or two, and this has been accompanied by an upbeat economic outlook and plenty of investor assistance.

But this strong performance shouldn’t be interpreted as an indicator of long-term good news, or confused with property market performance for Australia as a whole. There are signs that a lack of supply could be behind price growth, and the local real estate sector isn’t feeling positive. What’s more, Tasmania represents just a small part of the overall national property market anyway. On the whole, it’s likely that observers will simply need to wait and see what the future holds for Tasmania’s property sector. 

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