Tasmania’s property market, also known as the Tasmania property market, is gaining momentum, making it an attractive destination for both homebuyers and investors alike.
With a diverse range of opportunities across the island state, Tasmania offers a unique blend of affordability, growth potential, and lifestyle benefits. But what do you need to know before diving into this flourishing market?
This blog post provides a comprehensive snapshot of the current Tasmania property market, covering everything from median house prices and interest rates to regional gains and investment opportunities.
Tasmania Property Market Overview
The Tasmanian property market experienced growth in 2021 and is expected to continue in 2023, with factors such as low interest rates, population growth, and changing household preferences driving demand.
CoreLogic data shows that the island state’s capital, Hobart, witnessed an annual increase of 27.7% in dwelling prices. Meanwhile, regional Tasmania experienced an even more impressive rise of 29.8%.
Despite this growth, the ANZ Housing Forecast predicts that prices will decelerate in 2022 and decline in 2023, with an 8% cent increase in Hobart house prices expected for 2022.
Median House Prices
Median house prices in Tasmania have seen significant increases, especially in areas like Hobart and Launceston. For instance, in 2021, the median house price in Hobart reached $698,212.
Other areas, such as Mornington, West Launceston, New Norfolk, and Youngtown, also experienced considerable growth, with median prices ranging from $457,000 to $625,500.
These increases can be attributed to a variety of factors, including population growth, low-interest rates, and increased demand for housing. For those wondering about other prominent areas in Tasmania, there are various best places to live in Tasmania that cater to different preferences and lifestyles.
Interest Rates
Interest rates play a crucial role in the affordability of property purchases for both buyers and investors. Lower interest rates make borrowing more accessible, allowing individuals to secure property more easily.
As a result, these low interest rates have contributed to the growth of Tasmania’s property market in recent years, enabling more people to enter the market and take advantage of the opportunities available.
Potential buyers and investors should consult with their lenders to obtain the most current interest rates.
Market Trends
Current market trends in Tasmania include an increase in house prices and rents, a decrease in sales volumes, low vacancy rates, and increased interest from buyers. Additionally, the high-end segment of the market is experiencing growth.
These trends indicate a shift in demand towards regional areas and increased demand for affordable housing options. CoreLogic data also shows that downsizing is becoming more prevalent in Hobart and surrounding suburbs.
The impending arrival of an AFL team in Hobart is expected to have a positive impact on the property market. Moreover, for those interested in the most sought-after areas in the capital, there are reasons why North Hobart is considered the best suburb in Hobart.
Greater Hobart area, including the CBD and waterfront precincts, predicted to experience significant growth in the coming years. This presents potential opportunities for investors looking to capitalize on the growing demand in these areas.
Hobart’s Housing Landscape
Hobart’s housing landscape is characterized by moderate price increases, a healthy stock of properties, and strong investment yields. Despite the challenges posed by decreased interstate buyers, the city’s property market continues to thrive, driven by factors such as population growth, construction costs, and investor interest.
In the following subsections, we delve deeper into Hobart’s house prices, sale market, and investment opportunities.
Hobart House Prices
The present median house price in Hobart stands at $725,736, reflecting the strong demand and growth in the city’s property market.
While the ANZ Housing Forecast projects an 8% increase in Hobart house prices for 2023, it is crucial for potential buyers and investors to remain vigilant and monitor market trends to make informed decisions.
Factors influencing house prices in Hobart include population growth, construction costs, and investor interest. As a result, investment opportunities in the city are diverse, ranging from purchasing properties for sale to investing in rental properties and taking advantage of regional gains.
Sale Market
Recent data suggests that Hobart’s sale market has experienced a compound growth rate of -17.3% for houses and 0.6% for units over the past five years. This decline can be attributed to a decrease in interstate buyers, with a -7.2% decrease observed over the past five years.
However, the return of mainland investors to Hobart’s sale market has been significant, with an increase of 8.2% in the past five years.
This resurgence of investor interest is a positive sign for the city’s property market, highlighting the potential for growth and development in the coming years, including the possibility of million dollar sales.
Investment Opportunities
Investment opportunities in Hobart are abundant, particularly in the northern suburbs and areas within 10 to 15 kilometers of the CBD. Investors can consider purchasing and leasing residential properties, investing in commercial properties, or examining development prospects in suburbs like Sandy Bay and Kingston Beach.
In addition, the city offers numerous potential business opportunities, such as investing in retail, hospitality, and tourism businesses, as well as exploring opportunities in the technology and creative industries.
With a diverse range of investment options available, Hobart’s property market presents an attractive opportunity for both local and interstate investors.
Regional Tasmania: A Growing Market
Regional Tasmania is experiencing growth in property demand, driven by strong rental growth and a focus on affordable housing options. The year-on-year increase in demand for regional Tasmania is impressive at +70%.
In this section, we will explore the opportunities and challenges in North West Tasmania and the regional gains observed across the island state.
North West Tasmania
North West Tasmania is attracting increased interest from buyers and investors, with areas such as Central Coast and George Town performing well.
The median sale price on the north-west coast is $379,000, and dwelling prices in the North and North West of Tasmania have achieved an increase of +20-30%.
This growth can be attributed to a variety of factors, including the region’s focus on affordable housing options and strong rental growth.
The success of regions like Glamorgan-Spring Bay, Central Coast, and George Town this year highlights the potential for further growth and investment opportunities in regional Tasmania.
Regional Gains
Regional gains in Tasmania have been most significant in areas such as Glamorgan-Spring Bay, Glenorchy, Hobart City, and Sorell during the same period.
These areas, including the capital city, have experienced consistent growth and development, driven by factors such as population growth, affordable housing options, and strong rental demand.
Investors looking to capitalize on regional gains should consider these areas when exploring investment opportunities in Tasmania’s property market.
By focusing on regions with strong growth potential, investors can maximize their return on investment and contribute to the ongoing development of Tasmania’s thriving property market.
Challenges and Opportunities in the Tasmanian Market
The Tasmanian property market faces challenges such as high construction costs and a lack of investor interest, but opportunities exist in population growth and affordable housing options.
In this section, we will delve into the challenges and opportunities faced by the Tasmanian market, exploring construction costs, investor interest, and the impact of population growth on the housing market.
Construction Costs
Construction costs in Tasmania are high due to increased costs of labor and materials, impacting property prices. The average cost of constructing a home in Tasmania is approximately $285,000, but this figure can vary depending on factors such as the size and type of the property, materials, location, and design choices.
Potential fluctuations in construction costs should be considered when investing in the Tasmanian property market. By remaining vigilant and aware of these factors, potential buyers and investors can make informed decisions and take advantage of growth opportunities in the market.
Investor Interest
Investor interest in Tasmania is limited due to price slumps and high living costs. However, the current investor interest in Tasmania’s property market is notably high, with some suburbs experiencing remarkable growth.
Tasmania has witnessed recent growth in property prices, with the median house price in Regional Tasmania reported to be $575,000.
Investors seeking to enter the Tasmanian property market should consider factors such as population growth, construction costs, and the accessibility of other rental alternatives.
By evaluating these elements, investors can identify promising investment opportunities and contribute to the ongoing growth and development of the market.
Population Growth
Population growth in Tasmania is driving demand for housing, particularly in affordable areas. As of 31 December 2022, Tasmania’s population was estimated to be 2,876 persons higher than the year prior.
This increase in population has stimulated demand for housing, with prices rising in response to the growing need for affordable housing options.
Investors looking to capitalize on population growth should focus on areas with strong demand for affordable housing. By targeting these areas, investors can maximize their return on investment and contribute to the ongoing development of Tasmania’s thriving property market.
Tasmania’s Rental Market
Tasmania’s rental market is characterized by low vacancy rates, leveling weekly rentals, and strong investment potential in select suburbs. I
n this section, we will explore the current state of Tasmania’s rental market, focusing on rental vacancy rates, weekly rentals, and the best suburbs for investment.
Rental vacancy rates in Tasmania are currently at an all-time low, with the most recent data showing a per cent decrease in available properties.
Rental Vacancy Rates
Rental vacancy rates in Tasmania remain below 1%, indicating a tight rental market. This low vacancy rate can be attributed to factors such as high demand for housing and limited supply.
In Hobart, the vacancy rate is approximately 1.87% according to PropTrack data, while Launceston has a vacancy rate of around 1.5% as per realestate.com.au data.
It is important to note that vacancy rates can vary over time, and potential buyers and investors should consult the most recent data for accurate information.
By monitoring vacancy rates, investors can gain insight into the current state of the rental market and make informed decisions about their investment strategies.
Weekly Rentals
Weekly rentals in Tasmania are leveling out due to a lack of supply and high living costs. The availability of weekly rentals is restricted, as many individuals are opting to buy properties rather than rent them.
Factors such as high living expenses, the cost of acquiring a property, and the accessibility of other rental alternatives are also influencing weekly rentals in Tasmania.
To capitalize on the leveling weekly rentals, potential investors should consider exploring different types of rental properties, such as furnished apartments, vacation rentals, cottages, and other accommodation options available for rent on a weekly basis.
Best Suburbs for Investment
The best suburbs for investment in Tasmania’s rental market include Glamorgan-Spring Bay, Central Coast, George Town, Glenorchy, Hobart City, and Sorell.
These areas have experienced consistent growth and development, driven by factors such as population growth, affordable housing options, and strong rental demand.
Investors looking to capitalize on the strong investment potential in these suburbs should focus on identifying promising properties and exploring various investment strategies.
By targeting areas with strong growth potential, investors can maximize their return on investment and contribute to the ongoing development of Tasmania’s rental market.
Summary
In conclusion, the Tasmanian property market offers a diverse range of opportunities for both homebuyers and investors, driven by factors such as population growth, low interest rates, and a focus on affordable housing options.
Despite challenges in areas like construction costs and investor interest, the market presents promising growth potential across both Hobart and regional Tasmania.
By remaining vigilant and informed on market trends and developments, potential buyers and investors can capitalize on the opportunities available in this thriving property market.
Frequently Asked Questions
Are house prices dropping in Tasmania?
House prices in Hobart are down 10 per cent from their peak in March 2022 and have fallen for four consecutive quarters, indicating a clear downward trend.
This is the steepest decline in Hobart’s history.
Is it a good time to buy property in Tasmania?
Given that median prices across Tasmania have likely already peaked and are expected to slow in 2022, it seems that now may be a good time for property investment in the area.
Despite this, ANZ forecasts an 8% rise in Hobart house prices in 2022.
What is the property market trend in Tasmania?
Overall, the property market in Tasmania is seeing a decline with median house prices dropping 2.5 per cent since March 2022 and 9.6 per cent fewer million-dollar sales.
Greater Hobart alone saw 18 fewer home sales compared to the same period the year before.
What is the property forecast for Tasmania 2023?
Property prices in Hobart are forecast to continue to decline, with a 9% decrease expected in 2023.
The median house price is projected to be $648,310.
What factors are driving demand in Tasmania’s property market?
Low interest rates, population growth and changing household preferences are driving demand in Tasmania’s property market.
This demand is being seen across the state, with Hobart, Launceston and the North West all experiencing strong growth. Prices are rising, and the market is becoming increasingly competitive.
