The Tasmanian property market is considered to be the steady property performer with the state leading a national recovery in new home construction, house prices reaching their highest ever median price and rent rises in Hobart leading the nation.
Ongoing land supply shortages lead to a massive jump in land prices for the state, with recent subdivisions selling quickly.
As predicted in our previous Property Outlook, median property prices continued to increase in the first six months of 2010.
Although there has been minimal activity from first home buyers so far this year, they have been replaced by second home buyers, and while investors are still low key in the marketplace, they do currently outnumber the first home buyer.
The North-West Coast economy is in a fairly precarious state, with the effect of large plant closures such as ongoing job losses, still playing out.
Vacancy rates have risen in the last six months as renters become first home buyers.
In the coming six months, the market will remain much the same with the number of sales possibly declining slightly, but prices remaining steady, or increasing in major population areas.
Bargains are still to be found in the state, with Tasmania being one of the most affordable places to live in Australia, along with its many lifestyle opportunities from sea change to tree change.
Building is currently slow and the ongoing shortage of builders and other skilled labourers continue to affect growth.
There is the potential for mortgage stress in the major populated areas, particularly if the Reserve Bank starts increasing interest rates by more than 0.5 per cent. All Tasmanian respondents expect interest rates to continue to increase, by up to 1 per cent.
Due to its affordability and rental yields (currently remaining steady at 4.9 per cent), Tasmania will again lure investors, especially given other states’ legislative changes such as extra property taxes and proposed new tenancy laws.
While Tasmania does not enjoy the huge increases in capital growth of some of the other states, it does offer affordability, investment stability and is less likely to experience the big property bubble bust some commentators are predicting.
