Never a state for wild fluctuations, Tasmanian values have remained fairly steady in a down market. Expect more of the same, although some new projects could spur growth.
Tasmania doesn't get infrastructure projects on the scale of other states and territories. There are no major mining sites like the mainland, and the small population rarely constitutes enough demand for construction of large projects.
However, the flip side is that Tasmania's small size and lack of development into its dense forests means that when there is a project, even on a smaller scale, it can have a significant impact on property values. From the proposed pulp mill in Georgetown, to the proposed the tourist road in The Tarkine, to even individual golf courses being built along the coast, there are plenty of possibilities for growth in Tasmania - even in once isolated areas.
"Both [the pulp mill and tourist road] projects are in areas that have some beautiful homes at affordable prices that will be tempting propositions for many," says David Harris, franchise manager of Victoria/Tasmania for LJ Hooker. "Further, it is important to remember that when people move to an area, infrastructure and services generally get improved and this then attracts even more people."
Rob Zubin, principal buyer's agent at My Property Hunter, says that outside of environmental concerns voiced by a segment of the state's population, these projects and others will benefit on the Tasmania economy and property market.
"If these developments proceed, they will have an impact on work opportunities, which will have a flow-on to demand for properties," he says. "Other activities will all add to the general demand for property in the area, for increased employment will bring opportunities and people securing investments where there's a high demand of rentals."
Like elsewhere, the Tasmania property market has benefited strongly in the lower end from first homebuyers. "Both in Hobart and Launceston, there's been a heavy reliance on first homebuyers to maintain property values in those areas," says Zubin.
That's put the pressure on investors, who have found stiff competition in the most attractive areas around major cities. "For investors, there are still quality investment properties out there, but you just need to try to a bit harder and find the right areas to look," says Zubin.
Harris agrees that investors can still find good buys, but they have to work a bit harder. "In the last decade, fortunes were made by many people in property investment without a great deal of effort because it came largely from the phenomenal rates of capital growth," he explains. "They simply bought and their investment grew almost as if on 'power feed.'"
In Launceston, Zubin says the most popular areas lately have been in the northern suburbs such as Invermay and Mowbray, while in Hobart it has been Glenorchy and Claremont where investors have been seeking returns.
"I can't forecast the future, but my feeling is that the homebuyer market will eventually slow down considerably and investors will have a wider range of options to choose from," says Zubin. "There are already opportunities for investors, with increased demand for rentals across the state." Government housing has not met demand, he says, putting pressure on the private stock to meet the growing number of tenants.
But in terms of capital growth, there has been little at all, if any, in many parts of Tasmania. "It's a flat market," says Zubin, predicting it will remain that way at least until October. However, he says it will pick up soon after, as the market forces of demand, backed by migration, will maintain property demand.
The key will be a return to consumer confidence in Tasmania, which currently is sitting very low, says Zubin. "A lot of the attitude towards buying properties will sit with consumer confidence," he says. "That confidence needs a dramatic increase."
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