Market Report Tasmania (May 2009)


Tasmania seems immune to the booms and busts of the mainland. It's remained steady going here, even when times are tough in the national economy.

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Investing in Tasmanian property is often one of the safer bets in Australia. It lacks the glamour of Australia's eastern coast, and misses the potential gains of various mining towns. But this island has turned out to be one of the surest capital gains producers in the Australian market.

Not only is it easily still priced at the lowest level of affordability, it's also proven to hold some of the most stability.

While others have been rising and plummeting, Tasmania has continued its steady pace ahead, rarely faltering. Over the past 10 years among capital city house medians, only Perth has shown better growth in house values, at 12.7% per annum, to Hobart's 12% per annum, according to Residex. And considering Perth's latest drops in values, Hobart might eventually take that top spot.

"Tasmania was not as affected by news of the economic downturn, and their population growth has held well - this is critical to maintaining demand," says David Harris, LJ Hooker franchise manager for Victoria and Tasmania.

But like most of the rest of the country, the last year in Tasmania hasn't had much to show for yet in capital gains. The good sign in fundamentals is that it is seeing an increased level of residents from other parts of Australia pour in, lured by the lower prices and relaxed lifestyle.

"This trend may be attributed to a 'tree change,' as residents on the mainland considering retirement sell their homes and downshift to Tasmania," says Angie Zigomanis, an industry analyst and economic forecaster for BIS Shrapnel.

BIS Shrapnel has predicted property prices in Hobart to rise by an average of 15% during the next three years. Harris says there's good reason for optimism going forward, as well.

"Tasmania is very affordable, and as other states begin to experience rapid price gains, investors and those looking for a tree change will certainly look to take advantage of Tasmania's affordability and the stress-free lifestyle in the stunning, unspoilt natural landscape," he say

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