While all eyes are fixed on the impressive gains in Melbourne and Sydney, Tasmania is quietly outperforming its bigger rivals
Being so small and detached from the mainland states make it easy for investors to ignore the solid and steady performance of Tasmania’s property markets. Over the past 10 years Residex data showed Hobart has grown by 12.34% per annum – the best performing market in all of Australia.
Tasmania also performed strongly in the December quarter, with median house price hitting $300,000 for the quarter – the highest median price recorded to data in Tasmania according to the Real Estate Institute of Tasmania (REIT). This increase is equivalent to 4.2% for the quarter and 7.3% for the year.
Median house price for Hobart climbed by 6.5% to $370,000 compared to the previous quarter. Hobart was the only city in Tasmania that recorded an increase in sales, up 4.2% for the three months ending December according to REIT.
“The state’s economic activities and performance in the past decade and more recently has compared well to any economy of any state in Australia,” says Rob Zubin, Principal Buyers Agent, My Property Hunter. “Being the best value capital city property in the country, Tasmania and Hobart is currently drawing a lot of interest from investors and those wishing to migrate to the apple state from the mainland.”
David Harris, franchise manager, with LJ Hooker Tasmania & Victoria points out that being one of the most affordable markets in the country; Tasmania presents a lucrative option for investors.
“Tasmania’s solid performance in the face of the global financial crisis has been sealed further by a continued spate of great reports including the Commonwealth Bank (in January 2010) saying that Tasmania’s population growth continues to be the highest in the nation while the rate of unemployment and home-building is second best. In addition, the ABS data for November 2009 showed Tasmanian exports to China increased by about $260 million,” he says.
What’s selling well
Zubin says there is an ageing population in Tasmania that will require particular accommodation to meet their needs.
“This is a sector of the market that will continue to demand suitable and well priced property,” he says. “The lower and mid-sectors of the property market have responded well to recent global crisis and national challenges and this sector I can only see strengthening and providing good returns to investors. The top end is taking longer to come around.”
At the moment Zubin says properties under $400,000 are selling very well in Hobart, but property in the $700’s plus range needs to be priced well in order to achieve buyer interest.
“Areas that will challenge investors are in suburbs that contain significant government housing properties. This is usually accompanied with high unemployment. High yield can be achieved, but growth is usually slower and stunted. Regional and rural area are difficult to consider as pure investments because the lack the core fundamentals necessary for a sound investment. These areas usually appeal for the exceptional lifestyle opportunities they offer,” he says.
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