Under supply and affordability continue to drive the Tasmania market forward.
Tasmania might not top investors' lists but following the island state's bullish performance in the face of economic uncertainty, maybe it should be.
During the three months to November, median house values jumped by 5.39% to $372,500 according to Residex. Over the year, house values rose by 6.27%. During the past 10 years, Hobart houses have enjoyed the highest average annual growth of 12.36%, even eclipsing Perth (12.28%), which saw staggering growth between late 2005 and 2007.
"People who put their money in Hobart did best of all as their investment increased by 3.2 times. That is, a typical Hobart property purchased for $116,000 ten years ago is worth $372,500 today - a stunning result," says John Edwards, CEO of Residex.
RP Data is reporting similar healthy growth in the state with house values surging by 14.2% between January and October 2009. Units are also enjoying solid increase in values - a hefty 17.21% during the same period.
While the lower sales volumes due to smaller population base make these results more volatile, the underlying strength in Tasmania's economy is undeniably supporting these robust numbers.
During 2008-09, Tasmania's economy - measured by the gross state product (GSP) - grew by 1.4%, easily outperforming the national gross domestic product growth rate of 1.1% and trumping the paltry growth recorded in NSW (0.2%), Victoria (0.8%), Queensland (0.3%) and WA (0.7%) according to the Australian Bureau of Statistics. There was also a strong overall growth in compensation of employees - up by 8.9% - one of the highest in the country and higher than the national average of 5.6% in Australia between 2007-08 and 2008-09. Population continue to grow, rising by 0.16% in the June quarter from the previous three months to 502,627. Unemployment rate, though it inched up a bit, is still lower at 5.4% compared to the national average of 5.7%.
CommSec noted in its report that while ACT has lower unemployment at 3.6%, Tasmania's decade average unemployment rate stands at 6.8%. Compared with other states and territories,Tasmania's job market is performing far better, with unemployment rate well below its 'normal' or decade average it says.
"The market is very resilient and I think that going forward, it will hold up very well," says Peter Bushby, president with REIT.
Julian Adkins of LJ Hooker Hobart shares Bushby's bullish assessment, based on Tasmania's recent performance. "Tasmania has performed better than any other capital cities during the GFC," he says. "The medians are lifting rather well. As an example, in the September quarter in 2008, Taroona's median price was $430,000. In the September quarter 2009, it was $460,000."
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