Whilst the spotlight is currently shining on Melbourne, properties in the island state are quietly making significant gains.
Investors in Hobart saw their properties increase in value by a whopping 8.35% in the quarter ending September according to Residex. This solid showing comes only second to Melbourne's 9.12% growth for the same period.
Demand for units was also very strong with prices rising by 9.90% to $244,000. Yields have improved with both houses and units offering at least 4.5% thanks to increasing demand from renters.
Properties under $200,000 are in hot demand particular those in close proximity to the CBD according to Herron Todd White. Buyers were mostly owner-occupiers as investors searched better prospects. Those who opt to invest in Tasmania chose cheaper houses as traditional big city residential investments become almost impossible for many.
However, the healthy growth in prices has taken its toll on homebuyers as shown by a growing number of households suffering mortgage stress. The recent ABS data revealed approximately $20,000 households are in mortgage stress, with one in four residents in Battery Point, Brighton, Geeveston, Sorell and Warrane, forced into mortgage repayments exceeding 30% of their income. Whilst Tasmania has some of the cheapest properties in the country, the state also has the lowest level of take home income in the country.
Despite having a plethora of available land to build on, infrastructure to support development is still also lacking in the outer lying areas of Brighton, Huonville and Sorell and in need of a future boost.
However, steady rental prices were achieved in both the housing and unit markets, with Hobart enjoying $290 and $220 respectively, and $210 and $170 in country Tasmania. Rental vacancy levels were remains low at 2.3% in the June quarter, resulting in a more competitive market.
REIT's CEO, Martin Harris, says the Kingston area is one of the biggest growth areas in the country, with strong sales also reported in Devonport, Sandy Bay and Glenorchy.
This rising popularity of the fringe suburbs put increased pressure on property values with outer lying rural residential areas within a 30 minute commute also becoming more appealing to buyers.
Mornington is located 7 km from Hobart's CBD, has a population of approximately 2,000 people, and is situated between Warrane and Cambridge running parallel to the Tasman Highway.
A popular choice for first-home buyers in particular, Mornington consists mainly of older-style, small to medium sized properties. Primarily a residential suburb, it is also home to the Mornington Industrial Estate served by Rosny Park for commercial services. Although it does not extend along the riverfront, the area's slight elevation means that many properties still have views across the Derwent River to Mt Wellington.
The area's main facilities include Clarence council depot, Main Roads and Transport depot, a service vehicle inspection facility, fire and ambulance service, primary and secondary schools, and various shops.
Property prices in Mornington remained on a steady keel as median house prices increased in the last year by 12.03% to $240,500 while it achieved 8.39% growth over the September quarter.The average home in Mornington rented for $240 per week producing rental yields of 5.23%.