Continuing bad press for Tasmanian property has become a fact of life, but some interesting developments are emerging to prove the state isn’t out of surprises just yet
Property analysts have been pointing out the sore state of affairs that the Tasmanian property market finds itself in for years, but only now are some interesting symptoms emerging to show the extent to which this is happening.
One of these is a decrease in the number of real estate agencies operating in the state, as certain agencies face closure or merge with other companies. Hobart, as a case in point, has seen at least three agencies close within the space of roughly six months.
Real Estate Institute of Tasmania president Adrian Kelly says that this is occurring largely as the market cools down from boom times that happened around 2003 and 2004.
“Back then the state was getting around 18,000 sales a year, so a lot of companies had decided to start up. The market is now showing closer to 10,000 sales a year and this isn’t enough to support the number of real estate agencies there are. That’s why some are closing,” he says.
“It also takes a lot of effort to run a business in a market that is not performing that well, so this is obviously another reason for the closures,” Kelly adds, affirming that one slight benefit to the decreasing number of agencies is that those that are surviving remain strong. “There are a lot of salespeople leaving the industry, but it seems that the agents who are especially dedicated are the ones who are staying.”
More of the same
The bad news doesn’t seem to stop for Tasmania, as a Deloitte Access Economics Business Outlook report proposes that the state’s economy has been suffering a “blow torch to the belly”.
The report says that poor performance in retail sales have brought about a stagnant period that has lasted a few years. Car sales are also down, while unemployment is currently the highest in the country.
It is not surprising then that increasing numbers of Tasmanians are looking outside of their state for work, with an all-too predictable result.
“A sign of stress that is particularly worrying is the downswing in Tasmania’s population growth, which has dropped back to near-decade lows and, as yet, shows no particular signs of a turnaround,” the report says.
Going further, the Deloitte report says the key drivers of economic growth look bleak at best for Tasmania. One is simply “people power”, which looks ominously weak amid the state’s falling and nearly stagnant population growth and ageing population.
“The longer-term outlook doesn’t suggest any real respite,” says the report. “The state will lag further and further behind the rest of the country unless it can hang onto its younger people.”
A new twist
That the Apple Isle has been getting a lot of bad press is nothing new for Kelly. In fact, he says the constant barrage of negative reports on the economy and housing market have become such a fixture of Tasmanian life that some people are paying them less attention.
“We’re starting to notice a trend of people deciding to engage in the property market anyway,” Kelly says. “Whereas before, people might have paid attention to a string of negative reports in the news or wherever, now many people have become so used to hearing bad news, they’ve decided they may as well buy or sell now. They’re used to the negative outlook and are no longer waiting for prices to increase.”
Kelly says that official measures are not in yet, but his organisation has noticed a small increase in enquiries, which he believes may have come about not only from the presence of more proactive buyers and sellers, but because of interest rate cuts.
Of course, in any down market there are always opportunities and Kelly says that the Hobart and Launceston inner cities are showing decent growth at the moment. Waterfront suburbs, those that have a view onto popular beaches or attractive seascapes, are also keeping their value reasonably well.
He adds that the areas that are suffering the most are blue collar suburbs, largely because these are the areas that have been most affected by increasing unemployment.