Improvement on the cards?
Economic doom and gloom has long plagued the Apple Isle’s property market, but some recent announcements might herald the beginning of better times
In recent times, there has been nothing but bad news for Tasmania. But now, suddenly, amidst unrelenting gloomy predictions, a glimmer of hope seems to be emerging.
The recent release of the Real Estate Institute of Tasmania (REIT) June Quarter Property Report has revealed a dramatic increase in house sales. REIT president Adrian Kelly says Tasmania has reported a 10.5% increase in property sales for the quarter, and a 19.2% increase for the year.
“Hobart house sales were also up 18% for the quarter, which is the highest we have seen in three years,” he says. “Although it could be argued these figures are skewed due to the low volume of sales, the figures still remain positive, particularly given the market conditions over recent years.”
Launceston house sales have seen a particularly sharp increase (up 34.4% for the quarter and 11.8% for the year), which is the highest rate the region has seen in two years, Kelly continues. “In contrast, the Northwest centres saw a slight decrease in house sales – down 1.7% for the quarter but still up 7.5% for the year.”
Tasmania’s median house price saw an increase for the quarter (up 2.5%, which means a 3.2% increase over the year), he says. “It is a positive sign for the market, especially heading into the cooler winter season, which historically sees fewer properties coming on to the market.
Sellers might think it is a good strategy to wait until spring before listing their properties, but selling in winter when there are fewer properties available for purchase can sometimes work in their favour, Kelly says.
Another positive sign is that the number of days it takes to sell a property is falling and is now sitting at 75 days, according to Kelly.
PRDnationwide Hobart principal Tony Collidge says Tasmania still has valuable offerings for owners and investors in both metropolitan and rural localities.
While there have been falls in the value of Tasmanian property in recent years, the market has all but bottomed out and is about to turn the corner, he says. “This provides a great opportunity for buyers to get into a market where values should start to appreciate.”
Investment properties are providing returns in excess of 5% and, for investors who are prepared to look around, there are some real opportunities out there, Collidge says. “Tasmania continues to provide Australia’s most affordable housing at some of Australia’s lowest prices.”
Hotspotting’s Terry Ryder says that, given the overall state of the Tasmanian economy, it is surprising the property market is holding up as well as it is.
One thing driving buyers back into the markets of Tasmania is the improvement in affordability, he says.
“Thanks to lower prices and falling interest rates, the June period was the seventh consecutive quarter of improving affordability. Also, the REIT says the proportion of income required to meet loan repayments is at its lowest since late 2009.”
Stability in units
Recent reports indicate that the unit section of the Tasmanian property market is doing particularly well, Ryder notes.
The number of unit sales in Hobart city in 2012 was the highest since 2007 and almost double that of 2011, he says.
“Prices typically started around $500,000 and could go up above $2m. Downsizers and retirees are the most common local buyers, while mainland buyers also account for a sizeable portion.”
Suburb to watch
Situated in the foothills of Mount Wellington, and close to Hobart’s CBD, Lenah Valley is a notably family-friendly suburb. Petrusma Property managing director Sam Towns says the good parks and schools in the area mean it is a great place for bringing up children. “I grew up here and I used to walk to school. That is still possible because it is safe.”
The suburb’s close proximity to the CBD, combined with its affordability, mean that it is an attractive place if you have a family and work in town, he adds. “There is a good community feel to the area. It is very much a mid-Australia residential area.”
Typical properties date from the 1900s through to the 1960s, although there is the odd newer-style property available, Towns says.
“Lenah Valley is not a particularly modern suburb. The average property would be a three-bedroom, one-bathroom house. Again, good for families.” There are a number of schools, a private hospital and a small shopping precinct, but the suburb does not have much in the way of industry. However, Towns says it is close to North Hobart, which is a cool, funky type of area with shops and cafes.
Good public transport options mean the attractions of the CBD are easily accessible.
While there is not a great deal currently happening in Lenah Valley, Towns believes the suburb’s pleasant outlook, mountain views, lovely bush walks and family-friendly nature should make it attractive to investors.
Lenah Valley is one of the five Tasmanian suburbs with the highest turnover of house sales, according to the Real Estate Institute of Tasmania’s June Quarter Property Report.
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