While Tasmania’s housing market showed great strength and resilience in 2017, it was undermined by an acute shortage of property to meet current rental and buyer demand, especially in Southern Tasmania, according to the Real Estate Institute of Tasmania’s (REIT) December 2017 Quarterly Report.

“Booming tourism, growing university student numbers, increased employment opportunities, the affordability of our housing and the emergence of Tasmania as a lifestyle destination [have all taken their toll] creating unprecedented demand on a somewhat limited housing supply,” REIT said.

The December report confirmed that 2017 was a standout year for the residential property sector. Not only did Tasmania record the highest number of sales in a decade (11,353 sales), but the cumulative value of these transactions ($3.879bn) was the highest ever recorded.

“House and unit sales recorded their best results since 2003 increasing 13.2% and 19.6% respectively, while land sales recorded a healthy 22.7% increase,” REIT said.

While Hobart ended the year with a median price of $431,000 (up 8.8%), the city only saw a slight increase in sales numbers (+98) over 2017. Launceston registered the highest number of sales (1,334), up 26.6% since 2003, while the North West recorded its best results in a decade, up 16.1% (706 house sales). Launceston’s median house price rose to $292,500 and the North West to $250,000.

Sales to first-home buyers rose by 9.8% (or 120 sales) to 1,345 in 2017. Of these, 911 purchased houses, 158 purchased units, and 276 purchased land. “FHB numbers have now wavered between 1000 and 1500 for 12 of the past 17 years. FHB accounted for 11.8% of all property sales and only 15.3% of all land sales,” REIT said.

Despite all the hype about Tasmania emerging as a major investment hotspot, interstate buyers represented just 21.3% of total sales. Of these, more than half (1,361 or 56.2%) purchased property to reside in Tasmania at a median price of $325,000, while the remaining 1,062 purchased investment properties at a median price of $270,500.

“In 2017 investors acquired 2455 properties at a median price of $260,000. Whilst 1062 were to interstate investors, the majority (1393) were purchased by Tasmanians,” REIT said.

“Unlike Sydney (+60%) and Melbourne (+50%) local investor sales represent just 21.6% of our market. Because we have such a small local rental market (less than 30% of all sales) we have been unable to meet the increased surge in demand over the past 12 months.”

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