Tasmania posted the highest growth in dwelling values across capital cities, according to the MyState Bank Tasmanian Economic Update.
The report showed that the Tasmanian economy continued a steady pace of growth throughout 2018 and into 2019, thanks to nation-leading growth of 3.8% in dwelling values, and a strong tourism sector with double digit growth in international visitors.
State Final Demand (SFD), a broad measure of economic activity, continued a six-year long upward trend in Tasmania, hitting a record high of $8.586 billion in the December quarter.
Tasmanian business confidence kept steadily above the national average. Household consumption, meanwhile, was underpinned by strong consumer confidence and a positive wealth effect.
These encouraging results were all outcomes of the steady growth in Tasmanian house prices. Median house prices are falling across most parts of the country, yet Hobart is bucking the national trend. Dwelling values in Hobart jumped by 3.8% in the year ending April— the highest of all capital cities and one of only three capital cities to experience growth.
Nationally, house price growth fell 7.2% over the same period.
“Australian homeowners see the appeal of selling up in markets like Sydney and Melbourne and buying in Tasmania, where it is more likely they’ll be able to afford a bigger property for a much cheaper price. The state’s strong economic conditions and attractiveness as a lifestyle choice are also big drawcards for residents on mainland Australia, fuelling housing demand,” said MyState’s Chief Financial Officer David Harradine. “A tightening in credit supply is also driving prospective buyers out of larger property markets like Melbourne and Sydney where demand from investors and owner occupiers has dampened.”
Tasmania is the only state to have recorded an increase in mortgage applications (+1.5%) over the year to December. Mortgage applications in Victoria and New South Wales dropped over the same period by 15.4% and 19.1%, respectively.
MyState’s analysis revealed that Hobart’s strong rental yield position has jumped to 5.2% in the year to April— the highest in the country. The median weekly house rent is $450 – now $10 more than Melbourne.
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