Tasmania stands tall as market softens
Tasmania has bucked the trend of cooling market conditions, with the Apple Isle holding firm while the nation broadly declined.
As the property market slowed across most major markets, Tasmania’s centres of Hobart, Launceston, and Devonport performed quite strongly, according to data from Cotality.
The data found that the 1.4 per cent uptick in Hobart’s property market in July was second only to Darwin, while annual values increased by 9.3 per cent to sit just 0.7 per cent below its price peak.
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Similar trends emerged across Launceston and Devonport, with home owners benefitting from more than 12 per cent value growth over the year.
In addition to the jump in property values, the city’s annual rental growth, which reached 8 per cent, was the third highest in the country, as was its gross rental yield of 4.3 per cent.
McGrath Estate Agents founder John McGrath said the strength of Tasmania’s property market was rooted in infrastructure investment projects.
“The three cities are undergoing, or planning, plenty of billion-dollar infrastructure projects as well, with Tasmania’s building and construction pipeline alone now worth almost $40 billion,” McGrath said.
He said that Hobart’s terminal expansion development and the construction of a new 23,000-seat stadium had played a significant role in the growth of the region.
Similar infrastructure projects across Launceston and Devonport have strengthened the cases for these cities in the eyes of buyers.
In addition to the infrastructure support, McGrath said the growing tourism industry had also contributed to the recent strong performances.
With more than 1.4 million visitors in the year to March, and $3.8 billion in visitor spending, the state’s broader economy continues to strengthen alongside its property market.
A recent report from Property Investment Professionals of Australia (PIPA) had identified Tasmania as a property market poised to capitalise on the influx of buyers seeking the combination of affordability and lifestyle benefits.
The report found that the interest was not limited to owner-occupiers, with strong rental yields attracting investors, particularly in Launceston and the north-west.
While the market had performed strongly in recent times, McGrath said he expected Tasmania to continue to resist the slowdown impacting the rest of the country.
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“As we head towards Spring, and the overall property market continues to change, I believe Tasmania’s property market will experience further upside.”
“Recent strong growth on top of affordable values plus a quiet city lifestyle ensures that Hobart, Launceston, and Devonport will appeal to a range of buyers.”
