Tasmania market update: Up to 51% growth in the Apple Isle

Written by realestateview.com.au in Property News on March 10, 2017

Capital growth of 51% in just 12 months? Where do we sign up?

Tasmania is the next big place to invest, it seems: after local properties recorded sluggish or backwards growth for the better part of a decade, sections of the market are now surging forward at breakneck speed.

Overall, the median house price in Tasmania increased 6.5 per cent for the quarter, up 3.1 per cent on the same quarter last year.

Impressively, Hobart experienced an increase of 11.7 per cent for the quarter, reaching a new median $430,000. Launceston is up 5.7 per cent across the same period, while the North-West Centres median house price increased 12.6 per cent for the quarter.

Top annual growth suburbs

The Tasmanian property market ended on a high in 2016 and they’re showing no signs of slowing down this year, with record growth across a number of suburbs.

Overall, Tasmania recorded over $837 million worth of property sales in the December quarter, up 10.7 per cent from the previous quarter and up 6.0 per cent on last year, according to the REIT Quarterly Property Report, December 2016. If this growth rate continues, they could be well on their way to over $1 billion transacted per quarter in the near future!

The top 10 median price growth suburbs and towns over the year were as follows:

SuburbNo. Sales Median price% Median change Dec 15-Dec 16
Riverside19$450,000 51.3%
Mount Nelson5$650,000 48.4%
Primrose Sands6$335,00041.9%
South Hobart13$600,000 40.3%
West Ulverstone13$335,00036.7%
Granton9$436,675 28.1%
West Hobart 20$607,50025.3%

*Source: REIT Quarterly Property Report, December 2016

All of this talk of skyrocketing growth rates is enticing investors from the mainland to consider buying into the Apple Isle, particularly as house prices are a fraction of the cost of homes in Sydney and Melbourne.

CommBank’s recent State of the States report for January 2017 confirms that the state is experiencing strong population growth, with “annual growth on home lending the strongest in the nation, at 10.3 per cent”.

“Tasmania’s annual population growth rose from 0.43 per cent to 0.48 per cent in the June quarter,” the suburb states – though this was 19 per cent lower than its decade average.

That said, while demand for real estate in Tasmania is growing, investors need to understand that the state represents a far smaller market than its capital city counterparts.

This means fewer transactions and less robustness in the market overall, which creates risks not present in bigger cities.

For instance, as a property owner in this market wishing to sell, you could find yourself straddled with a piece of real estate you can’t offload, due to low natural turnover in the market. The population of Tasmania as a whole is just over 500,000: for comparison’s sake, this is less than the Gold Coast’s 600,000, and around an eighth the size of Sydney.

Is now is the right time to buy in Tasmania?