Tasmania’s market is in an extended slump and there are few signs of recovery on the horizon
Hobart was the country’s worst performing capital city over the past 12 months. RP Data reports that in the 12 months to June, dwelling values rose by just 2.5 per cent. In the second quarter of the year, prices backslid by 0.5 per cent.
But some suburbs saw significant increases in that period. West Hobart recorded capital growth of 14.1 per cent in the past year, according to Residex. In the unit sector, West Moonah saw increases of 16.83 per cent.
According to SQM Research, Tasmania has two of the country’s most discounted properties. The luxury end of the market seems most difficult to move. One home in Richmond was listed for $2.8 million before the price dropped to $1.8 million. Another, in Hobart’s exclusive Battery Point, is now listed at $1.5 million, a $700,000 drop from the original list price.
At the other end of the price spectrum, Hobart also has the most affordable properties in Australia, even taking into account the state’s low incomes.
Residex identified that the estimated household income for a Tasmanian family is $90,708. Families would need to spend around 26.87 per cent of their income on loan repayments for a median-value home. By comparison, families in Sydney may be on the hook for 51.95 per cent of their incomes.
Sales volumes also seem to be picking up on the island state. RP Data shows house sales have increased by six per cent compared to the same time last year.
A forecast by BIS Shrapnel suggests the outlook is bleak for Tasmania. According to the report, Hobart is suffering from over-building and low demand, with migration dropping into the negative range over the past two years. The employment market is weak, although the construction sector is picking up speed. As a result, BIS Shrapnel predicts the market will increase by only four per cent over the next three years.
Tasmania’s regions are also the second worst for re-sale value. Around 19 per cent of sales result in a loss to the vendor, a number which climbs to 20 per cent in the North West region.
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