Tasmania’s market is in the doldrums as weak activity holds back growth
Hobart recorded the worst result of any capital city over the year to July, with values inching up by just one per cent, RP Data reports. The past quarter was particularly slow – according to Australian Property Monitors, houses rose by 0.8 per cent while units fell by 1.3 per cent.
Yet slow market conditions have not dented confidence on the island. A Property Council/ANZ sentiment survey shows optimism increased over the past quarter. The index climbed from 128 in the June quarter to 132 in September, giving Tasmania the third most positive outlook in the nation.
Valuation firm Herron Todd White suggests the slow economy has created investment opportunities on the island. Given the market is at the bottom of its cycle and offers a wide range of stock and unrivalled affordability, investors could find appealing prospects in the cities, the report states.
In addition, the generous First Home Builders Boost has supercharged the island’s construction industry. Herron Todd White notes residential building approvals have climbed by 40 per cent over the past year since the grant was increased.
According to Residex, the state’s highest growth for houses was in the inner city. South Hobart, which has a median price of just $457,000, experienced growth of 17.49 per cent over the past 12 months. Nearby West Hobart also delivered strong results for owners as values in the suburb increased by 14.56 per cent.
The country regions of Tasmania have struggled over the past year. Residex puts growth in regional Tasmania at just 0.4 per cent in the 12 months to June. However, Tasmania’s regional areas offer some of the country’s cheapest real estate. The median house price is just $263,000 across the state.
In regional Tasmania, houses performed well in the small town of Shearwater on the north of the island, according to Residex. Values in the coastal settlement have increased by 12.15 per cent over the year. Units were also strong performers in nearby Wynyard, recording growth of 9.84 per cent.
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