Property investors from Melbourne have been having a good look at Tasmania over recent months but it’s also a boom in demand from locals that is pushing their median house price sky high.
The Apple Isle is so hot since COVID hit, property prices have risen by 40 per cent and if that rate continues in 2022 they’ll have a higher median price than Melbourne.
Hobart is now Australia’s fourth-most expensive city with a median house price sitting at $760,000 and it’s the high end property doing most of the damage.
Sandy Bay, South Hobart and West Hobart are the three most expensive suburbs in Hobart, with median house prices of $1.645 million, $1.217 million and $1.201 million respectively.
As for the rest of the island, Launceston’s median prices now sit at $491,000, a jump of 24 per cent, and the North West Centres with a lower $399,000 but also up around 24 per cent.
Since COVID, buyers from Melbourne and the mainland have increased by 54 per cent to make up 23 per cent of total sales, so it’s still local buyers acquiring most properties.
With a fair bit of the action coming from mainland investors and wealthy buyers driving up prices it’s making things harder for first home buyers in Tasmania, and with low vacancy rates and low stock, prices look set to keep rising.
“A dire shortage of properties for sale and for rent combined with an unprecedented demand for residential accommodation to live in and rent, has seen prices and rents surge to new highs,” Real Estate Institute of Tasmania’s Michael Walsh told Property Investor.
“The likelihood that we are not going to be able to provide the stock we need in the immediate to medium future will most probably see continued upward pressure on prices and rents.
“This is the ninth consecutive year of price growth and we now see Tasmania achieving prices on our property comparable to many major centres on the mainland.”
Tasmania has been able to use its isolation to minimise the COVID threat and keep a strong economy but it remains to be seen as to whether it can keep this up regarding its property market.
Ray White managing director Dan White told Property Investor the small state was less susceptible to finance restrictions and interest rates.
“With very strong rental growth, borders reopening and a continual shift in the drivers that shape the economy, high demand for property is set to continue,” he said.
“While the city’s median is a lot lower at just over $500,000, it’s therefore no surprise that the spotlight has now also shifted to Launceston.”
Investors may want to indeed take a good look at Launceston, which is Tasmania’s main investor location, with over 30 per cent of all sales being from investor buyers.
