Tasmania on target to smash property sales records

The record might only be a year old and set during an extraordinary property boom, but Tasmania is on track to smash 2021’s record cumulative value of sales total of $6.2 billion, according to the Real Estate Institute of Tasmania.

REIT’s quarterly report noted the market showed signs of slowing, with sales numbers for the first half of this year down 10.5% when compared to the same time last year. That said, median house prices had grown by 2.6% to $626,000 in the three months through June with unit values holding steady at $485,000.

What’s more, buyer appetite for properties worth over $1 million has been extremely high, with 536 $1m-plus home sales in the first six months of 2022 alone. That’s more than double the 256 sales seen in all of 2020.

Interestingly, 79.3% of these $1m-plus properties were sold locally to Tasmanians – suggesting sustainable demand.

Tasmania’s rental market is under extreme pressure

At the same time, Tasmania experienced a drop in investor numbers, with sales down 20.0% when compared to the previous quarter.

REIT President Michael Walsh said property vacancy rates throughout Tasmania were already at critically low levels so the fall in investor activity was alarming.

“Any reduction of activity in this sector will only add more stress to an already overwhelmed rental sector,” he said.

Why now might be the perfect time to invest in Tasmania

The property price boom might be over, but Tasmanian property continues to be an excellent

investment prospect for three big reasons.

Firstly, there’s the incredibly tight rental market. According to SQM Research, July’s vacancy rate was:

0.2% in Burnie
0.4% on the East Coast
0.5% on the West Coast
0.6% in Hobart
1.3% in Launceston

The vacancy rate tells you how many properties are available for rent in an area, compared to the total number of rental properties. Anything below 2% is considered a landlord’s market.

Secondly, rental demand is up while supply is low. Unsurprisingly, those conditions are causing weekly rents to rise, with SQM Research reporting that asking rents, over the year to August 20, increased by:

24.6% on the West Coast
11.2% on the East Coast
9.2% in Hobart
5.7% in Burnie
5.4% in Launceston

Finally, while prices are currently cooling, history tells us that prices grow strongly over the long term.

Take Hobart’s median house price, which in June 2012 was $327,500. A decade later, it’s grown by a stunning 134% to $766,000.

Looking to buy an investment property in Tasmania? To discuss your options, call 0439 639 508, email [email protected] or fill in this online form.

Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.