Tasmania regains top spot as Australia’s best-performing state

Three months.

That’s all it took for Tasmania to regain its crown as the nation’s best-performing economy in the latest quarterly CommSec State of the States report after the Apple Isle lost the spot for the first time in two years in July.

By October, Tassie had propelled itself back up into first position by scoring consistently high rankings across the eight economic indicators CommSec measures:

Economic growth
Retail spending
Equipment investment
Population growth
Unemployment
Construction work
Housing finance
Dwelling starts

The Australian Bureau of Statistics’ most recent state national accounts also show Tasmania’s economy punching well above its weight. Over the 2021-22 financial year:

Tasmania’s economy grew 4.3% compared to the national average of 3.6%
Tasmania’s gross state product (GSP) grew to $36.7 billion, driven by growth in private investment (7.5% year-on-year), government investment (5.0%) and consumption growth

Not bad for a small island state with a population of just over half a million people, right?

The state’s strong economy equals a strong labour market, with the most recent ABS data showing 268,000 Tasmanians were employed in October – a new record high.

As the graph below shows, Tasmanian workers also enjoyed the biggest jump in wages for the year to September, with the ABS wage price index growing 3.6%, compared with the Australian average of 3.2%.

3 reasons to invest in Tasmanian real estate

Tasmania’s strong economy isn’t the only reason why you should consider buying property in the state (though it is a good one).

Here are three other reasons why now could be a great time to buy, if your financial circumstances allow.

First, there’s an increased chance of snapping up a bargain as Tasmania’s property prices are trending downwards.

CoreLogic’s November Home Value index found property prices in:

Hobart fell 4.4% quarter-on-quarter to a median value of $684,800
Regional Tasmania fell 2.5% q-o-q to a median value of $566,100

Second, if you buy a quality property, history suggests you’ll be richly rewarded, with the weighted average median house price increasing by a staggering 269.1% in Hobart between 2002 to 2022, according to the Real Estate Institute of Australia’s latest Real Estate Market Facts report.

Third, if you’re looking to rent out your property, you’ll be happy to hear that Tasmania is well and truly in a landlord’s market. In October, just:

Five in every 1000 rental properties were vacant in Hobart
One in every 1000 rental properties were vacant in Burnie (see graph below)
Five in every 1000 rental properties were vacant on the East Coast
Six in every 1000 rental properties were vacant on the West Coast

Unsurprisingly, these incredibly tight conditions have sent many asking rents through the roof over the year to December:

Hobart = house rents are up 7.6% and unit rents are up 12.8% year-on-year
Burnie = house rents are up 8.5% and unit rents are up 4.4%
East Coast = house rents are down 2.8% and unit rents are up 12.5%
West Coast = house rents are up 8.5% and unit rents are up 54.3%

Looking to buy a quality home or 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.