The appeal of Tasmania real estate

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Why Tasmania real estate?

Consider this:

  • Tasmania has more coastline than that of the Australian states of New South Wales and Victoria combined.
  • Tasmania has a population of about half a million people, New South Wales just under 7 million and Victoria 5.2 million.
  • In terms of real estate, Hobart is Australia's most affordable capital city, with a median price of under $400,000 and many properties still priced under $300,000.

More coastline to enjoy, less people around, good prices...

In my estimation, this makes Tasmania the state which has some of the best value real estate in Australia.

Tasmania property outlook

Tasmania has a strong manufacturing industry which has underpinned the steady growth of the Tasmanian economy. And that's good news for real estate of course. When there is a growing economy, a good-sized workforce is needed and so the demand for property is maintained. What about the population of Tasmania? Good news there too. There has been a recent surge in population growth which is expected to cause increased demand for housing.

While property prices have risen steadily over the years, the economy did suffer a little in 2010. A number of businesses closed down. Disputes between the foresty industry and environmental groups also had their impact. There has been a rise in unemployment

Now there are two different views of Tasmania real estate. According to one view, Tasmania property will continue to do well. The other view takes the position that the Tasmanian property market is about to decline.

Glass half empty
Why do some see a glass half empty or a negative outlook? Lack of economic drivers and a hung state parliament do not help the situation, it is believed. Investment levels are decreasing, household consumption is not going anywhere, and there is a little surplus in housing stock.

Glass half full
What about the glass half full or positive outlook - what's behind that? While it's true that capital growth may remain flat due to housing stress, this could mean some good rental yields, particularly in Hobart and Launceston.

With the foresty industry and environmental groups making progress toward agreement, things are looking up. The proposed Gunns pulp mill in the Tamar Valley has been given the go-ahead. North of Hobart, a new transport hub in Brighton as well as road and rail improvements are planned.

Being a long-term investor would be the way to go.

Here are some figures for Hobart:

HobartMedian valueGrowth 12 monthsGrowth 3 months to Sep 10Rent returnRent amount Sep 10
Houses$391,5007.42%4.71%4.40%$330/week
Units$286,5009.75%-0.42%4.65%$255/week

Source of information:
Your Investment Property magazine, January 2011 edition

Before you buy

Interested in buying? Make sure your research is as exhaustive as it can be. There are a lot of properties out there. You want to get a good sense of what's available in Tasmania real estate before you make your choices.

Please note that the information on these pages is based only on my own research and personal investment experience. It is not meant to be advice. Always seek professional advice when making decisions regarding property and finance.

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