While the COVID-19 outbreak has taken a toll on Tasmania's house sales, the take-up for vacant land has increased over the month, according to the Real Estate Institute of Tasmania (REIT).
Over the month, sales in the state have declined by 27.5%. Hobart, Launceston, and North West all reported substantial drops in home sales at 36.8%, 39%, and 12.3%, respectively.
Of the three, only the North West region managed to keep its prices stable. Hobart and Launceston registered respective price declines of 13.8% and 0.8%. Across the state, prices dipped by 2.2%.
Mandy Welling, REIT president, said the drop in sales was due to the closing of the state's borders in response to the COVID-19 pandemic.
One surprising development, however, was in the sales of vacant land, which increased by 1.6% on an annual basis.
"This is good news with the potential to assist the building industry as they have noticed a downturn in new building approvals," Welling said in a report in The Real Estate Conversation.
Welling said despite the drop in sales activity and prices, buyers are still active in the market. In fact, properties are selling 1.7% above their list prices. This could indicate that there is still competition in the market.
Over the month, participation by investors went down, giving first-home buyers a chance to make their move. The first-home buyer segment accounted for 23.1% of all buyers in the month.
"An increase in first home buyers is a great sign. First home buyers were pushed out by the investor market, but now they are taking advantage of the First Home Deposit Scheme and the low interest rates," Welling said.
Local demand will likely continue to improve as auctions and open homes are being re-opened. However, Welling said Tasmania might not witness strong activity from interstate buyers until travel restrictions are eased.
"When the borders are open again, we will most likely see a return of the investor," she said.
