A thriving economy boosts Hobart’s upside and attracts visitors, while regional areas await the ripple effect
Hobart is on a roll and is racking up the accolades as its remarkable run continues at breakneck speed.
“Hobart – Tasmania – is going through a bit of a profitable patch economically,” says Angie Zigomanis, senior manager of residential property at BIS Oxford Economics.
“The low dollar means that things like agriculture are doing well, so there are a lot of positives now in the Tasmanian economy compared to recent years. Because people go there in increasing numbers, it’s experiencing a net interstate migration inflow.”
Hobart continues to absorb the majority of this influx as Tasmania’s most populated city, but the demand is soon expected to spill over to other hubs.
“If you look at population growth in Hobart relative to the rest of the state, much of that seems to be going into Hobart, moreso than Launceston or northwest Tasmania,” Zigomanis says.
“I think there’s still more upside in Hobart – it’s still affordable to people coming in from the mainland, and that’s set to drive prices up. Vacancy rates are already fairly tight in Hobart, and some of the demand will start spilling over into Launceston and eventually into other parts of Tasmania as well.”
Regional market benefits
In addition to benefiting from migration, regional Tasmania is also enjoying the increased capital coming in from Sydney and Melbourne. According to CoreLogic’s head of research, Tim Lawless, incoming residents are jumping on the low house prices and the strengthening economy. As a result, dwelling prices have risen by 5.4% in the 12 months to March 2018.
The rental market in southeast Tasmania, in particular, is picking up steam. This region reported the highest quarterly change in rental prices, with rates increasing by 14.5% in the first quarter of 2018. Over the year to March, rents rose by nearly 50%.
Southeast Tasmania is also the sole district in the Apple Isle to show an increase in rental yields – with a 1.2% boost, it offers the highest returns in the state, at 6.4%.
The number of first home buyers in Tasmania only inched up slightly compared to February 2017. This suggests that, although many buyers are looking to purchase in this state due to its affordability, this particular group has not been active.
SUBURB TO WATCH
DEVONPORT: Lifestyle benefits and low prices
Situated on the Mersey River and the coast of Bass Strait, this coastal suburb is the centre of the busy city of Devonport, which attracts visitors from both within and outside of Australia.
The Spirit of Tasmania, which travels to and from Melbourne, docks here. The city is known for its beautiful beaches, and rowing, sailing and fishing are popular activities. Its produce is grown on the fertile Mersey-Forth valley soil, so there is also no shortage of dining options in this suburb.
The low property values make Devonport attractive not only to short-term holidaymakers but buyers as well.
