Tasmania April 2018

The month in review: Tasmania

By Herron Todd White
April 2018

Hobart

The Tasmanian residential market remains divided in terms of “haves” and “have-nots”.

The Have – Hobart continues to lead the country in capital growth. The vacancy rates continue to be sub 0.5% reflecting in effect a full vacancy. The city has even seen “homeless tent city” pop up at the show grounds due to the lack of housing. So why?

Population growth certainly has played a major role. Much of Tasmania’s population growth has occurred in the south of the state. The pull factor of employment has been the attraction. While state unemployment is 5.8% we suggest in the city it is well less. Jobs mean income and equates to lifestyle. Much of the public service is based in this centre and the tourism boom has benefited the city the most with at times two cruise ships tied up at the wharf.

We have also seen housing shortage due to Airbnb’s sucking some rental stock from the market. This results in further pressure on pricing/rental levels.

Launceston

The flip side is the “Have Nots”. Unemployment in parts of the north-west coast such as Burnie has seen a population drain. This creates excess housing stock.

While the market is showing signs of recovery in this region without some population growth there is little “heat” to start a housing price fire. The north-west coast also has higher unemployment with some centres above 10%.

Given the general lower housing costs in the state possible future upward interest rate, movements are not top of mind in most centres.

Infrastructure spending such as the impending relocation of the University Campus in Launceston is likely to place upward pressure on pricing and rentals in the CBD/Invermay regions while conversely may place a dampener on Mowbray/Newnham as the students move to be near the campus.

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