Tasmania

The Smartline Report – August Edition

The month in review: Tasmania

By Herron Todd White
August 2015

A First Home Builders Boost (FHBB) grant for newly constructed residential dwellings was offered by the Tasmanian Government in 2013 to supplement the existing first home owners grant with the intent of stimulating activity within the construction industry. A less than mediocre uptake and a flagging construction industry saw the Government further boost the FHBB grant to $30,000 in November 2013 which continued until December 2014. During this period construction costs were very competitive relative to pre global financial crisis levels due to low demand.

As of 1 January 2015 the grant was reduced to $20,000 with a scheduled further reduction to $10,000 for homes built after 30 June 2015. This scheduled reduction did not occur and the $20,000 grant was extended for first home builders or purchasers of newly constructed homes to 31 December 2015.

Demand for vacant land within the past year in Tasmania has been steady, the most likely driver being those taking advantage of the FHBB grant. Land prices in some subdivisions across the state have seen increases which could be attributed to developers capitalising on the FHBB market. Higher sales volumes of residential land on Hobart’s eastern shore in the south, particularly in Old Beach, Sorrell and Howrah would indicate they are popular suburbs with first home builders.

Residential land sale volumes over the past twelve months in the state’s north-west have been strongest in regions near to the Mersey River in the townships of Latrobe and Spreyton, the popular north-west traditional holiday spots of Port Sorell and Shearwater and the largest population centres, Devonport and Burnie.

In northern Tasmania, Riverside and Legana which overlook the Tamar River, St Leonards and the satellite villages of Hadspen and Perth are areas where the largest volumes of vacant residential land sales have occurred during the past year.

State-wide construction prices appear to have bounced back to similar levels as 2009. For example, to build an average sized home of approximately 180 square metres with a basic construction you could expect to pay between $200,000 and $250,000.

For the same sized residential dwelling of an average construction you would expect to pay between $250,000 and $270,000.

For homes of a high quality of this size you would expect to start with a minimum construction cost of $325,000 with a range up to $400,000

Based on a 180 square metre dwelling, if constructing a distinctive, luxury home construction costs can range anywhere between $400,000 and up to $900,000.

Premium prices for newly constructed homes within the first home buyer market bracket are being achieved and it could be expected that market changes will occur after December 2015. For example, previous stimulative initiatives created non-cyclical spikes in demand and pricing as future market entrants brought forward their purchasing decisions to capitalise on current incentives. After stimulus initiative programs concluded there were declines in both the pricing and demand in the marketplace.

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Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

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