Tasmania

The Smartline Report – December Edition

The month in review: Tasmania

By Herron Todd White
December 2015

During 2015 Tasmania’s economic performance has remained positive. The state’s unemployment rate has steadily declined to 6.2% which is just a tad above the national and its decade average (0.1%), being the best national performer when measured against decade averages.

The residential real estate market continues with a below (16 year) average performance, however annual sales volumes have increased from recent years of historic lows and there are reported stock shortages in some suburbs.

The scheduled end of the First Home Builders Boost on 31 December 2015 is a potential pitfall as 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.

Historically at the conclusion of stimulus initiative programs, declines occurred in both pricing and demand in the marketplace. Assuming levels of supply remain relatively constant this same scenario may unfold resulting in slower vacant land sales and a weakening in demand and pricing due to demand imbalance as this initiative ends.

Some land developers may already be anticipating a weakening in demand as we are now beginning to see advertised incentives including new cars and gift vouchers being offered with vacant land purchases. Incentive offers have also extended to the building industry as has occurred in the past.

Tasmania continues to be challenged by economic conditions, particularly in the north-west however there is a continued, steadfast focus on developing its agricultural, education and tourism markets. For example, Hellyers Road Distillery has grown by 50% during 2015, broken into the lucrative Japanese whisky market and expanded its presence in the European whisky market; berry growers are increasing production in the north-west; and new cycle trails and MONA continue to be tourist draw cards.

Tasmania’s strengthening tourism and food production industries create and support employment and business opportunities that will aid stability, sending positive ripples to other markets including housing. Tasmania is ahead of the pack in grappling with contraction of its traditional industries, something other Australian regions are yet to be confronted with.

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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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