Tasmania

The Smartline Report – November Edition

The month in review: Tasmania

By Herron Todd White
November 2015

Of all buyer profiles within the Tasmanian residential property market, the Real Estate Institute reports that 17% of total residential sales can be attributed to investors. Within this investor sector the REI further reports that as a percentage of sales occurring within each region (southern, north west and north), investors are most active in the north of the state. Traditionally investors and first home buyers compete for established entry level properties up to approximately $250,000, however the first home buyer’s boost has deflected the attention of first home buyers to newly constructed dwellings in order to capitalise on the grant. It is unlikely the state government will extend the first home builder’s boost grant indefinitely or at its current level after December 2015. Consequently it could be expected there will be greater than current levels of competition between investors and first home buyers in this market level.

Suburbs in the southern region that have achieved the greatest volume of sales in the past twelve months in this entry level price bracket of up to $250,000 are Glenorchy and Claremont. Both suburbs are to the north of Hobart’s city centre on the western side of the Derwent. Glenorchy is approximately nine kilometres from the centre while Claremont is approximately 14 kilometres from the centre of town. The majority of these sales have been houses. Reported gross yields in Tassie’s south for residential property range from 4.7% to 5.3%.

The north of Tasmania reportedly offers the highest gross yields for residential investment property at between 5.6% to 5.8%. Suburbs in the north where the greatest volumes of sales have occurred within this bracket over the last year are Mowbray and Newnham. Both of these suburbs are near to the University and two good shopping centres. Investors considering these suburbs should take note that the relocation of the Launceston campus of the University to Inveresk has the support of state and local governments and on approval is expected to be completed within five years.

Applying these same parameters to the north-west reveals highest sales volumes in this market bracket were achieved in the Devonport region, the largest population centre in the north-west. Reported gross yields for the north-west are between 4.8% to 5.6%. Should Tasmania make good on its announcement to accept up to 500 asylum seekers this may be a driver for residential property investors to capitalise on housing demand in the near future. The government may consider schemes such as the National Rental Assistance Scheme as an incentive for private investors to meet resultant potential housing demand through its $1.2 million commitment to support such an intake.

www.smartline.com.au

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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