Tasmania November 2017

The month in review: Tasmania

By Herron Todd White
November 2017

Hobart Property Update

Hobarts residential rental market continues to be firm with sub 2% vacancy factors and overall rental price growth approaching 5% year on year. This is been driven by a historic ‘strong’ property market and various push/pull factors in the differing regions.

The university has recently developed a substantive 15 level apartment block in the CBD. This has absorbed some tenants that otherwise would have been in the private market. However, discussions with the project manager, many have actually come from the outer regions who other wise may have stayed at home or taken cheaper fringe rental accommodation. Those students near Sandy Bay and City campuses or residing on site have tended to stay in situ.

The property price growth has pushed many would be first home buyers to remain in the rental market (first home buyers remain around 1/3 of the market). Rising rental costs, especially inner city, continue to depreciate their saving ability.

Mum and Dad and Self Managed Super Fund (SMSF) investors have been active in the middle geographical band, which includes suburbs such as Moonah, Kingston, Glenorchy, Lindsfarne etc. Housing around the $400,000 mark is still very achievable with gross yields typically in the 5.5% to 6% range.

There are around half a dozen serviced apartment complexes in which strata’s are available. Yields typically are 7% net and above. However, historically these have to date, attracted limited capital growth.

For those with some coin in their pocket….. 22 De Witt Street comprising a historic dual level 5-bedroom 4-bathroom residence with a pool can be rented for $1,200 per week. For those on the other side of the economic scale sub $150 per week is still available, such as a 1-bedroom 1-bathroom flat in Rokeby for $135 per week.

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