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July 8, 2015

Tasmania’s property market scorecard

Recognised for its wilderness, tourism and mining, the local government authority (LGA) of West Coast has officially produced the best total property investment return of all Tasmanian LGAs over the last 15 years.

BY SIMON PRESSLEY

The population of West Coast has declined over the last 10 years and, according to Australian Bureau of Statistics figures, is a mere 4,527 people. When combined with its high unemployment and rather remote location, it’s unlikely that even the most astute property investors would even bother typing “West Coast” into their search engine. However, the actual returns on investment have been absolutely spectacular.

One would have paid $21,750 for a typical house at the start of 2000 and, even though properties declined by 34 per cent over the last six years, it would now be worth $70,000. As they say, small fish taste sweeter!

West Coast’s average annual capital growth of 9.4 per cent is well above the 8 per cent national average for the same period. An 11.1 per cent rental yield means that its total return of 20.5 per cent has it ranked number four in Australia over the last 15 years. Yes, fourth out of 550.

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Propertyology conducted a study to compare the historical property market performance of each of Australia’s 550 LGAs between 2000 and 2014. Given that some property markets have higher rates of growth and others have higher rental yields, Propertyology calculated the “total return” (average annual growth rate plus rental yield) and we then ranked the LGAs from one to 550 based on this performance.

Of the seven LGAs that make up the Greater-Hobart capital city, Derwent Valley was the highest ranked at 24th – impressive stuff! Hobart City was ranked a very respectable 147th (ahead of every LGA in Sydney and Melbourne). Sorell (55th) and Glenorchy (58th) were ranked in the best 10 per cent in Australia over the last 15 years.

Twenty-nine of the total 550 Australian LGAs are in Tasmania. Twelve of those featured in Australia’s Top 100 (the best 20 per cent). Australia’s smallest state bats well above its weight in respect to property market performers over the last 15 years.

These results are further proof that, in isolation, population growth is not a magic potion for property price growth. Data from ABS confirms that Tasmania’s population grew by an average of 0.8 per cent per annum, the lowest of all states and well below the national average of 1.7 per cent per annum.

Tasmania’s north performed particularly well. Kentish (32nd), Burnie (59th), Devonport (113th), Launceston (87th) and West Tamar (153rd) were strong performers.

About Simon Pressley

Simon Pressley is managing director of Propertyology, an REIA Hall of Fame inductee, property market analyst, accredited property investment adviser and buyers' agent. Propertyology works exclusively with property investors to purchase properties in strategically chosen locations all over Australia.

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