Self-sufficient Tassie property defies doomsayers

The post-lockdown reality in Tasmanian property markets is a long way from major banks’ house price crash predictions of up to 30 per cent.

Tasmania’s main property centres have recorded large median property price rises this month, with Launceston’s median house sales price increasing by 4.9 per cent, Hobart 7.0 per cent and the North West areas 11.0 per cent, according to new Real Estate Institute of Tasmania figures.

While the higher sales values aren’t a definitive portrayal of the Apple Isle’s property market, they do indicate that buyers are willing to pay for their targeted property and that the eventual end of COVID-19 restrictions should see the market take off.

In the interim, limited listings continue to prop up the prices paid by those still willing to go shopping. Across Tasmania the number of house sales declined by 5.3 per cent in the past month, other dwellings were also down by 11 per cent and land sales declined by 9.2 per cent.

Hobart did have a marginal increase in the proportion of urgent sale listings from February to mid-May, when the full economic shutdown and social distancing restrictions would have been felt. But local demand, especially among second time buyers, continued to compensate for the lack of interstate visitors.

REIT chief executive Mark Berry told Australian Property Investor Magazine that the signs all pointed towards a major resurgence when restrictions on travel were finally lifted. 

“The market is buoyant now and there’s still a lot of latent interest from interstate buyers, many of whom are surfing the net looking at properties (according to REIT data) while others are buying sight unseen,” Mr Berry said.

“We’d expect to see an increase in interstate investment as Sydney and Melbourne retirees looking for a lifestyle change and investors leasing properties come back into the market.”

REIT president Mandy Welling said that although first home buyers were down 3 per cent on the previous month (to 21.4 per cent of total sales), this was set to turn around too.

“We are confident this number will change with the recent offerings from the federal government, in addition to the incentives available from the state government,” Ms Welling said.

“The statistics, including Hobart house sale volumes rising more than 20 per cent, reflect a confident marketplace that has remained steadfast throughout the pandemic. 

“The focus will be on growth and the ability to increase construction levels to absorb the shortfall of available stock across the table.”

Hobart’s median sales price for houses is $533,000, while for other dwellings it is $402,000.

Renters’ respite

Rental affordability has long been an issue in Hobart, with social service groups vocal in their demands for affordable housing. 

Hobart has been ranked as the country's least affordable capital city for tenants in National Shelter's Rental Affordability Index for the past two years.

The past month has seen some respite, with rents in the city on the Derwent River falling more than in any other Australian capital city, new figures from property research group CoreLogic showed.

CoreLogic's Home Value Index for May showed a 1.4 per cent drop in house rents and a 2 per cent drop in unit rents since March. Vacancy rates remained steady across the state, with Hobart recording a 0.1 per cent increase to 2.8 per cent.

Rental rates:

The Tasmanian Government has also just announced that it will extend certain protections for residential tenants until 30 September 2020. This will bring Tasmania into line with the expiry of protections in most other states and territories.

The protections will prevent rent increases and evictions following a Notice to Vacate issued by a property owner.

Some minor changes to the protections will be made to allow for a Notice to Vacate for a lease of no fixed period in the event of sale of property, major renovations or for the owner or a close family member to move into the property.