Tasmania’s 10 best and worst suburbs named, as investors shun Hobart
Investors are steering clear of Hobart and regional Tasmania, but as the list of the ten best and worst real estate suburb performances shows, it's a wildly varied market overall with plenty of capital growth potential.
A local expert says political rumblings are turning investors away from Hobart, while property data confirms Tasmania’s market is in limbo.
But Real Estate Institute of Tasmania (REIT) figures suggest the Apple Isle isn’t out of the race just yet.
Higher interest rates, rising cost of living, decreasing population growth and lower consumer confidence has seen Tasmania’s real estate activity slow throughout 2023.
Since peaking in March 2022 values have been flat or falling, down 12.2 per cent by the end of February 2024, according to CoreLogic.
REIT’s December quarterly report found sales transactions across the state were down 10.7 per cent on last year and 27.4 per cent on 2021, while the value of all 2023 sales reached $5.3 billion, ranking as the third highest year on record.
Southern Tasmania closed 1,033 property transactions over the December quarter with an accumulated value of $721 million, which was a 17-sale increase over the September quarter but 25 sales less than the same time the previous year.
Some of the state’s best performers were Tasmania’s most expensive Hobart suburb, Acton Park, with a median price of $1.2 million, followed by Sandy Bay and Mount Stuart, while Gagebrook, Risdon Vale and New Norfolk were the most affordable suburbs priced between $351,000 to $445,000.
Investors have pretty much totally deserted the market because they’re continually under fire.
- John Lennard, Lennard Mclure Real Estate
For example, a three-bedroom, three-car garage in Sandy Bay on the Hobart city fringe, at 8 Erina Place, is currently listed for offers over $1.1 million, adjacent to premium suburb Battery Point, a six-minute drive to the CBD and 15-minute walk to Short Beach.
John Lennard, Director, Lennard Mclure Real Estate, said premium suburbs are performing well, as are some of the cheaper suburbs in northern Hobart, which correlates with REIT’s report and CoreLogic’s Home Value Index (HVI) figures showing the city’s north east suburbs had the highest 12-month value growth.
“On the western shore you’ve got Sandy Bay and particularly Battery Point, that’s unique, all heritage properties, then Lauderdale is quite close to Hobart but it’s also close to surf beaches and family friendly beaches, full services and doing well,” Mr Lennard said.
Hobart city and Sorell are listed in REIT’s top 10 suburbs for best median unit price performance, up 50.7 per cent in 2022-2023 to $805,000 in Hobart, and growing 16.4 per cent to $512,000 in Sorell.
While only one Hobart suburb, South Arm, appears on REIT’s top 10 list for best annual median house price with 17.9 per cent growth, elsewhere in Tasmania, Westbury grew 33 per cent to $645,000, St Marys by 22.9 per cent to $430,000 and Cooee, 22.1 per cent, $525,000.
TOP 10: BEST Median price performance
HOUSES
| SUBURB | MEDIAN | 2022 to 2023 | DAYS |
|---|---|---|---|
| WESTBURY | $645,000 | 33.0% | 33 |
| ST MARYS | $430,000 | 22.9% | 90 |
| COOEE | $525,000 | 22.1% | 139 |
| ROSEBERY | $188,500 | 19.3% | 54 |
| QUOIBA | $459,500 | 19.0% | 44 |
| SOUTH ARM | $907,500 | 17.9% | 34 |
| MIANDETTA | $555,999 | 17.1% | 59 |
| SCOTTSDALE | $458,750 | 14.7% | 56 |
| SHOREWELL PARK | $410,000 | 14.2% | 45 |
| SHEFFIELD | $517,500 | 13.7% | 38 |
UNITS
| SUBURB | MEDIAN | 2022 to 2023 | DAYS |
|---|---|---|---|
| HADSPEN | $455,000 | 53.2% | 50 |
| HOBART | $805,000 | 50.7% | 28 |
| EAST DEVONPORT | $358,000 | 43.2% | 68 |
| EAST LAUNCESTON | $475,000 | 35.7% | 29 |
| SOUTH LAUNCESTON | $450,000 | 32.4% | 82 |
| ULVERSTONE | $527,000 | 30.1% | 62 |
| NEWSTEAD | $522,000 | 28.9% | 36 |
| PERTH | $500,000 | 20.5% | 17 |
| SMITHTON | $355,000 | 19.3% | 31 |
| SORELL | $512,000 | 16.4% | 61 |
The REIT report said investor numbers increased to 119 sales in southern Tasmania, over the quarter, up six on September and 22 on the same time last year with a median purchase price of $460,000.
Mainland purchasers surged from 86 in September to 101 in December, up on 77 achieved for the same period last year.
REIT president Mike Walsh said that while December quarterly results are consistent with the rest of 2023, the increase in first home buyers, investors and mainland buyer activity is encouraging.
“It suggests our market conditions have stabilised and is providing opportunities for those who want to participate.
“Every market is cyclical, and we have endured a year where some normality has returned.
“It is pleasing to see the supply of rental accommodation growing and this will help alleviate some of the stress within this market and help stabilise rents.
“Unfortunately, it may not provide the quantity of housing we require to reduce the level of stress at the lower end, but I feel confident that things are looking up for 2024 and the prospect of interest rate cuts later in the year will only give more confidence to those seeking to participate,” Mr Walsh said.
The report also found the highest selling suburbs in the Hobart region in December were Howrah with 33 sales, Kingston 31, Sandy Bay 27, and Glenorchy with 33. Of the municipalities, Clarence had 238 sales, Hobart 166, Glenorchy 155 and Kingsborough 127.
Worst Tasmanian property performers
REIT lists three Hobart suburbs (Cremorne, Magra and Snug) in the top 10 worst for median annual house price performance in 2022-2023, falling between 17.8 and 23.8 per cent, to $875k, $515k and $610k respectively.
Launceston, Kings Meadows and West Launceston were the worst of Tasmania’s performers for median unit price down between 22.8 and 33.9 per cent, ranging in price from $360,000 to $440,000.
BOTTOM 10: WORST Median price performance
HOUSES
| SUBURB | MEDIAN | 2022 to 2023 | DAYS |
|---|---|---|---|
| LACHLAN | $551,500 | -28.1% | 49 |
| MOLE CREEK | $495,000 | -27.7% | 40 |
| NUBEENA | $497,500 | -24.3% | 17 |
| SNUG | $610,000 | -23.8% | 68 |
| BRANXHOLM | $440,000 | -21.4% | 99 |
| MAGRA | $515,000 | -19.5% | 49 |
| TAROONA | $933,500 | -18.8% | 42 |
| CAMPANIA | $617,500 | -18.5% | 50 |
| MURDUNNA | $480,000 | -17.9% | 55 |
| CREMORNE | $875,000 | -17.8% | 30 |
UNITS
| SUBURB | MEDIAN | 2022 to 2023 | DAYS |
|---|---|---|---|
| LAUNCESTON | $406,500 | -33.9% | 46 |
| KINGS MEADOWS | $360,000 | -23.0% | 48 |
| WEST LAUNCESTON | $440,000 | -22.8% | 32 |
| HUONVILLE | $380,500 | -22.0% | 42 |
| WEST MOONAH | $430,000 | -21.9% | 50 |
| LUTANA | $445,500 | -20.1% | 36 |
| MOUNT STUART | $415,000 | -15.3% | 26 |
| LINDISFARNE | $590,000 | -14.6% | 38 |
| YOUNGTOWN | $405,500 | -14.6% | 67 |
| MOONAH | $448,000 | -14.4% | 42 |
Using different methodology, CoreLogic March data shows Hobart and regional Tasmania’s dwelling values both fell by 0.3 per cent in February, which is better only than regional Victoria, which fell 0.8 per cent but falls short compared to regional NSW growth by 3.5 per cent annual growth, regional South Australia by 9.7 per cent, regional Queensland by 10 per cent and Western Australia by 10.8 per cent.
Politics pushing people away from Hobart
Mr Lennard is less optimistic about conditions for investors and told API Magazine they’re leaving Australia’s second oldest city in droves, due to many factors, including government policies.
“From our point of view, investors have pretty much totally deserted the market because they’re continually under fire, so every time rents go up investors are blamed, but most have mortgages, so there’s absolutely no return for investment properties in Tasmania at the moment.
“If you paid $600,000 for a property, you’d probably get a rental return of between $500-$600, so less than 5 per cent, and then you’ve got your insurance, rates, maintenance and water, because here you pay the largest usage portion for the tenant,” he said.
“Worst of all we’ve got about the highest land tax in Australia as well, so if you can get a return much better net of 2-3 per cent, it’s unlikely, then the government is saying if they get back in power after the election, any tenant can have a pet.”
First home buyers are also waiting to see if the current government will come good on an election promise if re-elected not to charge them stamp duty up to $750,000.
“That’s a $30,000 exercise and certainly not going to help us at the moment because people are holding off to see if the government gets back in, but finance has tightened up and incomes in Tassie are lower in general than on the mainland,” Mr Lennard said.
The government have also said they will tax Airbnb’s 5 per cent on top of a local council having almost doubled the rates on Airbnb.
“So, investors are thinking they have no control over their property but we need investors because the government can’t provide the housing required.”
