Tasmania's 10 best and worst property markets, and what's hot into 2024

Tasmania’s overall property values have declined markedly since the pandemic-era boom but there are still house and unit markets recording double digit growth just as others have taken a big hit.

Among the top 10 best and worst performing housing markets in Tasmania one clear divide stands out.

All but one of the best performing housing markets is outside Hobart while among the worst performing house markets, all are in or relatively close to the two major centres of Hobart and Launceston.

High performing unit markets are far more prevalent in the capital and this contributed to their outperformance of house prices among the top 10 best lists.

The latest CoreLogic Home Value Index showed that Hobart prices were unchanged over the month when, together only with Canberra among the capitals, it failed to record a price increase.

Dwelling values have barely moved over the quarter (up 0.1 per cent) but are not yet eating into the annual decline of 11.4 per cent, by far the worst performance among the state and territory capitals or even the larger regional centres.

Property prices in Hobart have taken a bigger hit than their regional counterparts since Covid.

The Tasmanian capital’s dwelling prices are down 13.0 per cent since their peak in May 2022, while regionally price falls have been almost half as bad, slipping 7.7 per cent since June 2022’s peak.

The slide in the market overall was at least partially brought about by the desertion from the market by interstate investors who had previously seen the island state’s isolation as a Covid-era attraction.

Today, total property sales listings were holding below the previous five-year average across every capital city - except Hobart.

In another sign of overall market weakness, even if it is a plus for many, Hobart (again with Canberra) was almost alone in recording a drop in rental prices, dropping 2.1 per cent in July alone.

These are also the only two capital cities where vacancy rates have risen more than a percentage point over the past 12 months, ultimately reflecting a better balance between rental supply and demand.

Marc Lester, Director of Mix Property Group, denied Hobart was a boom-bust property market, citing its steady trajectory over decades.

“Hobart has seen stable, consistent and strong growth over a long period of time.

“The 20-year data shows that the two major downturns in the market during this time - 2007 and 2012 - were relatively short-lived followed by periods of strong growth, particularly between 2017 and 2022.

“Based on the historical trends and the popularity of Hobart’s vibrant yet easy lifestyle, I believe the current downturn will follow the historical data and bounce back sooner rather than later.

“It’s also interesting to note Hobart has largely followed the trends of other capital cities in Australia although somewhat delayed, which would suggest as prices increase elsewhere Hobart will again be viewed as a place of investment opportunity.”

David Gunning, Managing Director, EIS Property, said Hobart house prices had delivered growth for a decade.

“I wouldn’t say that it has been a bust.

“Hobart house prices have dropped around 14 per cent, however, considering the growth prior to that, it has been a good 10 years for the Hobart market.

“In regard to rents, it is the first time they have softened in over a decade, where the vacancy rate has doubled from 1-2 per cent.

“Properties are taking anywhere from one to three weeks to rent.”

A newly published API Magazine market sentiment survey found interstate investors were shying away from smaller city markets like Hobart, Darwin and Canberra.

Both local experts agreed interstate investors were thin on the ground.

“We have seen enquiries from interstate investors remain low for a little while now,” Mr Lester said.

“Buyer uncertainty around interest rates, inflation, wages growth and affordability coupled with an increase in listings has resulted in longer days on the market and buyers shopping around as they are prepared to wait for the right property.” 

Hobart's property hotspots and headaches

Cost of living pressures were hitting the market hardest, according to Mr Gunning.

“We have definitely seen investors move away from the market, with a greater focus on owner-occupiers buying in the current market.

“From a capital growth point of view, I think we have bottomed out and with the forecast of minimal rate increases from here, we could expect to see some slight growth in the back end of the next 12 months.

“The big factor driving the market now is cost of living pressure, which is driving people in their 20s and 30s to move back in with parents to save on costs.

“We are seeing investors selling, due to the increasing costs of outgoings.”

Mr Gunning singled out Warrane and Mornington as his two hotspot picks, saying they are still affordable with such close proximity to services and the Hobart CBD.

For Mr Lester, Brighton and Margate were his tips for investors looking for value and capital growth prospects.

“Both suburbs are seeing significant investment into community infrastructure and amenities and are both within commuting distance of Hobart.

“For Brighton, the development of the new Bridgewater Bridge and the new high school and a strong push for rezoning the surrounding land to residential will prove popular with both homeowners and tenants.

“In Margate, the development of a significant shopping complex will add much needed services and convenience to this busy and already popular area.”