Strong 2018 for Tassie market, mixed outlook for 2019

Economist Saul Eslake said to Smart Property Investment that the Tasmanian property market had similarly performed very well in 2018, especially in comparison to Sydney and Melbourne markets.

While the economy played a part in this, another factor was how more people are making the move to Tasmania than they have over the last few years, Mr Eslake said.

“Overseas migration to Tasmania is running at close to record levels and in the last two or three years, more people have been moving across Bass Strait to Tasmania than the other way round after a period when net migration to Tasmania from other states had actually been negative,” he said.

“Moreover, the age profile of people moving to Tasmania is changing a bit, so we’re actually getting more people with families in their prime working years moving here, and that’s obviously adding to demand for property at a time.

“Although it is starting to pick up, there hasn’t been much by way of net additions to the supply of housing here in Tasmania, so, that’s certainly helped the Tasmanian property market perform rather better than other parts.

Simon Pressley, head of research at Propertyology, also said to Smart Property Investment that Tasmania has been performing well over 2018

Like Mr Eslake, Mr Pressley also noted a low level of properties for sale, especially in Hobart.

“The volume of properties for sale in Hobart remains very low, vacancy rates are at record lows, the median house price is still within reach of most Australians, and local confidence is high,” Mr Pressley said.

In particular, Mr Pressley sees Launceston as a top performer for the year ahead.

“The region has fast built an international reputation for the world’s best agriculture produce and that’s now driving employment growth in (food) manufacturing and tourism,” he said.

“Investment in a series in new infrastructure projects such as a hospital expansion, a new university, and CBD urban renewal will further drive local confidence higher in Launceston.”

As for what the future of 2019 holds for Tasmania, responses are mixed. While Mr Pressley expects further price growth, Mr Eslake took a more conservative approach and could see the conditions that occurred in Sydney and Melbourne happening in Tasmania; it is just a matter of time, although this may be many years away.

“I don’t think Tasmania can be completely immune from some of the factors that have been at work on the mainland, although the biggest falls are happening in Melbourne and Sydney where prices had reached the highest levels, and Tasmania is some [ways] away from that,” Mr Eslake said.

“Investors have typically played a smaller role in the Tasmanian property markets and owner-occupiers’ a bigger one than in other states, so factors that are weakening lending to investors or demand from investors for property probably won’t be as significant here as they have been in NSW or Victoria.”