Fired up Tasmanian property market’s record-breaking 2021

Prices and rents are on an upward trend due to strong demand and low supply. Because of this, property sales have increased by 41.9 per cent over the year, with statewide median prices setting new highs: homes are now at $520,000 (up 23.85 per cent), units at $432,000 (up 23.4 per cent), and land at $210,000 (up 31.3 per cent).

Double-digit house price gains were reported in Greater Hobart, which saw a lift of 24.9 per cent to $699,500, followed by Launceston $491,000 (24.3 per cent lift), and the north-west centres $399,000 (22.8 per cent lift).

Buyer appetite for properties worth over $1 million was extremely high. REIT has reported a 207.8 per cent increase in transactions for this price point from 256 homes in 2020 to 788 properties in 2021. Of this sector of the market, 77.3 per cent of properties were bought by locals, and only 22.7 per cent by mainland buyers – pointing to sustainable demand.

And although the number of people relocating to the state from the mainland has increased, it has not yet reached the “tsunami level” predicted the year prior based on the figures released by REIT.

Mainland buyers represented just 18.1 per cent of total buyers even if it saw a lift of 54.1 per cent (2,190) over the previous year. Beach homes with a median price of $480,000 attracted 1,349 of these mainland buyers, while 841 were investors who bought properties with a median price of $412,000.

Despite the number of investors in the game rising by 33.9 per cent to a total of 2,329 sales, REIT said the investor sector hadn’t broken records previously set in 2017 and 2018.

Moving over to first home buyers (FHBs), 1,836 buyers entered the market for the first time, staying on par with 2020 figures. However, what was noticeable was a shift in their interest from land sales (28.3 per cent drop) to unit sales (12.6 per cent lift) and houses (4 per cent lift).

Similar to the house market scenario, rental prices are rising due to vacancy rates being at an all-time low. Rents on a three-bed property have increased $35 per week in Hobart, $50 in Launceston, and $40 across the north-west centres.

On the downside, rents aren’t keeping up with rising property prices; therefore, investment yields are continuing to fall. Tasmania saw yields decline from 4.7 per cent in Hobart, 5.4 per cent in Launceston and 5.6 per cent in the north-west in 2018 to 3.7 per cent, 4.1 per cent and 4.4 per cent, respectively, at present.