- According to the Real Estate Institute of Tasmania, relentless buyer and rental demand is driving values and rents to new highs in the state
- Year-to-date sales are up 25.3 per cent over last year, with a total sales value of $952 million, or 48.6 per cent, more than the previous year
- The median house, unit, and land prices in Tasmania have all hit new records at $510,000, $425,000, and $186,250, respectively
- Investor numbers account too 19.2 per cent of all sales, but they are still below the 25 per cent level needed to stabilise the rental market, according to REIT
- “Unfortunately, in the immediate future I see prices and rents having no other option than to continue to move upwards,” REIT president Mandy Welling says
In its June Quarterly Report, the Real Estate Institute of Tasmania (REIT) reaffirmed that unrelenting buyer and rental demand is continuing to drive prices and rents to new highs.
The June quarter saw another record cumulative selling value quarter, with the state government on track to earn over $100 million in additional stamp duty on a $1.5 billion gain by 2020.
Year-to-date sales are up 25.3 per cent over last year, with a total sales value of $952 million, or 48.6 per cent, more than the previous year.
While mainland Australian buyer involvement in the market has risen to 17.4 per cent of total sales, it has not yet reached the high heights predicted by many, the report said.
In the Tasmania market, local purchasers still account for 82.3 per cent of transactions.
The evidence in the report, according to REIT president Mandy Welling, “confirms what we are seeing in the marketplace”.
“A dire shortage of rental stock and established homes for sale is failing to quell an insatiable appetite for property across all sectors of the market,” she said.
“If the current levels of activity continue for the remainder of 2021, insurmountable pressure will continue to be placed on property prices and rents. Stock shortages are at the heart of the issue.
“Without an increase in the number of properties for sale and properties for rent the affordability gap will only widen.”
The median house, unit, and land prices in Tasmania have all hit new records at $510,000, $425,000, and $186,250, respectively.
Rents in most areas increased by $10-$25 per week due to increased demand. Vacancy rates in Hobart, Launceston, and the North West are currently at historic lows, registering 1.4 per cent, 1.1 per cent, and 1.7 per cent, respectively.
“The popularity of Tasmania as a safe haven and lifestyle destination is accelerating and we can expect mainland demand for our property to grow,” Ms Welling said.
“This will place even more pressure on an already overwhelmed market. The marketplace needs government to expedite major private building and development projects to enable future demand can be met.
“Any stamp duty windfall should be channelled into public housing to help ease the burden currently carried by the private rental sector.”
Investor numbers increased slightly to 19.2 per cent of all sales, but they are still below the 25 per cent level needed to stabilise the rental market, according to REIT.
In the June quarter, 570 homes were purchased by investors with a median price of $380,000.
Rents are failing to keep up with growing property values, resulting in lower investment returns and investors searching for better opportunities elsewhere, the report found.
Rental yields in Hobart have fallen to 3.7 per cent for three-bedroom residences and 4.1 per cent for units.
“Unfortunately, in the immediate future I see prices and rents having no other option than to continue to move upwards,” Ms Welling said.