Tasmania is the world’s 26th largest island, located just 240km to the south of the Australian mainland and a destination rising in popularity with international property buyers in 2015.
The capital city of Hobart and the second most populous city in Tasmania, Launceston are the locations receiving the most interest from homebuyers this year, with transaction volumes up almost 25% on 2014.
Tasmania is very different to the Australian mainland. Hobart is home to around 200,000 people, whereas Sydney and Brisbane have populations of 4 and 3 million respectively and the pace of life is much slower, without the traffic problems experienced on the mainland.
Real estate is much cheaper in Hobart and Launceston than other Australian cities. The cost of living in Tasmania is relatively high however, due to the extra cost of freighting goods into the state. Nevertheless, Tasmania is a prime agricultural production state and fruit, vegetables and meat produce is widely and cheaply available on the island.
Tasmania is popular with British expats and is said to be the most “British” of the Australian states, most likely due to the island’s climate. There are four distinct seasons with snow in parts during winter although in Hobart and Launceston it is generally milder than temperatures in the UK. Temperatures can soar in the summer but last for just a few days whereas mainland cities experience prolonged periods of relentlessly high temperatures during summer months.
There’s plenty to do in Tasmania including beach and watersports, bushwalking and other outdoor pursuits. There are also plenty of indoor facilities due to its cooler winter weather – libraries, theatres, art galleries, indoor aquatic and sports centres.
Affordability, good rental returns, low vacancy rates and strong sales are just some of the things that are making investors smile in Tasmania this year. According to recent figures from the Real Estate Institute of Tasmania (REIT), the island achieved its highest number of sales in five years during the first quarter of 2015.
Transaction volume increased 12.1% on last year and the upswing was recorded across the state of Launceston. House sales in Hobart shot up 20.5% on 2014 while Launceston led the charge with 24.9% uplift. 17% of buyers were from Australia’s mainland with 16% of purchases made by property investors, an increase of 2% on last year.
John Collidge, President of REIT said, “These figures are indicative of the Melbourne and Sydney markets being near the top of their run, with many mainland investors looking for other destinations to invest, which are positive signs within our property market“.
Collidge maintains an optimistic outlook for Tasmanian real estate as market confidence improves. Continued strong sales growth in 2015 will see time on market decrease and upward pressure on prices. Low vacancy rates and good rental returns make investment in Tasmanian real estate worthwhile.
Most Tasmanian real estate is coming off a strongly depreciated base, creating opportunities for strong capital growth in the future and remains the most affordable property market in Australia. Investor interest is buoyed further by the state’s rising popularity as a tourist destination, recently winning more awards than any other state or territory at the Australian Tourism Awards – claiming first prize in 10 out of 29 categories.
Tasmanian tourism contributes more than €1.6bn to the state economy each year and directly and indirectly employs 28,000 Tasmanians. The government’s ultimate goal is to attract 1.5 million visitors to Tasmania each year by 2020, creating more than 8,000 jobs in the process.
Tasmanian real estate provides great opportunities for patient investors to achieve good yields with low vacancy rates and the possibility of good capital gains.