In 2021, Tasmania – not just Hobart – made big gains in the property market.
The team here at Nest Property sat down to collate and discuss the current market conditions and to try and cast a crystal ball on market for the remainder of 2022.
This article will provide an expert view of 2021 and a dive into the market for real estate in Tasmania for 2022.
So what happened in the Tasmanian property market in 2021?
2021 was a big year for property in Tasmania, with property prices experiencing record increases.
QBE’s Australian Housing Outlook report outlined: record low interest rates, increased savings supporting home deposits, changing in household preferences due to the pandemic, and a boost from government stimulus as the primary drivers behind Tasmania’s surging property prices.
Corelogic’s Hedonic Home Value Index report found that:
- Dwellings in Hobart experienced an annual increase of +27.7 per cent with a total return of +33 per cent
- Dwellings in regional Tasmania rose +29.8 per cent, with a total return of +36.9 per cent.
- Rental yields in regional Tasmania rose +4.4 per cent
- Hobart rental yields experienced a change of +3.8 per cent, sitting only slightly above the new national record low of +3.23 per cent.
- Houses in Launceston, Tasmania’s largest northern city, rose a significant +21 per cent.
Regionally, according to Westpac’s Housing Pulse November report, the North and North West of Tasmania, which includes the large regional towns of Burnie and Devonport, have also experienced gains, with dwelling prices reaching the +20-30 per cent.
The 2022 property market forecasts are?
With a banner last year, the question on everyone’s lips is will property owners see the same gains in 2022 vs 2021? Let’s take a look at what the experts are saying.
Supply versus demand is the strongest factor in Hobart at present, a reality that existed before the pandemic arrived. With strong population growth QBE projected Hobart to have an undersupply of 4,000 dwellings during 2019/2020.
Like the rest of the country, it is predicted inflation, and changing interest rates will be the two primary driving factors impacting property prices through the rest of 2022. NAB’s The Forward View, shows that there are currently glimpses of the long-awaited economic rebound with the return of migration and the absence of lockdowns.
QBE has Tasmania’s population growth to be projected at +5 per cent per annum over the next five years, which will apply pressure on the housing supply, it may potentially also buoy any impact from interest rates on the property market.
QBE is expecting that performance Hobart and Launceston to perform similarly over the next 12 months with a slowing from March 2022.
The Boom and Bust Report 2022 forecasts:
- +16.5 per cent change in rental yields for houses
- +4.5 per cent increase for units.
QBE’s Australian Housing Outlook Report projects:
- +12 per cent increase in dwelling prices in Launceston
- +14 per cent increase for unit prices
- +15 per cent increase in house prices in Hobart
Although these increases are strong, QBE forecasts that this will occur in the first two quarters of 2021/2022, and will be moderate from March 2022, as interest rates increase.
In contrast to other experts, the BuyersBuyers Investor Special Report suggests Tasmania has already enjoyed most of its available gains, so it doesn’t recommend the Tasmanian market for investment in 2022. Peter Wargent, BuyersBuyers co-founder and international buyer’s agent advises, “ when you’re investing in a market that’s already gone through that kind of a boom, you’ve missed the bulk of the cycle.”
How are house prices predicted to change in 2022 and beyond?
According to the ANZ Housing Forecast, it appears that the median prices across the state are beginning to peak, or are on their way to reaching their peak sometime during 2022. The forecast also states that prices are expected to slow in 2022 and fall in 2023. Even with that projection, ANZ projects an +8 per cent rise in Hobart house prices in 2022. The median house price in Hobart in 2021 was $698,212, compared to $529,190 in 2020, according to Domain.
In Hobart, QBE forecast an increase of +14.7 per cent to the median house price, rising to a projected $783,500.
By comparison, median house prices in the North and North-West of Tasmania are still relatively low compared to the south, with the median house price in regional Tasmania sitting at $485,372, according to the CoreLogic Home Value Index.
What’s about Tasmania’s apartment property market?
QBE is reporting strong gains for the apartment market in Hobart in 2022, forecasting an increase of +14.5 per cent to the median unit price, rising to a projected $667,300.
One reason for this is that Tasmania does not suffer an oversupply issue unlike some other states. According to BuyersBuyers Investor Special Report, unit development in Tasmania has lagged behind the rest of the country.
So, where to buy in 2022?
Are you considering buying an investment property? Then purchasing property in Tasmania during 2022 might prove to be a strong choice.
Overall, we think Tasmania has performed well over the last five years and presents a stable investent. We do advise however that, when you’re considering purchasing a property, it’s important to consider local quality infrastructure and access to amenities before purchasing.
In Southern Tasmania, according to QBE, the suburbs that had the most gains were:
- Glenorchy (+27.2 per cent)
- Hobart City (+23.7 per cent)
- Sorell (22.7 per cent)
- Brighton (+5 per cent)
- Kingborough (+19 per cent)
- Clarence (12.4 per cent)
- Hobart (22.1 per cent)
We do feel however that many of these suburbs are reaching their peaks in terms of growth for the short term.
If you’re looking for the best deals and scoops on buying or selling in 2022, then your first step we advise would be to get in touch with one of our expert team who can help you get the most out of Tasmania’s property market whatever your needs.