Most people would dismiss this little known part of the Apple Isle, but here's what they've been missing out on.
Recognised for its wilderness, tourism, and mining, the local government authority (LGA) of West Coast has officially produced the best total property investment return of all Tasmanian LGAs over the last 15 years.
The population of West Coast has declined over the last 10 years and, according to 2014 Census, is now a mere 4,527 people. When combined with its high unemployment rate and rather remote location, it’s unlikely that even the most astute property investor would bother typing ‘West Coast’ in to their search engine. But the actual returns on investment have been absolutely spectacular.
One would have paid $21,750 for a typical house at the start of 2000 and, even though properties declined by 34 per cent over the last six years, it would now be worth $70,000. As they say, small fish taste sweeter.
West Coast’s average annual capital growth of 9.4 per cent is well above the eight per cent national average for the same period. An 11.1 per cent rental yield means that its total return of 20.5 per cent has it ranked number four in Australia over the last 15 years. Yes, fourth out of 550.
Propertyology conducted a study to compare the historical property market performance of each of Australia’s 550 local government authorities between 2000 and 2014. Given that some property markets have higher rates of growth and others have higher rental yields, Propertyology calculated the ‘total return’ (average annual growth rate plus rental yield) and we then ranked the LGAs from 1 to 550 based on this performance.
Of the seven LGAs that make up the Greater-Hobart capital city, Derwent Valley was the highest ranked LGA at 24th – impressive stuff! Hobart City was ranked a very respectable 147th (ahead of every LGA in Sydney and Melbourne). Sorell, 55th, and Glenorchy, 58th, were ranked in the best 10 per cent in Australia over the last 15 years.
Of the 550 Australian LGAs, 29 are in Tasmania. Twelve of those LGAs featured in Australia’s Top 100 (the best 20 per cent). Australia’s smallest state bats well above its weight in respect to property market performers over the last 15 years.
These results are further proof that, in isolation, population growth is not a magic potion for property price growth. Data from ABS confirms that Tasmania’s population grew by an average of 0.8 per cent per annum, the lowest of all states and well below the national average of 1.7 per cent per annum.
Tasmania’s north performed particularly well. Kentish came 32nd, Burnie, 59th, Devenport, 113th, Launceston, 87th, and West Tamar, 153rd.
Simon Pressley is Managing Director of Propertyology. Having being awarded Australia’s buyer’s agent of the year on three consecutive occasions, Simon is a REIA Hall Of Fame Inductee. Propertyology’s core business involves full-time analyses of property markets all over Australia. Working exclusively for property investors, their service involves buying properties in strategically chosen locations all over Australia.