Once considered the “Cinderella” of the Australian property market, Tasmania is emerging as a property hotspot according to Shane Kempton, CEO of Professionals.
The latest CoreLogic figures have highlighted this trend, with Hobart topping the list of capital cities for house price growth over the past three months.
CoreLogic found that based on the rolling quarterly change in dwelling values, the strongest housing market in Australia is currently Hobart, where home values have risen 5.1 per cent over the past three months.
It also found that the Hobart housing market has staged a solid recovery over the past two years and is now the third best performing capital city on an annual basis, with dwelling values rising by almost 14 per cent over the past 12 months behind Sydney and Melbourne.
The improving property market in Hobart is related to economic conditions in the state.
The latest CommSec State of States economic performance report ranked Tasmania as the fourth best economy in Australia, ahead of Queensland, Northern Territory, South Australia and Western Australia.
For many years Tasmania was ranked at the bottom of this list, but there has been a major turnaround in the economic fortunes of this state during recent years.
In particular, the state is benefiting from greater demand for its agricultural produce from China as well as inward investment from Asia.
These improving economic conditions in the state are encouraging more investors from mainland Australia to buy property in Tasmania.
The median house price in Hobart is still only $363,200, while rental yields are among the highest in the nation.
Rental yields for houses in Hobart are 4.9 per cent and 5.4 per cent for units.
Tasmania is now offering a very affordable investment strategy for property investors in Sydney and Melbourne, who can easily travel to the state through regular flight services.
If Tasmania’s economy continues to strengthen, then there is every prospect that it will top the list of capital cities for the strongest house price growth over the coming years with price growth rates in Sydney and Melbourne starting to moderate.