Is the Launceston property market catching up to Hobart?
When the country’s biggest property markets have seen considerable downturns over the past 12 months, there have been a few outliers around the nation that have bucked trends and continued to see significant growth in the median sale prices of both unattached dwellings and units. Hobart has been a famous example of this, with interstate investors fuelling a frenzy of interest in the capital city over the past several years.
Catching up to the capital in terms of house values, however, and making real strides to overtake it, has been the lush, cinematic regional city of Launceston.
Despite being the largest city in the north of the state, Launceston has struggled to keep up with its southern sibling in terms of economic development or the value of real estate. But this is quickly changing due to infrastructural and cultural developments and a growing presence of interstate investors.
Longterm underutilised space in Launceston’s CBD has sparked a desire by the City of Launceston to favour planning permits from what they call “value-adding” investors within the CBD – those that can revitalise empty space above shops for both long and short term accommodation. The hope for this is to inject more capital into the CBD, support existing businesses, incentivise the creation of new businesses to meet the requirements of long term residents, and to aid in the mitigation of any crime in the area from an increase in passive foot traffic and surveillance.
Beyond this, the City has four major infrastructure projects to promote growth in the city. The ‘North Bank Redevelopment’ aims to revitalise and expand the recreational offerings of the North Bank site which sits at the confluence of the North Esk and Tamar Rivers in the innercity suburb of Invermay. The Launceston City Heart Project involves the redevelopment of five sites within the innercity area of Launceston and hopes to create business investment. The University of Tasmania is exploring longterm ways to make the Inveresk Precinct a vibrant hub in Launceston and increase its attraction for interstate and international students. Finally, the My Place My Future plan is an agreement as part of the Launceston City Deal with Federal, State and Local governments to improve the northern suburbs of the city, focusing on health and wellbeing, housing, education, transport, employment and economic growth, and infrastructure and public spaces.
The My Place My Future Plan will focus on the suburbs of Invermay, Mowbray, Newnham, Mayfield, Rocherlea, Waverley and Ravenswood, many of which have seen strong growth in terms of house values.
The percentage increase in sale price growth for houses in some of these areas over the past twelve months has been strong. Launceston itself, Mowbray and Mayfield have all seen approximately 14 per cent growth over a twelve-month period. The median sale price of a house in Launceston currently sits at $478, 250 (up from $420,000 a year ago).
Tom Harrison, Director of Harisson Humphreys, points to interstate investment as key to boosting consumer confidence in the region.
“There is certainly a renewed confidence and with quite a few projects on the cards there could be even more demand,” he says. “We are seeing many young families (mostly ex Launcestonian’s bringing their partners with them) make their way back over Bass Straight, with many that I have met staying with their current employers (or running their own businesses) and managing their clients with Launceston as their new base. With excellent connectivity and regular flights to the mainland, it is becoming easier to live in Launceston while servicing interstate or international clientele.”
He also points to a shift in priorities for many younger Australians who have simultaneously been priced out of the larger mainland markets as a driver of this investment.
“I might be speculating a bit but I feel that increasing awareness of work-life balance has seen people re-evaluate their priorities. Living in Launceston certainly allows you to get that balance back as your longest commute from the city limits would be 10-15 minutes, giving you precious time to spend time with family. Retirees would still be the largest demographic to come to Launceston annually but it certainly feels as if we are seeing an increase in the percentage of young families and couples making their way down here.”
The most significant growth, however, has not been in house values but in units. The median sale price of units in Launceston has not only increased but skyrocketed over the past 12 months, soaring just over 44 per cent from a median sale price of $260,000 in August last year to where it currently sits at $375,250, according to realestateview.com.au data. This makes investing in a unit in Launceston not only a more affordable option but one that is seeing much higher potential returns for investors in terms of capital growth.
Director at Key2 Property in Launceston, Ananda Cairns, points to the general reliability of the Tasmanian market, even during broader downturns.
“Often when Sydney and Melbourne’s prices are shifting, our prices are steady. The Tasmanian economy is strong at the moment, driving the economic confidence required to upgrade housing or to enter the housing market.”
Also making an impact that cannot be underestimated is the fact that David Walsh, owner of the Museum of Old and New Art and Moorilla Estate in Hobart, moved his near decade-long festival Mona Foma from the capital up to Launceston in early 2019 after splitting the event up between the two cities last year. It returns to the city in 2020 and adds to other major events in the city in the early part of the year, including Festivale, Agfest and the Launceston Cup.
What sets the north of Tasmania apart as a living destination? As longtime locals, Ananda Cairns and Tom Harris share some thoughts on this.
“While some people consider the cold climate a detraction for our state,” Ananda continues, “many others find it an appealing reason to move to Tasmania. Plus the natural beauty of Tasmania and the clean environment and good quality food and wine are obvious drawcards. Launceston is a very pretty city – the third oldest in Australia, so it boasts some beautiful old buildings.”
“Launceston truly has a bit of everything,” says Tom. “A thriving food scene, national sporting events (both Hawthorn and the Hobart Hurricanes play at UTAS stadium), arts festivals and endless opportunities to immerse yourself in nature. Cataract Gorge is only a short walk from the CBD and there are endless walks and reserves close by. As Launceston starts to get more of a cosmopolitan edge to go with its easy access to the natural environment, it really is starting to offer the best of both worlds.”