Strong local economy driving property market success
WHEN talking to Real Estate Institute of Tasmania president Tony Collidge about the state of the residential property market, the conversation can go in any number of directions.
Reflections on a period of outstanding growth, forecasts for the future near and far, and the complex web of factors that could affect Hobart and Tasmania will all get a look in.
Tony said unravelling the planning scheme and encouraging the right kind of development were among the keys to future success.
At the forefront of Tony’s mind at the minute is the most recent market boom.
“This boom started in the city and radiated out,” Tony said.
“When it starts to close, I expect it will start out and come back in.
“The city will be the last area affected, while the outer areas will have had a far shorter period of growth.
“That is not to say that the growth in outer areas has not been significant — it has been strong in areas like Brighton, Glenorchy and Sorell.
“However, we are also seeing time on market start to lengthen, particularly in the higher end of our market. It is an indicator to keep an eye on.”
Tony said an important factor in forecasts was the ongoing lack of stock, with supply not able to meet demand.
He said listings remain a critical part of the market equation.
“Some people — often from interstate — tell me our prices will come down,” he said. “They reckon what happens in Melbourne and Sydney eventually flows through to everywhere else.
“I disagree. Each area is dependent on its own economic conditions, and down here we are one of the only economies — alongside Adelaide — where positive things are happening.
“Our biggest challenge is to maintain that economic momentum. If that starts to wane, then it affects job opportunities, migration, property transactions and more; the flow-on effect is huge.”
One thing that appears destined to “pause” the Tassie market for a month or so is the forthcoming election.
“Historically, when there is an election — particularly a federal election — everything stops in our industry,” he said.
“That might be for a month or six weeks. People tend to weigh their option in the lead-up to the election and a few weeks after as they take stock of the fallout and what it means to them.”
With Hobart still posting the best home value growth results in the nation — 17 consecutive months and counting — and northern centres gathering momentum, Tony expects 2019 to be another standout year for the Tassie real estate industry.
“In the time that I have been president at the REIT, Hobart has grown from the bottom of the tree to surpass prices in Adelaide, Perth, Darwin, and we are now knocking on Brisbane’s door,” he said.
“I believe the city can grow while retaining its beauty and character, and we should not take what we have for granted. That said, there are always tough choices that need to be made.
“Currently everyone is talking about Launceston, and it might end up being Tasmania’s best-performing market this year. And the North-West Coast, I believe it offers even better value for money than Launceston.”