The regional Tasmanian city outpacing Australia’s biggest property markets
THE median house price is one Tasmanian city has increased by a higher average annual rate than Sydney over the past two decades, a report has revealed.
Housing market analysis by Propertyology shows Launceston averaged 7.4 per cent growth compared to 7.1 per cent in Sydney in the 20 years to June 2019.
In that time Launceston’s rental market also outpaced the big smoke recording a 5.4 per cent yield compared to Sydney’s 3.1 per cent.
Propertyology head of research Simon Pressley said Launceston’s median house price was currently $325,000 and Sydney’s closer to $1 million.
“Whether 20 years ago or today, many can’t afford to buy a house in Sydney,” he said.
“Back then or now, you could purchase three Launceston houses for the cost of one in Sydney — that is an attractive metric for any property buyer.”
Real Estate Institute of Tasmania president Tony Collidge said he was unsurprised by the Propertyology data as it mirrors his own from the past decade, which saw Sydney values rise by 259 per cent compared to Launceston’s 290 per cent.
“There are many towns outside of the main capital cities where property markets are exploding,” he said.
“In Melbourne there is Geelong, Ballarat and Bendigo, in Sydney there is Newcastle and for Hobart there is Launceston.
“It is all starting to happen in Launceston. In the future they may experience the same growing pains that Hobart has of late.
“It is also important to remember that figures are influenced by when data is recorded. If this report was delivered when Sydney was at its cycle peak, the results might have been line ball or flipped.”
Mr Pressley said Sydney’s last real estate boom ended in July 2017 and a pipeline of new property stock then fuelled a downturn slicing 20 per cent off Sydney values in just two years.
He said Launceston’s real estate prices were flat for several years until early 2018, but today he describes it as one of the “strongest property markets in all of Australia”.
Mr Pressley said the there had been two real estate booms for Launceston and Sydney in the past 20 years, and plenty of other years with sustainable single-digit price growth.
“Over the last 20 years, the median house price declined in just three individual calendar years in Launceston whereas Sydney saw a decline in five of those 20 years,” he said.
Mr Pressley expects Launceston’s current momentum to be driven further forward by economic growth in the form of hotel projects, a new university to be developed on the inner-city fringe, a proposal for a new defence force precinct and tourism sector growth.
“I invested in Launceston myself as recently as February 2018 and have achieved 20 per cent capital growth in the subsequent 19 months,” he said.