Speed bumps sidestepped as growth momentum builds

Richmond was Tassie’s hottest suburb in the March quarter. Picture: Supplied

When a federal election is looming, property markets tend to be softer, but a new report shows Tasmanian real estate kicking off 2025 with increasing growth.

While cost-of-living pressures remain top of mind for family budgets, more people bought homes in the March quarter than the previous quarter, or at the same time in 2024.

And values are on the up.

The Real Estate Institute of Tasmania’s March Quarterly report found these 2399 sales were worth $1.48bn.

This cumulative value was an increase of 1.6 per cent on the previous quarter and compared to March 2024, was up by 7.3 per cent.

Tasmania’s median house price increased 1.6 per cent for the quarter to $620,000, which was a 3.3 per cent increase over March last year.

Launceston and the North West median house prices were up by 1.3 and 1 per cent. Hobart decreased by 3 per cent.

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Real Estate Institute of Tasmania president Russell Yaxley.

With property prices soaring interstate, Tasmania is re-emerging as an option for investment spending.

The report showed a “sharp rise” in interest from mainland investors. They accounted for almost half (46.5 per cent) of all investor purchases during the quarter, significantly above the two-year average of 31.8 per cent.

Statewide, rental vacancies were steady at 2 per cent. However, demand saw the median rent for a three-bedroom home in Hobart increase by $10 to $560 per week. Launceston rents decreased $30 to $450 per week, while the North West centres added $15 to $430 per week.

Affordable home prices coupled with rental demand will pique an investor’s interest.

Historic Richmond was the quarter’s standout price performer with a median of $1.66m, followed by Sandy Bay, Kingston Beach and East Launceston.

The West retained the affordability crown with Queenstown houses selling for a $165,000 median value.

There were 211 sales in March in excess of $1m. While this was more than March 2024, it was a handful less than the December quarter. As recently as 2019, Tasmanians recorded just 175 sales at this level in an entire year.

While 447 first-home buyers got their foot on the ladder over the quarter, this was a 13 per cent decrease compared year-on-year.

REIT president Russell Yaxley said Tasmania real estate takes a “slow and steady approach”, avoiding the volatile ebbs and flow activity that are common in larger cities.

“Our market has clearly recovered from its slowdown — late 2023 to early 2024 — and signs look positive for a rebound into 2025,” he said.

“Increasing demand with diminishing stock levels over 2025 will see increased pressure placed on property for sale and rentals over this coming year.”

No.99 Richmond Valley Rd, Richmond was sold by Peterswald for $1.1m.

TPR Property Group sold No.23A Franklin St, Richmond for $1.35m. Picture: realestate.com.au

Meanwhile, PropTrack’s latest monthly Home Price Index shows continued gains with Hobart, which was up by 0.3 per cent in May and 2.58 per cent annually to post a median home value of $685,000 while remaining the second-cheapest city behind only Darwin.

Regional Tasmania was down 0.29 per cent in May and 1.78 per cent higher annually, with a $526,000 median home value.

REA Group senior economist Eleanor Creagh said the rise in home prices was largely driven by falling interest rates.

“With interest rates falling, price momentum has increased and broadened, with all capitals seeing prices lift in May,” she said.

“Lower interest rates have lifted borrowing capacities and boosted buyer demand.”

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