Affordability could draw investors to Tasmania

Affordability could draw investors to Tasmania
Affordability could draw investors to Tasmania

As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.

January 2012 update: All three properties mentioned below remain up for sale, according to online real estate listings.

 

The release of June quarter data showing renters require less income to rent in Tasmania should encourage investors to dip their toes in Australia’s cheapest property market.

According to the latest REIA/Deposit Power Housing Affordability Report, the proportion of family income devoted to meeting median rents fell from 29.5% to 26.8%, the biggest drop across all states and territories over the quarter.

Despite the deterioration in house prices across the state, with Tasmanian house price falling to just $305,000, the median mortgage size increased from $205,000 to $216,000, meaning affordability rose  1.3% to 29.5%.

Among the more heavily traded suburbs over the June quarter is the coastal city of Devonport, in the centre of Tasmania's north coast.

The town has a population of 25,000 and a modern airport and is a destination for the Bass Strait ferry terminal linking it to Melbourne.

On the basis of 28 sales over the quarter, the median house price has fallen 3.2% over the year to $246,750.

A year ago a house in Devonport cost about $255,000 on the back of 38 sales, and in December 2008 a similar number of properties changed hands at a median price of $221,000.

realestateVIEW.com.au lists 33 properties in Devonport for sale under the current median price.

Investors or families looking for a home with a big backyard and close to schools might be interested in a three-bedroom weatherboard house on Oldaker Street (pictured below) up for sale for offers over $199,000 by Halliwell Property Agents.

Situated on an 813-square-metre block, the 1948-built house is tenanted for six months bringing in $220 per week. This would translate into a yield of 5.75% at the current asking price.

It is close to the Devonport High Schools and to public transport. Features include a Saxon wood heater and large back yard.

The property last sold for $146,000 in September 2005 and has been on the market since January 2011.

According to Alan Halliwell, managing director of Halliwell Property Agents, Devonport remains an actively traded market.

“The number of sales in the Devonport over the last few years has remained steady. There is a solid real estate marketplace in Devonport with the town often places in top three areas in Tasmania for activity,” he says.

Halliwell says the enquiry rate for Devonport properties has not dropped off, with the main determining factor being price. Home owners must price competitively to sell, he says.

Weary metropolitan dwellers in Sydney or Melbourne looking for a tree change might consider the Huon Valley, 40 kilometres from Hobart, known for its arts, crafts and vineyards.

Based on 52 sales over the June quarter, the median house price stands at a tick over $273,000 with prices declining 0.5% over the quarter. A year ago, the median house price in the valley was $270,000 and three years ago, it was exactly the same.

Buyers looking for a rustic bushland retreat could snap up a two-bedroom timber log cabin (pictured below) situated on 27 hectares of mostly native bushland in Pelverata in the Huon Valley and asking about $230,000.

The sale is being handled by Nick Bond from Tasmanian Private Realty. It includes a wood-heated lounge, galley-style timber kitchen and “over 400 metres of picturesque frontage to a permanent creek with two swimming holes along the boundary and many small falls and rapids”.

The property last sold in July 2009 for $215,000 and has been listed for sale since February 2011.

Bond says the “quiet private rural area” is a great escape or weekender away and is only a 10-minute drive from Huonville and 40 minutes from Hobart.

A little further down the Huon Valley is the tiny bayside hamlet of Cygnet dating back to 1834. Cygnet has a population of well under 1,000 and is home to a number of folk and harvest festivals.

According to the REIT June quarter survey and based on 11 sales, house prices depreciated 6.3% to $300,000, but are up 11% over the last two years. Three years ago, a house in Cygnet cost just over $250,000.

Just over $215,000 will get you a three-bedroom house (pictured below) being marketed by Andrew McDonald from Your Home Realty.

“Close your eyes and picture a small, proud country town with stunning green rolling hills, down to a yacht club with miles of pristine waterways, heritage hotels, golf club, restaurant & cafes, craft shops, fishing spots, or just drop into one of the many wineries, which is why this area is one of the best kept secrets of the Huon Valley,” is how McDonald describes Cygnet.

The house would suit an avid gardener, being sold with a glasshouse, three garden sheds and established fruit trees.

It last sold for $145,000 in April 2007 and for $42,500 in June 1998. It has been on the market since August 13.  It currently brings in weekly rent of $255, which translates to a yield 6.17% at the current asking price.

Main picture courtesy of Tourism Tasmania

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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