Tasmania's unemployment rate holds back property investment but watch growth in overseas student numbers

Tasmania's high unemployment rate is troubling - and that was before the machinery maker Caterpillar announced plans this month to cut 200 jobs at its Burnie plant, moving part of the operation to Thailand.

The latest RBA chart pack shows how bad it is, with South Australia not quite the basket case.


Source: ABS


In today's ABS data, Tasmania's unemployment rate decreased by 0.3 percentage points to 7.9% in October 2013 (seasonally adjusted) when calculated using unrounded estimates, while in trend terms the unemployment rate decreased by 0.1 percentage points to 8.2%.

It's no surprise that these the two states regularly trail behind the current price growth recovery across Australia.

The most recent price data indicated across Tasmania the median house price fell 1.4% over the September quarter to $295,000, but is up 3.5% for the year. Across Hobart prices increased 1.4% over the quarter to $352,000 and 3.5% over the year. The REIT data is perhaps the most bouyant among the available data.

Fluctuations in tourist visitor numbers have flow-on effects in the Tasmanian economy, although currently the numbers are up.

It has been estimated that 6% of Tasmanians are directly employed in tourism which increases to 11% and represents 25,000 Tasmanians after indirect numbers are taken into account.

Tasmania’s largest domestic markets are Victoria and New South Wales.

According to a new report from Deloitte, entitled Positioning for Prosperity?, Tasmania’s economy has struggled over the past decade epecially as the resources boom channelled most of its benefits to the mainland.

The very strong Australian dollar was a particular problem for manufacturing, forestry and tourism operations.

But Deloitte sees a game changer for Tasmania’s economic prospects in the offing.

"Tasmania may have been on the wrong side of Australia’s ‘two speed economy’ in recent years, but the Australian dollar is already off its peaks, and it has potential to fall further, while interest rates are now at historic lows."

Tasmania rates in some of the super sectors that the Deloitte analysis has identified as key growth drivers over the next two decades.

Tasmanian tourism offers unique and high value experiences to the world’s globetrotters.

And yes no surprise that Tasmania’s farm outputs are clean and green.

But significantly for property investors, it noted more than one in ten students in Tasmania are already from the rest of the world, and the rise of Asia’s middle class has the potential to send that proportion rather higher, the Deloitte report says.

With a 10% jump in applications over the past year, the University of Tasmania has bucked the overall trend of falling numbers becoming one of the most popular places for international students within Australia. Over the past decade there has been a 13.5% annual growth in international students who prefer inner city accomodation.

Asia is the biggest source with over 80% of visitors coming from Asia and in particular China and Malaysia. The university is the state’s largest housing provider, so private landlords have serious competition. The university recently unveiled plans for a new 430-apartment student accommodation development on the corner of Melville and Elizabeth streets touted by business as crucial to the revitalisation of the Hobart city centre.

Architects from Terroir will be supported in the project by Melbourne architectural firm Fender Katsalidis.

UTAS vice-chancellor Peter Rathjen said the project was a crucial piece in the "UTAS-led revitalisation of Hobart".

The cost of living in both Hobart and Launceston is dependent on a student's lifestyle and budgeting skills with estimates their cost of living ranges between $12,000 and $14,500 annually (covering accommodation, transport, food, etc.).

However, for the purposes of Streamlined Visa Processing, students are required to confirm they have sufficient funds to support annual living costs of $18,610.

Hobart Accommodation
On-campus A$340 per week (including meals)
A$146-$247 per week (not including meals)
Shared University Housing A$120-$185 per week
Private Housing A$100-$150 per week (per room)

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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