Tasmania securing 17% investor sales: Herron Todd White

Tasmania securing 17% investor sales: Herron Todd White
Tasmania securing 17% investor sales: Herron Todd White

Of all buyer profiles within the Tasmanian residential property market, the Real Estate Institute reports that 17% of total residential sales can be attributed to investors, Herron Todd White's November review advises.

Within this investor sector the REI further reports that as a percentage of sales occurring within each region (southern, north west and north), investors are most active in the north of the state, their latest monthly update advised.

"Traditionally investors and first home buyers compete for established entry level properties up to approximately $250,000, however the first home buyer’s boost has deflected the attention of first home buyers to newly constructed dwellings in order to capitalise on the grant.

"It is unlikely the state government will extend the first home builder’s boost grant indefinitely or at its current level after December 2015.

"Consequently it could be expected there will be greater than current levels of competition between investors and first home buyers in this market level."

The report suggested that investors generally seek suburbs popular with renters being suburbs that contain either large employers, good access to public transport networks and facilities such as shopping centres, schools and child care facilities.

"Suburbs in the southern region that have achieved the greatest volume of sales in the past twelve months in this entry level price bracket of up to $250,000 are Glenorchy and Claremont.

"Both suburbs are to the north of Hobart’s city centre on the western side of the Derwent. Glenorchy is approximately nine kilometres from the centre while Claremont is approximately 14 kilometres from the centre of town."

The report does state that the majority of these sales have been houses.

"Reported gross yields in Tasmania's south for residential property range from 4.7% to 5.3%.

"The north of Tasmania reportedly offers the highest gross yields for residential investment property at between 5.6% to 5.8%."

The reports statistics show that suburbs in the north where the greatest volumes of sales have occurred within this bracket over the last year are Mowbray and Newnham. Both of these suburbs are near to the University and two good shopping centres.

Investors considering these suburbs should take note that the relocation of the Launceston campus of the University to Inveresk has the support of state and local governments and on approval is expected to be completed within five years, the report advises.

"Applying these same parameters to the north-west reveals highest sales volumes in this market bracket were achieved in the Devonport region, the largest population centre in the north-west. Reported gross yields for the north-west are between 4.8% to 5.6%.

"Should Tasmania make good on its announcement to accept up to 500 asylum seekers this may be a driver for residential property investors to capitalise on housing demand in the near future."

The monthly review concludes by proposing the government may consider schemes such as the National Rental Assistance Scheme as an incentive for private investors to meet resultant potential housing demand through its $1.2 million commitment to support such an intake. 

 

Joel Robinson

Joel Robinson

Joel Robinson is a property journalist based in Sydney. Joel has been writing about the residential real estate market for the last five years, specializing in market trends and the economics and finance behind buying and selling real estate.

Tags: 
Tasmania Residential Market

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