Navigating Tasmania’s Property Market: A Guide for First-Time Buyers

Tasmania’s property market offers appealing opportunities for first-time homebuyers. For example, you could save up to $28,945 on your first home purchase in Tasmania, thanks to the new stamp duty exemption for established homes that value up to $750,000. Also, several suburbs in Tasmania have become excellent options for first-time buyers, offering affordability, potential for growth, and desirable living conditions. However, buying your first home in Tasmania doesn’t come without its challenges. Today, we’ll guide you through exploring Tasmania properties, understanding local market trends and maximising different financing opportunities.

Understanding the Market: Significant Growth & Emerging Trends 

It pays to understand the local market dynamics before diving in, especially if you’re a first-time buyer. Tasmania’s real estate market has seen significant growth in recent years. This growth is driven by factors such as interstate migration and increased demand for housing. That makes Hobart, the capital city, a sought-after location. 

Besides Hobart, regional areas like Launceston and Devonport offer affordable options while providing excellent lifestyle benefits. Plus, if you take advantage of government programs for first-time homebuyers, such as the new stamp duty exemption, First Home Guarantee and First Home Owner Grant, you might feel more confident checking properties for sale in Hobart and the rest of Tasmania. 

Here are other emerging trends that can help you better understand Tasmania’s local property market:

• Market Recovery: After a challenging 2023, Tasmania’s property market is showing signs of recovery in 2024. The June 2024 quarter saw the highest number of transactions in two years, with over 2,600 properties sold across the state.
• Price Stabilisation: According to the Real Estate Institute of Tasmania (REIT), Tasmania’s median house price stood at $600,000 in June 2024, just 4.2% below the peak of $626,000 in June 20221. This indicates a stabilisation of prices after a period of decline.
• Increased Buyer Activity: There’s a resurgence in both investor activity and first-home buyers, with the latter recording the highest volume of quarterly transactions since March 2021.
• Government Initiatives: In June 2024, the Tasmanian government introduced stamp duty reforms to exempt first-time homebuyers from paying stamp duty on properties valued under $750,000, which may stimulate market activity.
• Supply Increase: As of September 2024, total listings in Hobart were 46% above the five-year average, providing more options for buyers.

Finding Your Way to Buy Your First Home in Tasmania

There are three primary methods to purchase property in Tasmania:

1. Private Treaty: This is the most common method, where the seller sets an asking price, and buyers can negotiate. It offers flexibility but can be competitive in hot markets.
2. Auction: Auctions are becoming increasingly popular, especially in Hobart. They require thorough preparation and a clear understanding of your budget limits, as auctions are often emotionally charged. They stimulate tight competition, and without expert guidance, you might find yourself buying a first home that costs way beyond your budget. 
3. Tender: Less common but still used, the tender method is particularly beneficial for unique properties. Buyers submit sealed bids, which the seller reviews before rejecting or accepting the offer. 

Knowing the Financial Considerations for First-Time Homebuyers

Before starting your property search, assess your financial position. Aim to save at least 20% of the property’s value as a deposit to avoid Lenders Mortgage Insurance (LMI). You can save for a deposit faster by practising good financial habits. Using online tools and consulting with mortgage brokers in Hobart can also help you prepare better, as the best brokers can determine your borrowing capacity.

Don’t forget to explore government grants designed for first-time buyers in Tasmania. As mentioned, the Tasmanian First Home Owner Grant (FHOG) can provide significant financial assistance. Currently set at $10,000, it’s available for those building a new home, buying a newly built home, or purchasing an off-the-plan property. You should also explore the First Home Super Saver Scheme. With this scheme, you can make extra voluntary contributions to your superannuation fund, which you can later withdraw to use for a mortgage deposit for your first home.

Hidden Costs of Buying in Tasmania

First-time buyers often overlook additional costs associated with property purchases. Be sure to factor these costs into your budget to avoid surprises down the track. In Tasmania, these may include:

• Land tax: An annual tax based on the property’s value.
• Legal or conveyancing fees: Typically, these fees range from $1,500 to $3,000.
• Loan application fees: These can be up to $1,000, though some lenders waive this.
• Property valuation: These usually cost between $300 and $500.
• Building and pest inspections: Essential for peace of mind and due diligence, these inspections cost around $300 to $400.

Other Considerations When Buying Your First Property in Tasmania

The Importance of Property Inspections

In Tasmania, vendors are not required to disclose all information about a property. This makes thorough inspections substantial. Always conduct a professional building and pest inspection before committing to a purchase. These inspections can reveal issues that may affect your decision or help in price negotiations.

Understanding the Contract of Sale

The contract of sale is a critical document in your property purchase. It outlines all the terms and conditions of the sale, including:

• Buyer and seller details
• Property descriptions
• Purchase price and deposit amount
• Settlement date
• Any special conditions

Given the complexity of these documents, it’s highly recommended to have a solicitor or conveyancer review the contract before signing.

Finalising the Purchase

Once you’ve found your ideal property and agreed on a price, the process moves to the exchange of contracts and settlement. In Tasmania, there is no cooling-off period, so ensure you’re certain about your decision before signing the contract.

The settlement period typically lasts 30 to 90 days, during which final checks are conducted and finances are arranged. On settlement day, the balance of the purchase price is paid, and you officially become the property owner.

Financing Your First Home in Tasmania with Deltos Finance

A guide about navigating Tasmania’s property market won’t be complete without tackling the topic of financing. Here’s how the best Hobart mortgage brokers from our team can help finance your first home in Hobart or any other part of Tasmania:

• Expert Guidance: Deltos Finance provides dedicated mortgage brokers who will support you throughout the entire home-buying process. Trust them to calculate your required deposit, determine your borrowing capacity, and estimate your monthly repayments. With such knowledge, you can make well-informed decisions when buying your first home in Tasmania.
• Deposit Requirements: While most banks require a 5% deposit, Deltos Finance has access to a bank that only requires a 2% deposit, making it faster and easier for first-time buyers like you to enter the market.
• Pre-Approval Assistance: Our team can help you obtain a home loan pre-approval, which provides a clear understanding of your budget and strengthens your negotiating position when making offers on Tasmania properties.
• Government Grant Navigation: Our mortgage brokers in Tasmania will assess your eligibility for various first-home-owner government grants and assist you in applying for them, potentially making your home purchase more affordable.
• Negotiation Power: The best mortgage brokers at Deltos Finance are ready to negotiate with lenders on your behalf, often securing better terms, waived fees, or reduced interest rates.
• Tailored Loan Solutions: Whether you’re looking at vacant land, a house and land package, or an existing property, we will do our best to help you find the best mortgage solution for your specific situation.

We’re Here to Guide You

Penetrating Tasmania’s property market and maximising compelling real estate opportunities can be challenging, especially if you’re a first-home buyer. It’s best to seek professional advice when needed and take the time to thoroughly research your options before making this significant life decision. Deltos Finance is here to guide you, from answering pressing questions to finding the best home loan for you.

Need more insights? Check out our Ultimate First-Home Buyer Checklist. You can also give us a call to speak directly with a Deltos Finance mortgage broker in Tasmania.