The term “rental yield” is music to any property investor’s ears. It’s the key metric that indicates the annual return on your investment, essentially the percentage of the property’s value that comes back to you in rental income. In a market like Tasmania, which has been gaining traction for its overall investment appeal, pinpointing the […]
Is Investing in Tasmanian Property a Good Idea in 2025?
By Deltos Finance on December 13, 2024
The Hobart and greater Tasmanian real estate market seems to be making a comeback. Following a two-and-a-half-year decline, Hobart has experienced a remarkable rebound in property prices. In November, prices continued to rise, increasing by 0.43% over the month, bringing them up 1.33% compared to the same time last year, as reported by PropTrack. This marks the first instance of positive annual growth for Hobart since October 2022. Plus, with the entire state’s economic growth and major construction projects such as the Bridgewater Bridge continuing to take shape, property investors are once again setting their sights on Tasmania.
So, with that in mind, is investing in Tasmanian property a really good idea in 2025? Let’s dig deep, explore the driving factors and identify real estate hotspots you may want to consider if you decide to follow suit and invest in a property in Tasmania.
Market Recovery and Growth Potential
After a challenging period in 2023-2024, Tasmania’s property market shows signs of recovery. The June 2024 quarter saw the highest number of transactions in two years, with 2,644 properties sold across the state. This uptick in activity suggests renewed confidence in the market.
John McGrath, in his McGrath Report 2025, notes a “sense of optimism” in Tasmania, driven by major developments and construction projects such as the Bridgewater Bridge and the proposed Macquarie Point Multipurpose Stadium. These developments will likely transform Hobart’s waterfront and boost the local economy.
Plus, the first-time homebuyer stamp duty exemption for established homes in Tasmania under $750,000 will likely help attract more first-home buyers in the region, including those who want to ‘rentvest’ or invest in their first home while they rent elsewhere. If you want to try ‘rentvesting,’ Tasmania is a good location to consider since it has a huge capital growth potential, while the housing prices in the capital and suburbs remain more affordable than in other areas, like Sydney & Melbourne.
Economic Factors Driving Growth
Several economic factors contribute to Tasmania’s property market potential:
- Population Growth: Tasmania has seen population growth due to interstate migration, which is expected to continue driving housing demand.
- Tourism and Infrastructure: The thriving tourism sector and planned infrastructure projects enhance the state’s attractiveness for investment.
- Diversifying Economy: Tasmania’s economy expands beyond traditional sectors like tourism and agriculture into education, arts, and technology.
With such factors driving Tasmania’s real estate growth, the next question should not be: Should you invest in Tasmanian property in 2025? The more fitting question is: Where should you invest in property in Tasmania? Let’s discuss that further below.
Regional Variations and Hotspots
Tasmania’s property market is not monolithic, with different regions experiencing varied trends. As such, property value and average house price in Tasmania may differ depending on the area, signalling some to be the state’s real estate hotspots:
Hobart
The capital city saw a 16.4% increase in house sales, with the median price rising, too. Suburbs like Kingston & North Hobart are highlighted as areas primed for growth.
Renowned for its beautiful beach, Kingston is ideally situated at the entrance to the Southern Outlet motorway, allowing residents to access the city centre in only ten minutes. That’s not to mention the large amount of land available for development, and there are discussions surrounding a potential performance centre for Tasmania’s new AFL club in Kingston.
North Hobart is a lively and dynamic area that draws in a trendy crowd with its vibrant nightlife and chic dining options. The largely older-style homes in the neighbourhood have seen a fresh update recently, particularly with upscale projects like The Rox, which boost the suburb’s appeal and could push its median property value closer to $1 million.
Launceston
The northern capital recorded its highest number of house sales since March 2022, though the median price slightly decreased to $560,000. Suburbs like Newstead, Mowbray, and Invermay attract attention due to their proximity to the city centre and the university.
Also, keep an eye on Legana. Even though it’s often viewed as being on the borders of Launceston, this charming semi-rural area is just a quick 15-minute drive to the town centre, making it an ideal spot for those seeking a bit of distance from the hustle and bustle. Also, the opening of the Legana Primary School at the beginning of the 2025 school year will likely draw in young families.
Devonport
Buying a property in Tasmania in 2025? Put Devonport on your radar. It braces for a development boom, including a $240 million upgrade to the city’s port. If you’re looking for a promising suburb nearby, check out Latrobe, located south of Devonport. Latrobe has seen a significant amount of land development and releases over the last ten years. If this area’s median house prices, which have already increased by 9.6 per cent, continue to rise, it could present a promising investment opportunity. This is particularly true for savvy investors and first-home buyers, who will likely appreciate the current median house value of $581,000.
Regional Tasmania
Don’t discount regional Tasmania. Primrose Sands, a small coastal village situated halfway between Hobart and Port Arthur, is a good example. Traditionally recognised for its budget-friendly housing, it is now becoming a popular area for gentrification, with several new private apartment projects submitted to the Sorell Council. Renowned for its stunning beach, the median home price, currently at $500,000, is expected to rise significantly in the coming years.
Challenges and Considerations
While the outlook is generally positive, any property investor should be aware of potential challenges. Here are some of them:
- Market Volatility: Smaller markets like Tasmania can be more susceptible to economic fluctuations. So, make sure to stay up-to-date with market trends and local insights to penetrate the property market at the best moment.
- Interest Rates and Lending: The interest rate environment in 2025 will significantly influence property affordability and returns. As early as now, engage a seasoned mortgage broker in Tasmania who can keep you in the loop for any updates on interest rates and connect you to the best lenders.
- Affordability Concerns: Despite recent softening, some areas in Tasmania remain relatively expensive compared to historical norms. Watch out for quarterly updates from property experts, and let the best mortgage brokers in Hobart, Launceston, or Devonport help you fund your property investment.
Property Investment Strategies for 2025
We’ve got more tips for you before we end this blog. If you’re seriously considering Tasmanian property investment in 2025, build on these proven strategies:
- Focus on areas benefiting from infrastructure developments and urban renewal projects.
- Look for properties that cater to changing demographics, such as downsizers or young professionals, to ensure a profitable rental property or get high returns when you sell it.
- Consider the growing demand for energy-efficient and sustainable homes. These features can help you attract more potential buyers or tenants.
- Don’t just search properties in Hobart and other cities. Explore opportunities in regional areas that offer affordability and lifestyle benefits.
Final Thoughts
Investing in Tasmanian property in 2025 presents opportunities and challenges. The state’s natural beauty, improving infrastructure, and evolving economy make it an attractive option for investors. However, as with any investment, thorough research and due diligence are vital. This is where Deltos Finance’s expertise can help you.
Contact us today for an initial consultation. Our mortgage brokers are excited to share more insights into Tasmania’s real estate market and discuss investment loans.
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