You may be chasing more affordable prices, dreaming of a lifestyle change, or spotting investment potential in a different market altogether. No matter the reason, buying property in another state can be pretty tempting. But let’s be clear: buying interstate isn’t quite the same as finding a place down the road. You may have to […]
Tasmania on the Rise: The New Frontier for Smart Investors
By Deltos Finance on January 28, 2025
If you are new to property investments, choosing locations where many typically invest seems safe and practical. However, exploring options beyond traditional hotspots can also be valuable. We have one particular place in mind: Tasmania.
Once known primarily for its breathtaking landscapes and unique wildlife, Tasmania now captures investors’ attention for its impressive economic growth, strong rental yields, and increasing property values. So, if you’re looking for promising real estate opportunities, read on to learn why Tasmania investment is truly worth considering.
What’s Driving the Rise?
Strong Economic Performance & Diversification
Tasmania has transitioned from a traditional reliance on agriculture, forestry, and mining to a more diversified economic landscape. The state experiences notable growth thanks to advancements in tourism, renewable energy, and technology. This shift has positively influenced the local property market, attracting prominent global brands and investors seeking stability and long-term real estate opportunities.
In the 2023 financial year, Tasmania’s economy—combining established and emerging industries—saw its gross state product nearly approach $40 billion. This impressive economic performance, growth and diversification enhance the state’s attractiveness as a destination for property investment.
Remarkable Tourism Industry
When it comes to tourism, Tasmania has a lot to offer, from picturesque landscapes to vibrant cultural offerings and exceptional food and wine. In the past year alone, the island state has attracted over 1.3 million visitors, with spending in the state rising nearly 30% since 2019.
This influx of tourists has led to a thriving market for hospitality businesses. A notable example is the sale of the Rockwall Bar & Grill in Battery Point, which fetched $5.95 million with a competitive yield of 4.29%. More tourists also mean more promising opportunities for Airbnb homes, holiday rentals, and other similar investment properties in Tasmania.
Growing Large Format Retail Sector
Large format retail has gained momentum in the island state, as evidenced by data from Burgess Rawson indicating that Tasmanian large format retailers have achieved an average yield of 5.13% since 2021, the highest among all states. This uptick aligns with the growing presence of prominent brands in Tasmania, which has led to increased interest from investors looking for stable, leased properties.
Affordable Property Prices and Capital Appreciation
Compared to mainland states and cities, Tasmania offers relatively affordable property prices that attract investors seeking good value. With the state’s ongoing growth and development, investing in its property market allows you to participate in Tasmania’s promising future. The region is expected to experience strong population growth and robust tourism trends, which could lead to substantial capital appreciation for investors. So, if you’re looking for long-term capital growth and solid rental yields, Tasmania presents a compelling opportunity for property investment.
To add, here are some property value projections for Tasmania in 2025:
Overall Growth
PropTrack’s Property Market Outlook report forecasts overall growth between 0% and 3% for Tasmania in 2025, but some sources suggest Hobart may become known for its comparative affordability.
Hobart Market Projections
Median House Price Range: $685,000 – $735,000
Potential Growth Scenarios:
- Conservative Estimate: 0-2% growth
- Moderate Projection: 3-4% growth
- Optimistic Forecast: 5-6% growth
Launceston Market Projections
The expected median house price is $585,000, with a projected annual growth of 2.8%. Suburbs like Newstead, Mowbray, and Invermay are expected to be emerging investment spots.
North West Coast (Devonport)
The expected median house price is $510,000, with a projected annual growth of 2.5%. The $240 million port upgrade is expected to boost property values in this area.
Read more on this blog: What to Expect in Property Value in Tasmania in 2025?
Investing in Tasmanian Property: Is It Smart?
Tasmania’s natural beauty, thriving tourism sector, planned infrastructure projects, and a diversifying economy make it a compelling destination for smart investors looking to diversify their portfolios and capitalise on the state’s bright future.
It’s also vital to note the regional variations and hotspots within Tasmania’s property market. Property values and average house prices can differ significantly depending on the area, indicating that certain locations, such as Hobart, Launceston, Devonport, and other parts of regional Tasmania, may emerge as the state’s property hotspots.
Challenges and Considerations
While the outlook is generally positive, any property investor should be aware of potential challenges, such as market volatility, changes to interest rates and lending, and affordability concerns. It’s important to:
- Stay up-to-date with market trends and local insights.
- Engage a seasoned mortgage broker in Tasmania to keep you in the loop for any updates on interest rates and connect you to the best lenders.
- Watch out for quarterly updates from property experts.
Also, here are some property investing strategies you can adopt:
- Focus on areas benefiting from recent or ongoing infrastructure developments and urban renewal projects.
- Look for properties that cater to tourists and those considering calling Tasmania their new home.
- Explore opportunities in regional areas that offer affordability and lifestyle benefits.
Learn More About Tasmania & Investing into Property
Want to learn more about Tasmania and its promising property investment opportunities? 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. Check out our blog, too, for more property news and insights.
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