STATE OF PLAY

TASMANIA’S property market is holding up despite the impact of COVID-19, a market analyst and commentator says.

While there has been a significant drop in transaction numbers over the June quarter — down 24.4 per cent on the March quarter, according to a new Real Estate Institute of Tasmania report — prices have not fallen.

However, the total value of property sales has retracted.

REIT data shows the state had nearly $860m in sales in the quarter, down 21.7 per cent compared to the March quarter.

PRD Hobart director Tony Collidge says June saw decreases in median house prices in Hobart and Launceston, but this can be attributed to “proportionately fewer sales” in each city’s upper end of the market.

“Claims that COVID-19 would decimate markets across the nation have not been witnessed,” he said.

Mr Collidge said the investment market had been the most significantly impacted by COVID-19.

He said the new REIT data showed a 47.3 per cent decrease in investor numbers over the quarter compared to the March results.

“Fortunately, Airbnb owners moving back into the medium and long-term rental market enabled this sector to overcome any shortfall in rental supply and shore up consumer needs,” Mr Collidge said.

“The drop in investment activity within this state should be of concern to government over the long term.”

Over the past three years interstate purchasers acquired 19.2 per cent of Tasmanian properties.

About 42 per cent of these mainland buyers were investors, while the remaining 58 per cent were buying property to move in to.

“In the June quarter, only 82 interstate investors acquired property in this state, down a whopping 57.9 per cent on the previous quarter,” Mr Collidge said.

“Those looking to move here was also down by 39.7 per cent.

“Our market is now being almost totally driven by local activity and interest.”

Mr Collidge believes the number one factor that has contributed to the stability of Tasmanian property prices is the scarcity of stock for the past five years.

He said this lack of supply had contributed to the continued increase in real estate prices.

In Hobart there were 57 properties for sale last month compared to 79 a year prior and 162 in 2012, according to SQM Research.

“There is a void of thousands of properties, which the construction industry has not filled, while red tape will ensure that this gap will continue to exist,” Mr Collidge said.