Mercury (Hobart) - Property

THE KEY TO SUCCESS

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TONY COLLIDGE

INVESTORS have played an important role in Tasmania’s real estate market for many years, but recently, their numbers have been dwindling.

Since January 1, 2000, Real Estate Institute of Tasmania statistics show that investors have acquired 44,454 residentia­l rental properties with a cumulative value of about $10 billion.

Over this 22 year period, residentia­l investment sales have averaged out at 18.9 per cent of all sales with the lowest takeup 10.9 per cent in 2000 and the highest 31.7 per cent just four years later in 2003.

Tasmanians are responsibl­e for providing more than two thirds (68 per cent) of the rental accommodat­ion with interstate buyers accounting for just under one-third (32 per cent).

Typically, median prices for rental properties are at the lower end of the market, well below median norms.

Over the first six months of 2021, 6101 properties were sold across the state and Tasmania’s median house price was $485,000.

Of these, 1130 investment sales were recorded with the median purchase price of $363,750. Mainland investors acquired 390 properties or 34.5 per cent of all investment sales.

The real estate boom of 2002 to 2007 saw the strongest growth in residentia­l investment with 18,484 rental properties acquired.

This represente­d 23.9 per cent of all sales over the period across the state.

Activity over the past 2.5 years (2019 -2021) has seen just 4806 properties acquired for rental purposes at 17.3 per cent of all sales.

This decrease is a concern as our market demand swells.

Over these periods we have seen rental yields decrease from double digit norms (above 10 per cent in the early 2000s) to just above 4 per cent today.

The decrease in rental yields has come about as a result of rents failing to keep pace with the continued rise in property prices across Tasmania.

Today, investors are prepared to look outside their back yard to secure better returns on their money.

Technology and online research facilities have made the investment world a much larger place with a multitude of options available.

Investors are prepared to acquire property interstate were better yields can be attained.

However, Launceston remains Tasmania’s residentia­l investment capital receiving the highest percentage of investors (20.9 per cent of all sales in the region) followed by the North West Coast with 20.5 per cent and Hobart 15.5 per cent.

In the first six month of 2021, 439 investors acquired property in Hobart, 348 in Launceston and 343 on the North West Coast.

 ??  ?? Investors have spent $10bn on rental properties over the past two decades.
Picture: Supplied
Investors have spent $10bn on rental properties over the past two decades. Picture: Supplied

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