TAS Property Report for January

Tasmania
Property Report – January 2014
Tasmania – Property Report
January 2014
National Overview
This quarter we look around the nation to identify
affordable properties with the potential to deliver
healthy long term gains suitable for first home
buyers and also investors. If there is one word
that could sum up the key driver for growth, it
would have to be ‘infrastructure’.
New road / rail links are bringing affordable outer suburbs closer to city
centres and employment hubs. New hospitals or tourism precincts are
creating jobs. These are valuable factors that will underpin long term
capital gains.
ALL ABOARD – NEW RAIL LINKS LET SUBURBS REACH FULL POTENTIAL
The inner Sydney property market looks set to be transformed by a number
of new light rail systems. Key areas to benefit include the inner west’s
Dulwich Hill and Kingsford in the east.
For investors with a speculative
leaning, suburbs with proximity to
Brisbane’s proposed Underground
Bus and Train (UBAT) link could
offer long term capital growth.
The construction of South West Rail Link is likely to underpin growth in the
first home buyer belt of Sydney’s south west, with suburbs like Elizabeth
Hills, Gregory Hills and Oran Park well placed to reap the rewards.
For investors with a speculative leaning, suburbs with proximity to
Brisbane’s proposed Underground Bus and Train (UBAT) link could offer
long term capital growth. The connection is earmarked to run from Dutton
Park in the south to Victoria Park in the north, though it’s worth stressing
the project is only a proposal at this stage.
ROAD LINKS BRING OUTER SUBURBS CLOSER IN
The duplication of Adelaide’s Southern Express Way – due for completion
in mid-2014, will vastly improve commuter access to Adelaide’s south.
Suburbs like Seaford, Seaford Rise and Port Noarlunga South all offer
significant lifestyle benefits and the new road link should bring capital
growth to the region.
NEW COMMUNITY INFRASTRUCTURE CREATES OPPORTUNITIES
Melbourne’s Broadmeadows is a classic example of an uncut gem for
investors. House prices start at the low $350,000s, yet the suburb
is located just 16 kilometres north of the CBD. A major investment in
community facilities is expected to enhance the area’s appeal.
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Tasmania – Property Report
January 2014
For investors with a five year timeframe, the additional employment
generated by the Queensland’s Sunshine Coast University Hospital (due
for completion in 2016) should support property values from Caloundra to
Maroochydore.
CONSIDER NEIGHBOURING AREAS
Faced with affordability challenges, it can pay to look at areas where
neighbouring suburbs have experienced strong price growth. This is
especially true in the Perth suburbs of Parkwood and Lynwood, which
remain priced below $500,000 while adjacent suburbs are commanding
price tags in excess of $650,000. When suburbs share the same
infrastructure facilities, notably transport links, there’s a good chance that
price growth will ripple outwards.
A FINANCIAL HELPING HAND
In a number of locations, first home buyers are being encouraged to
consider new builds with the enticement of additional state government
support. This is especially the case in Tasmania where the recently inflated
First Home Builder is seeing buyer interest grow in suburbs along Hobart’s
eastern shore in particular Old Beach, Howrah, Tranmere and Oakdowns.
Brendon Hulcombe
CEO - HERRON TODD WHITE
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Tasmania – Property Report
January 2014
Tasmania
Tasmania’s property market remains stable
though higher sales volumes were achieved
towards the end of 2013. Nonetheless capital
growth rates remain elusive. With this in mind, it
is important for first home buyers and investors
to focus on centrally located suburbs offering a
good range of facilities, which are popular with
renters and buyers alike.
Hobart
OPPORTUNITIES FOR FIRST HOME BUYERS
Tasmanian first home buyers were presented with a generous helping hand
at the end of 2013 with the announcement of the increased First Home
Builder Boost (FHBB).
Tasmanian first home buyers were
presented with a generous helping
hand at the end of 2013 with the
announcement of the increased
First Home Builder Boost (FHBB).
First introduced in January 2013, the FHBB was originally worth $8,000 for
first home owners purchasing a newly built home or who are building a new
home. However the Boost failed to generate significant levels of building
activity and employment within the state’s construction industry.
As a result, the FHBB has now been increased to $23,000 for contracts
entered into between 7 November 2013 and 31 December 2014. Coupled
with the $7,000 First Home Owner Grant, this means first home buyers
building or buying a brand new home can access entitlements worth
$30,000.
For first home buyers keen to take advantage of the more generous FHBB,
suburbs along Hobart’s eastern shore are proving popular. In particular,
higher volumes of land sales relative to other suburbs have been achieved
in Old Beach, Howrah, Tranmere and Oakdowns. Median lot prices in these
suburbs range from $100,000 to $190,000.
Old Beach, Howrah and Tranmere are waterside suburbs – Howrah being
located closest to Hobart’s city centre. Tranmere is a fast growing riverside
suburb located approximately 15 kilometres from the CBD. Over 90%
of residential property in Tranmere is owner-occupied and the suburb is
popular among families, which bodes well for long term growth prospects.
Suburbs on the outskirts of Hobart offer greater affordability for
established home buyers though care must be taken. Homes are available
in the likes of Gagebrook or Bridgewater for as little as $100,000.
However along with Herdsman Cove and Risdon Vale, these suburbs
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Tasmania – Property Report
January 2014
contain significant amounts of public housing and in some cases
commercial industry. Despite their affordability, these locations offer
limited employment prospects and property values have been hard hit by
the downturn. Given Tasmania’s current, slow economic climate there is
little prospect of an upturn in the immediate future.
OPPORTUNITIES FOR INVESTORS
The Hobart suburb of Kingston is a fast growing area approximately 15
kilometres south of the CBD. It is also the location of a large Vodafone Call
Centre that offers valuable local employment opportunities. While Kingston
has generally higher prices, it may offer investors stable rental returns and
capital growth.
Launceston
First home buyers/builders are purchasing affordable blocks of land in the
Launceston suburbs of Prospect Vale, Newnham and the satellite villages
of Longford and Perth. Median prices for vacant land in these suburbs
range from $84,000 to $100,000.
The townships of Legana, Riverside and Prospect have also experienced
higher volumes of vacant land sales with median prices ranging from
$115,000 to $159,000.
Along with Central Launceston,
suburbs such as Newstead, South
Launceston, West Launceston,
Invermay and Kings Meadows
have recently experienced
increased volumes of sales.
These suburbs all offer a good range of services and facilities, and are
popular with renters and owner occupiers. Longford and Perth tend to be
the more affordable and are sought after by commuters.
To the north, Ravenswood, Rocherlea and George Town offer homes
available for less than $100,000. However these suburbs are generally
lower income areas that attract limited investor interest.
Along with Central Launceston, suburbs such as Newstead, South
Launceston, West Launceston, Invermay and Kings Meadows have
recently experienced increased volumes of sales. Central, older style
units and modern residential units in Prospect and West Launceston are
available from around $250,000. Older style units in South Launceston,
Prospect, Invermay and Riverside can be purchased from $150,000. Older
style houses in Kings Meadows, Invermay and Newnham are listed from
just under $200,000.
North West Tasmania
The most popular areas of the north west offering affordable vacant land
for first home buyers include Park Grove, Shorewell Park, Stony Rise and
Shearwater. Median land prices in these areas range from $77,000 to
$100,000.
For investors considering the north west region, older 2- and 3-bedroom
homes can be purchased from around $200,000 in Devonport.
The recent opening of the Nelson Bay River iron ore mine in the Tarkine is
set to create 120 additional jobs. With this in mind, properties in Burnie,
Wynyard, Table Cape, Rocky Cape or Sisters Beach – all within a 45 minute
commute to the mine, may offer rental demand plus the potential for some
capital growth.
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