tasmania invaded !

[Waverlybay]

http://www.themercury.news.com.au/common/story_page/0,5936,6866596%5E921,00.html

Quick summary of article:

1) Tassie property prices in the outter areas is going ballistic - (ed: but that should hardly be a surprise given that the same trend has unfolded in the mainland states).

2) One in three buyers are investors from the mainland

3) Ulverstone's median house, Penguin went up 47 per cent to $138,000 and Burnie grew 22% , Battery Point 78% in the March to June quarter 2003

Cheers
WB

 

[brains]

Interesting article, id love to know what the yield and vacancy rates are in some of these areas. Especially the north west.

 

[taz]

Hi Brains
The average rent that you would pick up would probably be $120 - $160 range a week in the Devonport, Ulverstone and Penguin areas.Fairly low vacancy rates
The Burnie area has a fair few housing commission areas which probably explains the lower median price .Its has had a few big businesses shut or scale down in the last 10 years. Don't know much about the vacancy rates down that part of the coast.

Cheers
taz

 

[propeller]

The fact that growth is attributed to speculating investors is a slight worry for speculating investors !. What's driving the market long term ? I think many mainlanders see it as just cheap R/E to play with for a couple of years then offload as opposed to actual growth based on normal parameters- could be a tad risky if everyone decides to sell at the same time too for example.

 

[taz]

It may be just coincidence but the property boom here started at about the same time that the new twin ferries "Spirit of Tasmania 1 & 2" began running from Melbourne to Devonport. The next new ferry starts from Sydney at Christmas time. I think people coming off the ferries thought the property was just to cheap to pass up.IMHO I don't think growth will be great long term once things level up in comparision with the mainland. There are some people here at the moment that think they are making a killing selling their PPOR for a giant price compared to what they payed but they seem to forget that they need to buy a new one to live in.

Cheers
taz

 

[Kevmeister]

Unless I'm mistaken Tasmania's population is on the decline, so unless speculators are subscribing to the "greater fool" theory I wonder how rentals will stack up long term.

 

[brains]

Thanks Taz and how negative of you Kev...you.....dreamstealer.

 

[Ruby]

Originally posted by Kevmeister
Unless I'm mistaken Tasmania's population is on the decline, so unless speculators are subscribing to the "greater fool" theory I wonder how rentals will stack up long term.

Well you were right Kev......but now you are wrong

http://taspop.tasbis.com/webapps/site/588/widgets/1401/info/info-page.html?info_id=1

Population is such an important issue to the Tasmanian Government and they have some great websites.

Tasmania's Population web site
http://taspop.tasbis.com/1399/home/home.html

 

[Kevmeister]

Glad to know I'm not stealing anyone's dreams, then.

 

[brains]

HAHA!!!....was a joke Joyce

Originally posted by Kevmeister
Glad to know I'm not stealing anyone's dreams, then.

 

[L Bernham]

It is a concern.

Burnie especially has a decliining population ever since "the pulp" (APPM) and tioxide factories shut down, this affected a large chunk of the population it also affected the wharfies jobs and the railroad jobs, then as people started leaving it affected the service industries previously supporting the ex-workers.

Having lived there for a few years I can't undestand why anyone would be buying there unless as some one suggested they are relying on the greater fool theory.

There is no reason that Tassie property should go up (sorry mum and dad). Land is not at all scarce. (Holland has close to the population of Australia but its got as much land area as Tassie).

Mainlanders cashing in on mainland prices and retiring in Tassie - good for them! - smart move. Use the extra $300K to buy some extra jumpers, a good drop of rum and retire in a great state. Just dont expect to sell for a profit and you wont be dissappointed.

I also had a laugh today when an aquaintance told me they had recently bought in Tassie. Asked him why and he said "it was cheap". Asked him how much rent and he said "not too sure but it doesnt matter as hes in it for the capital gain". I said "good luck".
The fact is that the rent probably aint bad, but in some places ie Burnie, the average tenant is a little different to the average tenant in rest of Oz. Returns are therefore a little more riskier. All little things to factor into any price paid that many dont seem to be doing.

another memory, I knew a landlord in Devonport who said after expenses, the rent he got was just enough to make it worth the hassle, and he managed it himself. This was quite a few years ago.
I personally think the whole Tas boom will be one of the things people talk about as one of the ridiculous stories of the big "property crash"

 

[cad]

Hi all,

Here's my 2 bobs worth.

You can buy a house in Tassie for 60k and receive $160pw rent with low vacancy rate...not bad
No work in Tassie though=High unemployment many receive rent assistance=rent paid.

Cheers cad

 

[L Bernham]

If you can find a place that you can get buy $60K and get $160 pw rent then I would be very surprised and I would say go ahead but I'd be first in line.

Median rental is $125 pw in Devonport, Burnie and Ulverstone combined.
In Launceston its $175 pw.

Median House price in D, P and U is $175K

and in Launceston its $215K

ie Gross rental yield between 3.5% and 4%. lets ignore expenses.

Either way I can think of a lot more liquid, better diversified investments with a higher return thanks.
I'd like to know what town you may be referring to. Was it an agent that gave you this information?

If its true its most likely one of the mining towns, Queenstown, Zeehan. The rent needs to be high because of the guaranteed capital loss that will occur. As most people know you can buy down there for $30K
ie http://www.realestate.com.au/cgi-bi...7&f=0&p=30&t=res&ty=&snf=rbs&cu=&fmt=&header=

Rent on this would be around $80-100 a week.
Vacancy rate is a lottery and 10-20 years down the track could see Queenstown another ghost town (there are plenty down that way) . You pay for what you get.
ITs a small market.