Tasmania

Hi All,
Never thought I would start a thread on Tassie but wanted to get some people's opinions, ecspecially those with current investments there.

I have been reading and through my own research have seen yields achievable around the 12% mark.

Hobart in particular is the only capital with a normal behaving property market in the fact the median house price has been rising at the same time unemployment has been lowering, this unlike other capitals where house prices are rising along with unemployment (not a natural phenomenon but the graphs I saw did not take into account immigration).

This being said, Tassie is basically it's own country with own economy and the obvious concern is what will sustain that and continue to drive prices.
It is my understanding that most of the young workforce head to the main land to pursue a career whilst the retirees take their place. So maybe there is less unemployment because less people are there to do the jobs? But then again retirees moving in will likely be downsizing and have plenty of cash to spend.

A number of conflicting points to consider so keen to hear others observations.
 
I don't have investments in Tas but I did grow up there so I'll throw in my 2 cents.

If you can get 12% yields, who cares about CG? If you get any it'll be a bonus :)

I guess is like any regional investment, slower growth and good yields. Be careful where you buy though, some areas look close to the cbd but in Tassy mind is a million miles away. Tas people don't like to travel more than 15 mins to work, and many high yielding areas are very much bottom of the barrel clientele. Think spray painted numbers on housing, that kind of look.

That said, sometimes knowing a place can make you second guess good numbers ( spray painted or not! ), and the fact is you're not going to live there!
 
I have never been to Tasmania.
Is there another language there or is English common?

Also do they have the highlands there? I would love to see the highlands .
 
We bought & sold off again, three properties there a long time ago. At purchase price, two of them were around 12% yield. The other was a bit of a gamble that didn't pay off. It was a very cheap place with a huge yield, but the scumbag neighbours keep causing trouble, so we sold. Made a slight profit, but not a lot.

The other two we had bought at the bottom, or thereabouts of the market & we sold after prices increased. One we held for around ten years, the other not as long. We had no trouble with them at all. One was in Launceston, the other in Hobart.....but in the outskirts. The one downfall was the very large PM fees we had to pay. The best of the two was in Launceston. We paid something like $67k for it & sold for a gain of around $100k.
 
Hey Skater thanks for your story and experience in Hobart and Launceston. Would you ever go again, in Tasmania? (I.e. would you buy again?)
 
Hey Skater thanks for your story and experience in Hobart and Launceston. Would you ever go again, in Tasmania? (I.e. would you buy again?)

I have no issues with Tassie, but I'm not really buying a lot at the moment. It's time to slow it down & retire, so no, I'm not looking there at the moment, however I never say never. :D
 
Thanks for the replies all.
Jess that was with my plugging in some rough figures and not taking into account the larger PM fees but still by all accounts 10% is achievable.

I just find tassie an interesting prospect and as I said it is the only market behaving normally right now.
 
Investors tend to flock to Tasmania for the yield, it has a reasonably predictable cycle but it is a very long one.

Prices get unaffordable in Sydney, Melbourne and eventually Brisbane. As yields get tiny in those cities, people start looking elsewhere and eventually realise that Hobart is cash flow positive.

People then flock to Hobart, it increases in value quickly based on the demand. It then goes nowhere for another 10 years because there's very few other growth drivers.

It's not going to be appealing to Asian investors as their motivators are capital based (spend enough money and you get a PR visa). You'd have to buy a lot of properties in Tassie to qualify, it's much easier to simply buy a few in Melbourne or Sydney. I read an article this morning that suggested that the Chinese are just starting to wake up to Brisbane.
 
Very interesting Peter.
Where do you believe Hobart current sits in this cycle?
House prices are rising but nowhere near the rate of other majors and given that it would seem an opportune time to get in just before everyone else does?
 
I'm not actively in the market atm but I'll throw in my 2 cents.

Market has moved in the inner suburbs, my agent in Sandy Bay has been saying he's been very busy for over a year now. Lots of people at home opens. A few reno and flip deals have been happening in the area that I've noticed eg 93 King St Sandy Bay http://www.realestate.com.au/property-house-tas-sandy+bay-116734879
Was up for auction next month but already sold prior.
Post reno pics here: http://www.onthehouse.com.au/reports/property_profile/12749054/93_King_Street_SANDY_BAY_TAS_7005/

I have a couple in the northern suburbs but not sure where the market's at exactly, haven't kept a close eye on it. Agent tells me sales volumes have been increasing, prices not so much yet.

Rental demand is very good in outer and inner Hobart suburbs. Many potential tenants at viewings, keeping in mind that northern suburbs are home to a lesser quality tenant.

A third of Tasmanians are on welfare, a third work in the government sector and the rest in private. A large chunk of the govt employees of course work in some capacity to support the welfare dependents, and some private businesses in turn exist solely to provide services to the government sector. Doesn't paint a pretty picture does it? Welfare is the biggest industry here :eek:

But it is true that unemployment has dropped and the falling Aussie dollar means good things for this export and tourism dependent economy. Especially with the ever increasing numbers of wealthy Chinese tourists to Tassie.

Also retirees moving here typically have cash and don't need to work. Long term though the state will need to do something to stop the young ones leaving en masse.

Some links on recent happenings in the Tassie property market:

http://www.propertyobserver.com.au/forward-planning/investment-strategy/market-trends/39775-hobart-shines-in-2015-s-strong-start-but-house-price-growth-set-to-slow-corelogic-rp-data-s-january-results.html

http://www.yourinvestmentpropertymag.com.au/market-report/tas/tas-excerpt-from-the-2015-april-market-report-198349.aspx
 
I am currently researching Tasmania as a tourist. It rates in the Top 10 destinations worldwide at Lonely Planet, and has a reputation atm as the place to go for international Celebs who want to buy a waterfront or wilderness retreat in tune with Nature. Like Byron Bay was thirty to forty years ago.

It is also on my list of places to live in the future, last time I looked on the web with a view to purchasing a home for myself there, every second property for sale had water views.
 
Of the vultures; every time I see a flipper reno of that colour scheme and style, I think 'there is another student of the Cherie Barber reno for profit school'! Not that that's a bad thing of course, but her style is very distinctive and it is likely that that property is a project of one of her students or something.
 
Of the vultures; every time I see a flipper reno of that colour scheme and style, I think 'there is another student of the Cherie Barber reno for profit school'! Not that that's a bad thing of course, but her style is very distinctive and it is likely that that property is a project of one of her students or something.

It's also the colour scheme of Property Secrets.
 
I could definitely retire there. I'm a long way from retirement but I could imagine spending my retirement years straddling say a few months during summer in Tax, and the rest somewhere warmer, maybe northern NSW or something. With, of course, a few months of overseas travel every now and then!
 
Happy with our purchase

We have one in Launceston and getting over 8.5% yield. Happy with that as a positively geared property for us.
 
A third of Tasmanians are on welfare, a third work in the government sector and the rest in private. A large chunk of the govt employees of course work in some capacity to support the welfare dependents, and some private businesses in turn exist solely to provide services to the government sector. Doesn't paint a pretty picture does it? Welfare is the biggest industry here :eek:

Not quite.

Circa 240k workforce with 27k government employees so roughly 10% of the total workforce is employed by government

61% workforce participation rate and 6.5% unemployment.
 
Not quite.

Close enough.

Only a minority of Tasmanian households derive their income from participation in the private sector, and few indeed are dependent on the portion of the private sector traded out of the state. The 2011 census revealed that over a third of Tasmanian households derived their sole or primary source of income from a Commonwealth government payment: old-age pension, disability, supporting parent, and, of course, unemployment.

While the census does not record the proportion of households that derive their income from a government job, almost another third of the Tasmanian economy was made up of public services (health, education, welfare, administration, policing) and government business enterprises, which includes everything from the ports, railroads, shipping, buses, three electricity corporations, forestry establishment, maintenance, and harvesting, gambling, horse racing, motor-accident insurance, irrigation development, and management of tourist and cultural sites.

On top of this, it is estimated that up to 10% work for a private corporation whose sole client is government: road construction, building maintenance, or outsourced government services in the welfare sector.

These numbers suggest as little as a quarter to a third of Tasmanian households derive their livelihood from the genuine private sector. Of them perhaps a third gain their income from wholesale and retail trade and associated logistics, another third from residential and commercial construction and maintenance. The clients of both these groups depend largely on public-sector incomes, leaving only about 10% of all households making a living from the traded private sector.

http://www.crikey.com.au/2013/01/30/whats-wrong-with-tasmania-australias-freeloading-state/
 
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