State thrives despite national housing market

by Madison Utley10 May 2019

While housing prices fell by 7.2% nationally in the year ending April 2019, one capital city saw values rise by nearly 4%, the largest jump evidenced among the only three major cities to experience any growth at all.

According to the MyState Bank Tasmanian Economic Update, Tasmania is also the only state to have seen an increase in mortgage applications (+1.5%) over the year to December 2018.

Mortgage applications in Victoria and NSW fell by 15.4% and 19.1% respectively over the same period.

MyState CFO David Harradine said, “Australian homeowners see the appeal of selling up in markets like Sydney and Melbourne and buying in Tasmania, where it is more likely they’ll be able to afford a bigger property for a much cheaper price.”

According to Harradine, the consumer confidence evidenced in Tasmania has led to significantly higher household consumption than in the rest of Australia.

“The state’s strong economic conditions and attractiveness as a lifestyle choice are also big drawcards for residents on mainland Australia, fuelling housing demand,” he added.

That said, the population growth is putting pressure on the Tasmanian rental market.

Hobart’s rental yield position has increased to 5.2%, the highest in the country, with the median weekly house rent at $450, $10 more than Melbourne.

However, Tasmania leads the nation in number of residential building approvals at 24% in the year ending March 2019, so it is unlikely the lack of housing will be a long-term issue.