Northern Tasmania Real Estate Market Update: September 2023 

The Real Estate Institute of Tasmania has unveiled its highly anticipated September 2023 Quarterly Report, shedding light on the latest trends in Northern Tasmania's residential real estate market. Here's a look at the key insights from the report.

Market Slowdown and Influencing Factors The report confirms that Northern Tasmania's real estate market is experiencing a notable slowdown. Several factors have contributed to this deceleration, including rising interest rates, an increased cost of living, geopolitical tensions in the Middle East, local economic uncertainties, and political instability. These dynamics have collectively eroded buyer confidence to levels not witnessed in over a decade.

Northern Tasmania: The Most Volatile Market Northern Tasmania stands out as the most volatile real estate market in the region over the September quarter. Not only did it record significantly fewer sales, but it also experienced the most substantial decline in median prices compared to all other regions in the state. Of the 517 transactions in Northern Tasmania, it represented 24.3% of the total statewide transactions. However, this figure represented a significant drop of 14.0% from the previous quarter and a 5.7% decline compared to the same period last year.

Key Highlights from Northern Tasmania Here's a summary of the findings specific to Northern Tasmania from the September Quarterly Report:

• There were 517 transactions in the region, totaling $281 million. This marked a 14.0% decrease from the June quarter and a 5.7% drop from the same period last year.
• A total of 360 house sales occurred with a median price of $542,500. The median price experienced an $18,000 decline over the quarter and a $12,500 decrease compared to the same period last year. Sales numbers saw a 19.5% drop over the quarter and a 10.4% decrease from the same time last year.
• 86 unit sales were recorded with a median price of $453,000. Although sales numbers increased by 2 over the quarter, they dropped by 4 compared to the same period last year. The median price, on the other hand, increased by $20,500 over the quarter and a notable $51,500 over the year.
• Land sales remained stable at 63 transactions, which was just 1 less than the previous quarter but 11 more than the same period last year. The median land sale price for September was $260,000, reflecting a 6.3% decrease from June and a 2.1% dip from the same period last year.
• The time it takes to sell a house in Northern Tasmania increased significantly, averaging 41 days during the September quarter. This was up from 49 days in the previous quarter and 26 days in September of the previous year. Back in September 2021, it took just 18 days to sell a house.
• A total of 29 sales over $1 million were recorded in Northern Tasmania in the September quarter. This marked a decrease of 6 from the previous quarter but an increase of 7 compared to the same period last year. Northern Tasmania was responsible for 15.4% of all sales exceeding $1 million.
• The number of first-time homebuyers (73) decreased by 21.5% compared to June's results but was just 1 sale short of what was achieved at the same time last year. Of the first-time buyers, 54 acquired houses, 10 purchased units, and 9 invested in land.
• Investor numbers (74) were 14 transactions higher than the last quarter but 21 sales less than the same time last year. They still lag significantly (-48.0%) behind the numbers recorded in September 2021. Traditionally, investor sales in this region constituted between 25-35% of all sales. In September 2023, they represented just 14.3%. The median acquisition price for rental properties was $300,000.
• Rental vacancy rates increased from 1.4% in June 2023 to 1.8% currently. Compared to the same period last year when the vacancy rate stood at 1.0%. The surplus of available rental properties has led to a downward pressure on rents, with rents beginning to decrease in many sectors of the rental market. Property managers are reporting fewer rental inquiries, and it's taking longer (up to 4 weeks) to lease a vacant property. The median rent for a 3-bedroom home in Northern Tasmania is now $445 per week, down $5 per week from the previous quarter.
• Purchases by mainland buyers (58) decreased by 10 sales over the quarter and were down by 37.0% (or 34 sales) compared to the same time last year. In September 2021, 171 mainland buyers acquired property in the North of the State, with Northern Tasmania accounting for 23% of the total mainland buyer acquisitions.
• The most expensive suburbs in Northern Tasmania were East Launceston ($1,000,000), Grindelwald ($867,500), and Blackstone Heights ($810,000), while the most affordable were Waverley ($293,000), Mayfield ($317,500), and Ravenswood ($330,000).
• Suburbs with the highest turnover included Riverside (18), George Town (16), and Hadspen, Legana, Newstead, and Youngtown, each with 15 sales.
• Launceston had the highest number of municipal sales with 241, followed by West Tamar (87), Meander Valley (85), and Northern Midlands (44).

Market Adjustments and Future Outlook As is often the case, real estate markets are influenced by the prevailing political and economic conditions. Rising interest rates and increased living costs have impacted the Northern Tasmanian market, leading to adjustments in property prices and rental rates. Despite the slowdown, the market has shown resilience and hasn't declined as drastically as some experts predicted. The significant growth in the number of properties available for sale and rental has created a unique opportunity for both buyers and tenants. With reduced competition and increased choices, the market is in a state of transition.

In conclusion, the September 2023 Quarterly Report from the Real Estate Institute of Tasmania provides a comprehensive overview of Northern Tasmania's real estate market, characterised by slowing trends and a shifting landscape. As the market adapts to evolving economic conditions, it will be interesting to see how this transformation continues to shape the real estate landscape in the months ahead.

Information source: REIT