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Tasmania 2012: Expert Predictions
March 16, 2012
After a difficult year in real estate, many Tasmanians are wondering if the market is set to improve in 2012. To gain insight into the year ahead, we spoke with three experts in the Tasmanian real estate market, Adrian Kelly, President of the Real Estate Institute of Tasmania & CEO of View Real Estate, John Abell, Director of City and Rural Real Estate and John Ackroyd, Director of John Ackroyd Real Estate.
Broadly speaking, what are your expectations for Tassie Real Estate in 2012?
Adrian Kelly (REIT/VIEW Real Estate): I expect that we will see an increase in the number of sales compared to the past two years. History shows that when the real estate market reaches the bottom of the cycle that it generally stays there for 1 to 2 years. Given that we reached the bottom of the cycle two years ago, I’d expect that 2012 will be a year for improvement. This doesn’t mean that trading will be easy but rather that some confidence will return to the market particularly now that interest rates seem to have settled.
John Ackroyd (John Ackroyd Real Estate): I see the market remaining fairly steady. Investors and first home buyers will have the opportunity to enter the residential market at very reasonable and affordable prices, and realistic vendors will still achieve a fair return. Whilst prices in 2011 declined by some 6%, it would appear that the property market has bottomed out and therefore it should remain that way for the remainder of the 2012 year.
What trends do you predict will come forth or continue in 2012 ?
Adrian Kelly: We will see an increase in the number of interstate purchasers and also an increase in the number of first home buyers. This will be due to confidence returning to the market place and rental returns remaining reasonable. First home buyers are imperative in a small state like Tasmania as often they are the start of the cycle in that their purchase creates second home buyers, third home buyers, etc.
John Abell: I believe investors will ease back into the market but they will want solid returns either from commercial or residential properties.
John Ackroyd: The investor is slowly coming back into the market, and this should continue to a certain degree and as long as the economy remains reasonably buoyant. Tasmanian real estate should continue to be attractive to all facets of buyers, including interstate people looking to relocate to a comfortable lifestyle, heading toward retirement in some cases, and others looking to escape the continuing weather issues in some other states to experience Tasmania’s wonderful four seasons.
What are the opportunities for buyers to keep an eye out for in 2012?
Adrian Kelly: Those properties where sellers are genuine about achieving a sale or where the asking price has remained high for a period of time and are now starting to decrease. Also, keep an eye out for those properties which are being poorly marketed as these properties can be good value; they’re unfortunately being undersold.
John Abell: Opportunities will exist for investors in 2012. As property prices have eased, returns have grown and with interest rates also falling, solid returns from property are occurring. Cities and towns with higher education facilities are the areas I suggest buyers look closely at.
John Ackroyd: The residential market is seeing quite a lot of listings becoming available at exceptional asking prices, which is attractive to both home occupiers and investors. Buyers should closely monitor this market and be aware of what is occurring.
More specifically, which key suburbs do you predict growth for in 2012?
Adrian Kelly: Obviously the major population centres of Tasmania will always achieve reasonable capital growth. I’d suggest looking at any areas on the coast line (or close to it) but are yet to see any real capital growth in recent years. I have a strong feeling that in the years to come Tasmania will truly be discovered for its “clean” image including pristine waterways and the like. Waterfront property will generally always be sought after.
John Abell: The entire North West Coast region is likely to experience slight growth this year.
John Ackroyd: The main growth areas of the state at present are suburbs of Hobart, both on the Eastern shore and the Northern suburbs, as is with Launceston. Quite interestingly, the regional city areas of Devonport and Burnie are becoming very popular with buyers with several major projects about to commence and/or on the drawing board. These areas are well positioned to see major growth over the next five years, now with major shipping ports (both freight and passenger related) and two regional Airports with a flight time of around 45 minutes or so to Melbourne.