Tasmania even more affordable as sales volume shrinks

Tasmania, Australia’s least expensive property market, has become even cheaper.

Its median house price fell 1.6% in the past year to $305,000, according to the Real Estate Institute of Tasmania. It was $330,000 in the March quarter.

At the same time the volume of house sales in Tasmania slumped 10.2% to turnover levels that haven’t been seen since the early 1990s.

Sales volume in Hobart was down by 5.6%, Launceston volumes by 5.2% and sales in the state’s northwest fell 13.4%.

The turnover data continues a trend evident in the 2010 June quarter, which reported a 20.8% reduction in house sales across Tasmania compared with the 2009 quarter volumes.

Sandy Bay was the most expensive suburb in the June quarter, with a $647,500 median, followed by Battery Point at $645,500. Sandy Bay’s median price in the 2010 was $655,000 and $599,000 in 2009.

Four other suburbs on the 10 most expensive suburbs in the state have recorded strong gains over the past two years, including Seven Mile Beach, up from $398,000 in the 2009 June quarter to $475,000; West Hobart up from $427,500 to $495,000; Sandford up from $426,000 to $497,500 and Mount Nelson up from $417,500 in 2009 to $615,000.

But two of the cheapest suburbs on the 10 cheapest locations recorded significant declines in median prices, with Ravenswood down from $190,000 in June 2009 to $142,500 and Gagebrook down from $160,250 to $150,000.

REIT president Adrian Kelly recently noted that with many overpriced properties on the market that “anyone currently selling a house in Tasmania needs to be willing to meet market prices or be ready for their house to sit on the market for up to a year or more".

The release of the data followed the recent new home lending figures from the Australian Bureau of Statistics that showed the number of loans for the construction or purchase of a new dwelling fell by more than 12% in June.

Housing Industry Association executive director Stuart Clues says the figure is a warning that things are softening in the housing market.

"New home lending is a leading indicator of residential building activity, so unfortunately the current low number of loans reinforces HIA's view that dwelling starts will fall by at least 10 per cent in calendar year 2011," he says.

Master Builders Association Tasmania executive director Michael Kerschbaum notes that in recent years the supply of more than 3,000 houses each year coupled with a population growth of about 4,000 a year means the state is almost square.

Photo courtesy of Tourism Tasmania and Nick Osborne