After a stellar 2018, it appears residential property market conditions in Tasmania are set to favour investors and first home buyers in 2019, according to Real Estate Institute of Tasmania (REIT).

Hobart’s median house price eased back from its high at the end of the June quarter to $475,000 in September, while Launceston prices stabilised at $330,000. The median price for properties in the state’s northwest settled at $270,000.

While rental accommodation demand is robust and continues to force up rents, rental vacancy rates are increasing. This situation indicates the rental market is starting to free up, notes REIT.

Longer-term house prices across the state are 7.2% higher than 12 months ago, while unit and townhouse sales continue to rise.

First timers have already responded to changing market conditions with 2% more new buyers in the Tasmanian market than a year ago. First-time buyer activity was highest on the northwest coast (19% of house sales), 17% in Hobart and 11% in Launceston.

While a slower market was anticipated, it is highly probable that property sales in Tasmania will top $4 billion in 2018, which is a stronger result than 2017. REIT President, Tony Collidge notes that Tasmania’s appeal as a lifestyle destination combined with steady economic conditions has created promising conditions for long-term real estate growth. "There is still a strong buyer presence in the market, and such demand will minimise any impact on future prices over coming months. I do not foresee prices falling away as they have in some of the mainland centres."

Tony added, “We are a small market with limited supply. The lack of stock particularly in Southern Tasmania will continue to put upward pressure on prices.”