Report highlights sharp rise in sales transactions, but rental pressures continue to deepen
Tasmania’s property market has entered the year on a strong note, buoyed by increased transaction activity, infrastructure investment and growing buyer confidence, according to the latest data from the Real Estate Institute of Tasmania (REIT).
The REIT’s December 2024 quarterly report signals a notable rebound from the previous year, with total sales volumes up by 11.1%. The state recorded 976 more transactions in 2024 than in 2023, pushing the total sales value to its second-highest level on record.
Despite broader economic pressures such as high interest rates, a slowing population and rising living costs, buyer demand has held firm. The report notes sustained interest from first-home buyers, investors and purchasers from mainland Australia, many of whom acted ahead of what they anticipate to be a full market recovery.
While the December quarter saw a slight decrease in activity compared to the previous quarter, performance remained well above the same period in 2023, pointing to steady demand.
Property prices remained stable over the year. However, with demand rising, upward pressure on prices is anticipated in the months ahead.
Rental market remains under strain
The rental sector continues to grapple with acute supply shortages. Tasmania’s vacancy rate dropped to 0.82% – among the lowest nationally – driving further rent increases and intensifying the state’s affordability crisis.
According to the report, rental affordability is now at its lowest level since 2008. Only 36% of rental listings are within reach for middle-income earners, while just 2% are considered affordable for low-income households. Since the onset of the COVID-19 pandemic, average rents have jumped 48%.
Government responds to housing supply pressure
In a bid to address the housing shortfall, the state government has moved to expand development boundaries in Greater Hobart. Housing minister Felix Ellis announced an extension of the Urban Growth Boundary, unlocking up to 615 hectares for new residential construction, with the potential to deliver 10,000 homes.
The move was welcomed by the Housing Industry Association (HIA), which has been pushing for more land to be made available.
“The extension of the Urban Growth Boundary will unlock up to 615 hectares of land for residential development, with the potential for 10,000 new homes to be built,” said Stuart Collins, HIA executive director for Tasmania.
Tasmania’s infrastructure agenda is expected to fuel future growth across the state. More than $284 million has been committed to land transport initiatives, including upgrades to the Lyell Highway between Granton and New Norfolk. Over the next 10 years, infrastructure spending is projected to exceed $30 billion, boosting economic activity and job creation.
While these developments are expected to bolster both the sales and rental markets, analysts suggest policy support will be essential to improve housing affordability and meet long-term demand.
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