The Tasmanian market is starting 2025 strong, experiencing significant growth and transformation, driven by economic dynamics and large-scale infrastructure projects.

The Real Estate Institute of Tasmania’s quarterly report for December 2024 highlights a robust recovery in the state’s property market compared to 2023, with transaction volumes exceeding expectations.

The cumulative value of sales reached its second highest level on record, reflecting strong market confidence.

In 2024, Tasmania saw a significant increase in total sales, with 976 more transactions than the previous year (11.1 per cent growth).

First-time homebuyers, investors, and mainland buyers were particularly active throughout 2024, eager to enter the market before its full rebound.

Despite external economic challenges such as rising living costs, slowing population growth, and high interest rates, the market displayed remarkable resilience.

While median prices held steady over the past 12 months, growing buyer demand is expected to place upward pressure on prices in the coming year.

Despite a slight dip in sales during the December 2024 quarter compared to the September quarter, performance remained notably stronger than the same period in 2023.

The rental market continues to face intense competition, with the vacancy rate reaching a historic low of just 0.82 per cent one of the lowest in Australia.

This scarcity of available rental properties has resulted in increased rental prices, further exacerbating the affordability challenge.

The rental market remains under strain, with affordability at its lowest point since 2008.

Currently, only 36 per cent of advertised rental properties are affordable for middle-income households, and just two per cent are affordable for lower-income households.

This disparity is exacerbated by a 48 per cent surge in rental prices since the pandemic, making it increasingly difficult for many to secure suitable housing.

Tasmania is undergoing transformative developments, with the state government committing over $284m to crucial land transport projects.

Among these is the significant upgrade to the Lyell Highway between Granton and New Norfolk, which aims to improve road safety and enhance travel efficiency.

Tasmania’s infrastructure pipeline is set to surpass $30bn in investments over the next decade, driving job creation and stimulating economic activity.

These developments are expected to have a positive impact on both the property sales and rental markets.

Tasmania’s property market faces a delicate balance.

While significant infrastructure projects provide a strong foundation for future growth, addressing the rental affordability crisis will require swift and strategic policy action.

With careful planning and targeted interventions, Tasmania can continue to thrive as a sought-after destination for property buyers and renters alike.

Read more insights in the National Market Update from the Property Investment Professionals of Australia

Originally Published: Samantha Spilsbury, Buyers Agents Tasmania | Hobart Mercury, Money Matters | 22 May 2025 | Page 5

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