Tas suburbs where investors get best returns

From West Coasts hubs to Hobart’s most affordable suburbs, these are the areas with the best investor prospects.

Tassie’s West Coast is a hot spot for sharp prices and great rental yields. No.50 McNamara St, Queenstown is listed with Roberts Real Estate at “Offers over $420,000”. Picture: realestate.com.au

INVESTOR activity has been declining in Tasmania in recent years, an issue that compounds the state’s rental struggles.

But new figures show where people can get the best return on their investment.

Real Estate Institute of Tasmania statistics show that investors purchased just 1023 Tasmanian properties last year. This was fewer than 1558 in 2022, 2329 in 2021 and 1739 in 2020.

REIT records reveal that about 13 per cent of the March 2024 quarter’s total transactions were investor sales. That was about the same as the previous quarter, but higher than September, June and March 2023.

In March, yields increased to reach 4.4 per cent in Hobart and Launceston, and 4.9 per cent in the North West.

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Hobart’s more affordable areas have the most impressive yields.

Meanwhile, new data from PropTrack has put a spotlight on where investors can get the most back for their buck.

In greater Hobart, the highest returns were in some of the most affordable suburbs, led by Gagebrook at 5.9 per cent.

Clarendon Vale, Bridgewater, Chigwell, Risdon Vale and New Norfolk’s yields were all higher than 5 per cent — ranging from 5.1-5.6 per cent.

For unit buyers, Hobart’s northern suburbs dominated the top of the charts with Moonah at 5.4 per cent alongside neighbouring Lutana, Glenorchy and Claremont ranging from 5-5.3 per cent.

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Eastern Shore suburb Rokeby showed strong yields for units (4.9 per cent) and some of the largest median house price growth over the past five years. It pushed from $310,000 to $578,00, an 86 per cent increase.

Glenorchy’s median unit price increased by 54 per cent over five years, from $285,000 to $438,000.

No.21 Veronica Cres, Gagebrook is priced at $395,000-plus with LJ Hooker Pinnacle Property. Picture: Supplied

Out West, yields were strong, with Queenstown houses returning 6.9 per cent. Houses in Launceston’s Ravenswood were the next best at 6.2 per cent and Mayfield was just behind it at 6 per cent.

East Devonport was the leader for regional units with its 5.8 per cent yield, followed by Launie’s Newnham, Kings Meadows and Mowbray, 5.3-5.6 per cent.

PropTrack senior economist Eleanor Creagh said gross rental yields can provide investors a useful starting point in their property search.

“A higher yield can indicate a potentially more profitable investment, particularly for cash flow,” Ms Creagh said.

“However, a lower yield in a high-growth area might still be attractive if the investor is seeking capital appreciation.”

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PropTrack senior economist Eleanor Creagh.

Ms Creagh said more property investors entering the market could help address supply shortages in the rental market.

“Increasing investor activity should add to the pool of long-term rentals, helping to ease rental market constraints and the chronic shortage of rental supply that has fuelled strong rental price growth and record high rents.”