Island attractions keep undervalued Tasmania on the radar for affluent investors
Prize views are a given in the Apple Isle’s for-sale, rich lifestyle attractions along the mid-east coast through to the Tasman Peninsula.
Lured by its pristine countryside and sailing waters, high-profile former bankers and chefs are flocking to Tasmania to make the Apple Isle their permanent home, or at least to buy a holiday bolthole.
And there’s no doubt the island state will continue to attract wealthy retirees over the next decade, according to Greg Farrell, managing director of Federal Group, Tasmania’s largest private sector employer.
“We have more affluence and more people moving to Hobart,” says Farrell, whose family business owns one of the world’s top resorts, Saffire at Coles Bay, as well as the Henry Jones Art Hotel and the newly refurbished Wrest Point Casino, both in Hobart.
Federal Group also operates the MACq 01, Hobart’s iconic waterfront hotel.
In July, Tasmania was again named the country’s best-performing economy in the CommSec State of the States report, a quarterly ranking of economic performance.
According to the report, Tasmania’s “strong job market, relative strength in home loan demand and dwelling starts” ensured the state remained in the number-one spot.
“It’s fair to say the Tasmanian population is not rocketing, but a number of very successful people are moving to Tasmania and that will only continue over the next decade,” Farrell says. “We will certainly see more successful retirees in Tasmania.’’
While key suburbs such as Battery Point, which occupies a historic waterfront precinct just off the Hobart CBD, have seen a 93 per cent jump in median house prices over the past five years – increasing from $1.28m to $2.3m, according to REA Group – Farrell believes that Tasmania’s real estate is still undervalued in comparison with that of other Australian capitals.
“I think Tasmania missed out on the other previous real estate cycle uplifts on the mainland and [prices] remained relatively dormant,” he says. “In some respects, prime real estate is playing a bit of catch-up and is still extremely competitive and great value.”
For houses, apartments and penthouses, Farrell says prices at the residential market’s top end have increased, but are still substantially less than their counterparts interstate.
“And it’s a more enviable lifestyle. There is no doubt that there’s been an increase in the frequency of flights to Tasmania. We are seeing more people being able to move down to Tassie and consult or commute as required. In reality, Covid proved that people can be effective working from home … that opened up further opportunities at the premium end.”
Farrell says Hobart is unique because so much of its high-end residential areas have wonderful views – a drawcard not on offer in many but the most exclusive Sydney and Melbourne suburbs.
“Suburbs such as Battery Point, Sandy Bay and Taroona have commanding views of the Derwent River and back over towards kunanyi/Mount Wellington. You don’t get these views at all in Melbourne.
“And there are relatively short commutes wherever you go between Hobart and Launceston; you can have a country and city property and they can be only an hour from each other.”
Farrell’s hotels and resorts are popular with both Tasmanians and interstate visitors.
Features such as the 100-year old art hanging in the Henry Jones Art Hotel charm local diners, while the casino at Wrest Point has long been a drawcard for mainlanders and locals.
“Our different properties appeal to different people throughout their own journey. We tried to create them so each business complements the others,” Farrell says.
Veteran agent Pam Corkhill, of Harrison Agents, says the fact that Hobart is only a one-hour flight from Melbourne, and is serviced by direct flights from both Sydney and Brisbane, makes it ideal for those people who want to escape the crowds, humidity and heat of summer on the mainland.
“With its uncrowded, pristine coastline and pure, clean air, Tasmania is a very attractive proposition,” says Corkhill, who notes that despite interest rates rising over the past 12 months, the Tasmanian holiday home market remains active.
Indeed, acclaimed chef Peter Gilmore – of Quay restaurant in The Rocks at Sydney – last year bought a holiday house in the semirural area of Flowerpot south of Hobart and will grow vegetables there. The property was originally listed with an asking price of more than $985,000.
Also last year, Michael Maxwell, a keen yachtsman and real estate boss of the collapsed firm Babcock & Brown, paid $7.5 million for a property at Beaupre Point.
The 12.35ha peninsula is positioned where the Huon River Estuary and Port Cygnet meet near the D’Entrecasteaux Channel.
Corkhill says the number of holiday home listings along the mid-east coast through to the Tasman Peninsula is keeping agents busy.
The houses range from older “shacks” – often on sizeable blocks of land that are selling for less than $400,000 – to $1m-plus holiday homes in select areas such as Coles Bay on the Freycinet Peninsula and scenic areas of the Tasman Peninsula.
High interest rates have forced some properties onto the market, while cashed-up buyers are also making the most of prices that are slightly lower than they were in 2022.
Since the Covid restrictions were imposed there has been a distinct trend to downsizing in the city and purchase of a holiday home, usually at the seaside, but also in rural settings.
Local and interstate investors are also cashing in on Tasmania’s tourism industry, buying holiday homes as an investment to rent on a short-term basis, especially along the east coast, where a good three- to four-bedroom house with two bathrooms can be bought for $650,000 to $900,000, depending on the location.
Corkhill says the east coast townships of Bicheno, Swansea and Orford, and White Beach on the Tasman Peninsula, are the most popular areas for this type of investment.
REA data shows houses in Bicheno have risen from a median of $370,000 in 2018 to $683,000 in 2023, while Swansea houses jumped from $300,000 five years ago to $675,000 this year.
Entrepreneur Clem Newton-Brown has just listed one of Tasmania’s few freehold islands, Picnic Island just off Saffire Resort at Coles Bay.
With five-bedrooms, a jetty and two boats, Picnic Island is popular with holiday-makers and is on the market through Sotheby’s International and Knight Frank.
“Owning an island comes with many challenges but all the hard work has been done on Picnic Island,” points out Newton-Brown. “We are fully set up with everything you need for off-grid living.” He declines to give a price guide for the island he has owned for nearly 20 years.
Meanwhile, Corkhill says both interstate and local buyers have also been active in the $1m to $3.5m bracket, purchasing architecturally designed houses with stunning views as a retreat from busy city lifestyles.
Harrison Agents Harry Briant recently listed the two-level Anstey Barton, a six-bedroom, five-bathroom sandstone waterfront mansion at Kettering, a coastal town on the D’Entrecasteaux Channel, 37km south of Hobart near the Bruny Island Ferry port.
Built in 1824, it was originally located about 5km west of Oatlands in central Tasmania, but the had been abandoned. Its current owners bought it in 1987 and transported it to Kettering, stacked on 200 pallets for a journey that took seven days. The property features a large fish pond and gardens stretching to D’Entrecasteaux Channel.
Georgie Rayner is marketing 24 Manning Drive, Orford, as well as Villa Talia at Cygnet – a town in the Huon Valley, 55km southwest of Hobart – for which he is seeking offers of more than $3.5m.
In Hobart, they are looking for offers above $1.45m for a three-bedroom apartment in Patrick St. Near Launceston, Harrison agent Luke French has just listed a fully restored colonial-era four-bedder fronting 26 Main Rd, Perth, with a price tag of around $1.5m.
McGrath principal Josh Hart says there is a strong appetite from mainlanders for the Launceston area, and these days it is not just retirees who are looking.
“Families are also wanting to purchase properties in these areas as they return to live in Tasmania, buoyed by its strong economy. The appetite is strong but there is a lack of stock,” says Hart, although he admits the investor market has come off the boil because of interest rates.
“We are really noticing the mainlanders wanting to call Launceston home because of affordability, easy access to services, lifestyle, beaches, national parks, and it’s attractive to younger families since Covid.
“We are finding the ones relocating are in corporate roles in Tasmania. We need more doctors and highly skilled roles in building.”
Hart says that buyers with about $1m to spend can secure four-bedroom, two-bathroom houses with a double garage, in locations about 10 to 15 minutes from Launceston on land parcels ranging from 2000-5000sq m. For $2m they will also get a pool, rumpus room and tennis court, Hart says.
He is presently marketing a property at 161 Back Creek Rd, Pipers River, with a price guide of $3m to $3.5m.
“A lot of younger families are coming down here to get into viticulture,” Hart says.
Mansion is out on Friday, September 29 in The Australian.
Bensons collapse adds to construction sector gloom
High-rise apartment developer Bensons Property Group is the latest victim of the nationwide crisis dogging the construction sector, entering voluntary administration on Friday.
Scandals, takeovers, Swiftenomics: 2024 was a year to remember
The good, the bad and the ugly – 2024 was an eventful year for investors. We look back on the stories which made headlines and broke hearts.