The Launceston Real Estate Landscape: Does Your Agent See The Tide Turning?
There is no doubt about it, the past twenty four months have seen fantastic energy and a renewal of confidence in the Launceston economy.
With the capital ventures such as:
- David Walsh’s FOMA Festival relocation
- The JAC Group / Josef Chromy Penny Royal redevelopment
- Errol Stewart’s Silos Project and CH Smith development
- Redevelopment of the Launceston Airport
- Launceston City Council’s City Heart project
- First city in Australia to offer Gigabyte technology through LAUNTEL
- Hotel Verge development
- Relocation of the University of Tasmania to Inveresk
The local economy has needed this boost and the stakeholders who have made the risk of investing into Launceston have allowed the community to continue to innovate, create jobs, host tourists, students, sports, enterprise and the arts.
Capital investment in Launceston, alongside the rise of house prices across the eastern seaboard (in particular in Brisbane, Sydney and Melbourne) have prompted mainland investors and owner/occupiers to look at Launceston for an alternative to re-locate or invest. Our local market is offering residential returns between 4.5%-6% comparing to an average 2.5-4% from our mainland counterparts.
Launceston has always been a marketplace that has consistently shown stability without large jolts of growth or collapse. This is perfect when you compare to recent media reports of a potential bust in the mainland markets after their rapid growth in a short timeframe. However; in saying this – mainland buyers are savvier and highly researched, with access to data and forecasting with the ability to search trends, average medium sale prices, % growth and recent comparable sales.
With the positive points above, there is always a catch. With renewed confidence and activity, demand and supply, there is the risk of arrogance and greed, or being caught up in the moment. This seems to gathering momentum in particular by agents and vendors alike throughout Launceston. Although comparing to mainland markets Launceston may seem “cheap”, this is due to our geographical location, job market, population and investment opportunities – it’s all relative. Now I’m not trying to be a negative Nancy here and of course I’d love to see rapid growth across our city (it would be fantastic for everyone, including my business). However, we must be sensible. It takes time to gather significant sustained growth and it does not happen overnight. Overnight success can often mean rapid failure, as it’s unsustainable for our community in the short term.
If you look at recent volume of listings coming to the market, it has significantly dried up over the last two months, I predict this will be the same for sales during the next quarter. Open homes are showing lower numbers across all price brackets with email enquiries representing the same case. I predict we will see strong results, however multiple offers of properties will be few and far between from what we have been used to over the past eighteen months.
The question I put to you: Does your agent see the wood from the trees?
With such, agents have to be aware of the tide turning and informing the client. In a short time frame there has been a disease in Launceston of agents over pricing due to advertising campaigns stating the market is “HOT”. I’ve seen more often then not in the last few months, properties listed online being significantly reduced in price within a matter of weeks. This trend is due to some local agents not seeing the tide turn from a highly competitive market to the more stable market Launceston is used to.
My advice to anyone looking at entering the market place is ask yourself these questions:
- Is our agent buying our listing, what evidence have they provided?
- What is their experience across multiple market conditions?
- Do they have an understanding of external market that may affect our result?
I welcome your questions or comments below. Due to the sensitive nature of this personal opinion piece, all questions messaged privately will be treated with confidence.