Launceston Property Market in 2020: What You Need to Know
Launceston’s property market is changing. Here’s what you need to know about how and why:
1. Launceston is fast becoming a commuter suburb for Sydney and Melbourne
One of the key trends we’re seeing in Launceston and Northern Tasmania right now is an influx of buyers from the big cities in the Eastern States. In fact, up to 30% of buyers in the market at the moment are from metropolitan Sydney and another 17% from Melbourne.
Mainland buyers have always been a big part of the property market here but increasingly the buyers we’re seeing aren’t retirees or people looking for semi-retirement. They’re skilled workers in the prime of their careers looking for better work/life balance.
Many of these buyers have employers in Melbourne or Sydney and choose to fly-in/fly-out, working three or four days a week in the city and basing themselves here for the rest of the time. Others are self-employed professionals in sectors that are becoming geography-independent, such as consulting or media.
Two factors are making this trend possible. The first is the increased capacity and upgrades at Launceston airport. There are now 13 direct flights to Melbourne and three direct flights to Sydney each day. The 45 minutes it takes to get to Tullamarine is less than many people spend in Melbourne traffic each morning.
The second is the quality of internet connections here in Launceston. In 2017, we became Australia’s first ‘gigabit city’ with NBN speeds that can run 100 times faster than the national average. That makes working remotely a no-brainer, no matter what line of work you’re in, with apps such as Skype and Google Hangouts making it easy to grab face-to-face time.
2. Lifestyle is driving the market
As you might have gathered, it’s lifestyle that is leading these buyers to Launceston. Where else in Australia can you get a rural or semi-rural lifestyle, as well as affordable housing, all within a short commute to a major regional centre with world-class education and health facilities?
The lifestyle aspects of Launceston are also encouraging two other market segments to list their current properties and buy. The first is retirees or semi-retirees, who are often looking for flat, low-maintenance living close to town. The second is young families who work in or around Launceston and are cashing in on the current market to upgrade to a property with more space in which to bring up the children. These buyers are often prepared to look further afield – say, up to 30 minutes from the centre of town – to get their dream home.
3. First home buyers are spending more
The relative affordability of the Launceston property market means first home buyers are always a factor. But what we’re noticing now is that record low interest rates and changes to lending requirements have combined with first home owner concessions to make this one of the best times in a while for first home buyers to get onto the property ladder.
As a result, we’ve been seeing first home buyers increase their budgets by as much as 20%-30%. Twelve months ago we’d see people buying their first homes sitting in sub-$300,000 market, they’re now often prepared to pay $350,000-$400,000 to get their foot on the property ladder.
This is encouraging more competition in this part of the market, where first home buyers are coming up against investors – people looking for a better return on their money than they could get from cash.
4. Infrastructure spending is having an effect
The Commonwealth Government’s 10-Year Launceston City Deal is bringing new investment and infrastructure to our city. While we’ve already seen the effect this Commonwealth money has had in revitalising the Brisbane Street Mall and City Square, we believe the biggest impact on the Launceston property market will come from the development of the University of Tasmania’s Inveresk campus.
The Inveresk campus will create a swathe of new jobs – not just in education but also in construction, administration, services and more. It will also bring a number of university students into the town, all needing somewhere to live – great news for both property investors and for property prices close to the campus.
5. Stock is low (and it won’t get any better)
While demand in many buyer segments is increasing, supply is actually falling. Generally, you’d expect to see around 1,400 to 1,500 properties on sale in our region at any one time. For the past three months, that has been closer to 1,000 and has dipped as low as just 950.
If this continues it too will put pressure on property prices, as buyers have less to choose from.
We believe these five factors will influence the property market for the next 12-to-24 months. That means, barring a sharp economic contraction, we’ll see a general mood of confidence pervade and property prices rise.
Learn why more Launceston buyers and sellers work with The Josh Hart Team…
If you’re looking to buy or sell in Launceston or Northern Tasmania contact my team today.