Tasmania Outlook Rental Market The rental market is expected to weaken, with vacancy rates tightening and trending downwards, while weekly rents will trend upwards or flatten. This is despite Hobart recently posting the second highest residential property rental market growth at 4.5 per cent. The survey showed 75 per cent of Tasmanian respondents believed vacancy rates would trend downwards, mostly by up to 1 per cent (25 per cent said they would flatten out), and respondents were evenly split between expecting weekly rentals to trend upwards by up to 5 per cent and expecting weekly rentals would flatten out. Movements in vacancy rates are subject to interest rates. Unless there are significant changes to interest rates in the near future, vacancy rates should remain fairly steady. Continued low vacancy rates will keep pressure on weekly rents.
Growth Investor activity is expected to increase by mainly between 1 and 5 per cent, although some areas predict increases of between 5 and 10 per cent, driven by stable interest rates, low vacancy rates and growing consumer confidence. Investors and upgraders are expected to represent the strongest growth in activity due mainly to increased second buyer activity, better rental yields and easing of bank lending criteria. Growth in the upgrader market is a result of people upsizing and getting out of their first home. The first home buyer market has stalled completely, even in the light of investors selling to free up capital, and the movements in the upgrader market. According to the survey, 50 per cent of Tasmanian respondents thought the strongest growth in activity would come from investors, 25 per cent thought it would come from upgraders and 25 per cent from retirees.
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