24 Jul 2023 | 5 mins

Tasmania, Once Australia’s Rugged Backwater, Is A ‘Million-Dollar Market’ - Mansion Global

Tasmania, Once Australia’s Rugged Backwater, Is A ‘Million-Dollar Market’ - Mansion Global

Tasmania was once considered the backwater of Australia: the southernmost point of the country, an isolated island reaching toward the Antarctic where the winds are fierce and temperatures routinely plummet to sub-zero degrees Celsius in winter.

Wild, green and mostly deserted (at least compared to Australia’s mainland population metrics) Tasmania has, until recently, been either the butt of national jokes or considered Australia’s largest national park—a place for hiking, fishing, boating and even surfing (despite its freezing waters, Tasmania’s waves are second to none)—but not really culture or living.

Yet, the features which were once considered adverse to urban living—the island’s vast areas of World Heritage wilderness, forest and mountains, and rugged landscape—have, since Covid, become one of the island’s greatest strengths, and wealth is flooding in to drive multimillion-dollar home sales.

Forbes Global Real Estate’s agent Tracey Atkins, who usually deals with mainland Australian properties priced above A$5 million, orchestrated her first Tasmanian sale this year. The property, named Woodlands and situated on the even smaller Bruny Island, spans 248 acres and includes a near-200-year-old Georgian homestead, a vineyard, olive grove and miles of southern Tasman Sea coastline.

“When we were approached to sell Woodlands, we were instantly amazed by the depth and breadth of inquiry that property had drawn,” she said. “It was on the radar for a lot more people than we realized—there is a big appetite for Tasmania.”

The sprawling estate—built in 1829 by explorer and mariner Captain James Kelly, the first white settler on Bruny Island—was eventually sold to Kathmandu founder and former Rich Lister Jan Cameron in April, who set a new state record when she paid about A $6.6 million.

“So many people from the mainland were interested and competed for it — Jan was not the first big and notable name interested,” Atkins said. Since then, she has taken on another luxury property, this time on Tasmania proper in Kettering, a half an hour drive from capital city Hobart.

The “Trial Bay House” (which in 2010 won the Robin Boyd Award for Residential Architecture for its “calmness and serenity”) is an extensively renovated, privately situated, 42-acre property overlooking the D’Entrecasteaux Channel and Bruny Island. Its current asking price is A$9.45 million, a sum which would crush the current record set by Woodlands.

“Tasmania is such a fascinating market: It has a massive future as a place for great property collectors, who will be fighting to add a Tassie property in their portfolio,” Atkins said.

Tasmania’s proximity to Melbourne, Australia’s second-largest city—a 50-minute flight—and a widely more flexible approach to work in the country post Covid approach have also made it easier for people to travel between the mainland and the island.

“For a long time, Tasmania suffered from the tyranny of distance. If you moved to Tasmania, it was as though you were cutting yourself off from the mainland,” Atkins added. “Now you can fly back and forth easily for work, do your job remotely.”

Tasmania’s pristine nature, cooler temperatures (relative to the rest of the country) and a small population have also become attractive to people worried about the impacts of climate change on mainland Australia.

Real estate agent Pam Corkhill, of Harrison Agents, has lived in Tasmania all her life and believes the island’s clean air and expanding local produce and wine industries have contributed to its rise in popularity.

“There have been some massive sales in Tasmania, a lot of which are those beautiful, old, rural homesteads,”Corkhill said. Closer to the city (Hobart, Tasmania’s capital city, is also home to most of its cultural institutions), Battery Point and Sandy Bay, two of Hobart’s most prestigious locations, are always in demand, with prestige homes going for a median of A$1.49 million and A$1.25 million, respectively, according to CoreLogic data from April.

“Their history and their proximity to [the Central Business District] itself and to the wharf area, restaurants, the Salamanca market, museum, galleries and the Tasmanian Symphony Orchestra make living in the center of Hobart very appealing,” Corkill added.

While the lifestyle close to the water and downtown is not dissimilar to Sydney, buyers can get a much better deal in Hobart.

CoreLogic data shows that the median sale value of Hobart’s most expensive suburb, Battery Point, was A$1.49 million.

The ‘high end’ of the Hobart dwelling market, the top 10% of the market, is currently at A$1.009 million, said Eliza Owen, CoreLogic’s head of Australian research.

“This has more than doubled from A$490,000 a decade ago,” she said. “As of April this year, the high end of the Sydney housing market was starting at around A$2.4 million, across Sydney, so high-end values in the city have actually departed more from the high-end of Hobart over time.”

The significant price difference is less dramatic between Tasmania and Melbourne, where the prestige market begins at A$1.5 million. That’s largely because of higher levels of apartment development across greater Melbourne through the 2010s, which has kept housing across the city slightly more affordable, Owen continued.

It wasn’t until after the pandemic that prime Tasmanian dwelling values shifted into the ‘million-dollar market’ space, as home values grew 44% between March 2020 and May 2022, she added. “Since the peak in May, Tasmanian dwelling values have seen a decline and million-dollar sales have subsided, but remain elevated at 9.2% of total dwelling sales in January of 2023,” she said.

For Corkhill, this sounds about right. “The dial has shifted, and people are seeing Tasmania for what it is: a place of quality produce and a burgeoning fine-dining scene with restaurants such as Peppina in Salamanca Place, Me Wah in Sandy Bay as well as amazing resorts Saffire Freycinet,” she said.

The cooler temperatures, especially in summer, is also a major draw.

“We’ll get a hot day every now and again but it will soon be cool. Often it’s no colder here than in Melbourne—but in summer, it’s much more measured,” she added.