Reventon sees Tasmania as top property investment play

Reventon has identified Tasmania as a key focus for property investment, with tighter rental supply and rising prices bringing the state back into view for investors.

The shift follows strong gains in markets the group had previously targeted across Perth, Adelaide and South East Queensland. Founder and Chief Executive Officer Chris Christofi said Tasmania is now at a different stage in the property cycle than several mainland markets that have already recorded substantial growth.

"Tasmania is one of the markets we're most interested in right now," Christofi said.

"We've had strong results in Perth, Adelaide and South East Queensland, but those markets have moved considerably. We're now looking at where the opportunity sits from this point forward, and Tasmania is standing out."

Recent housing data points to stronger momentum in the state. Hobart's median home price reached $735,000 in May after annual growth of about 10 per cent, while regional Tasmania's median home price rose to a record $581,000, up 12.9 per cent over the year.

The rental market has tightened further. Hobart's vacancy rate fell to 0.6 per cent in July, with 162 properties available for rent across the city, according to SQM Research figures cited by Reventon. Combined asking rents in Hobart rose by almost 12 per cent over the past year, with houses at about $638 a week and units at about $569 a week.

A second factor in the group's assessment is relative affordability. Hobart's median home price remains below the national median and below prices in several mainland capitals, where median values have moved beyond $1 million. Regional Tasmania offers a lower entry point again at about $581,000.

Christofi said investors were increasingly weighing current prices against the remaining scope for growth after several years of broad gains across Australian housing markets.

"The numbers are starting to tell a very interesting story," Christofi said.

"You've got property prices moving again, extremely limited rental availability and strong rental growth.

"For investors looking at both capital growth and rental demand, we think Tasmania deserves serious attention."

Cycle shift

Reventon evaluates markets by looking at affordability, population and migration trends, employment, infrastructure investment, housing supply, rental demand and wider economic activity. Christofi said the amount of growth already recorded in a market was one of the most important measures in deciding where to look next.

That has led the firm to reassess places that have already produced strong returns. Perth, Adelaide and parts of South East Queensland have all posted significant price growth in recent years, and the group's focus is now shifting to Tasmania as it searches for locations where prices and demand may still have room to rise.

"Property markets don't all move at the same time," Christofi said.

"Perth, Adelaide and South East Queensland have delivered very strong growth. We're now asking where the value and the fundamentals are pointing from here.

"Tasmania is increasingly answering that question."

Supply pressure

Tight housing supply is central to the firm's investment view. Hobart's vacancy rate of 0.6 per cent places it among the most constrained rental markets in the country, reflecting a mismatch between available homes and tenant demand.

Low vacancy rates can support rental growth and indicate limited slack in the local housing market. In Hobart, just 162 rental properties were available across the city, a narrow pool for a capital city that is adding pressure to asking rents.

"Only 162 properties being available for rent across a capital city tells you immediately that supply is tight," Christofi said.

"When housing is difficult to find and rents are rising at the same time, that's a market we want to understand very closely."

Local focus

The group is not treating Tasmania as a single market. It is assessing opportunities by location, examining employment conditions, rental demand, housing supply, affordability, infrastructure and population movements to determine which areas show the strongest fundamentals.

Reventon said it has advised more than 12,000 clients and facilitated more than $3.7 billion in property transactions. That scale adds weight to its latest shift in focus as investors and advisers search for markets that may be earlier in the cycle than parts of the mainland.

Christofi said the firm's analysis centred on where future demand was likely to emerge and what buyers and tenants were already paying in each area.

"We're looking at what people are paying to get into the market, what tenants are paying, how much housing is available and where the next phase of demand is likely to come from," Christofi said. "On those measures, Tasmania is a market we believe has a very interesting period ahead."