A shortage of properties and retreating investors have spelled the end for Tasmania's property boom, according to the Real Estate Institute of Tasmania.

The Real Estate Institute of Tasmania’s March 2019 Quarterly Report reveals sales numbers have decreased for the third consecutive quarter and median prices have retracted for the first time in several years.

According to the report, there were 247 or 8.6% fewer property transactions than in 2018, while at the same time, there was an 18% increase in the number of properties advertised for sale.

At a glance:

• The Real Estate Institute of Tasmania’s March 2019 Quarterly Report reveals sales numbers have decreased for the third consecutive quarter and median prices have retracted for the first time in several years. 
• Over the past year, Greater Hobart’s house sale numbers (500) decreased 16% while its median price dropped 1.7% to $483,750.
• Higher acquisition costs and consumer demand have pushed rents higher.

REIT President Tony Collidge said it all pointed to a “cooling” market.

"It appears that finally, the bang has gone from the boom," he said.

"We are transitioning to a more normal market with much of the heat gone out of it.

"Whilst stock levels are starting to slowly increase there still remains a shortage of properties in most areas."

Buoyant economic conditions, a booming tourism market, growing tertiary student numbers, and its attraction as a lifestyle destination had seen unprecedented property demand and growth in Tasmanian property values throughout the past five years.

The latest report notes that properties in the south and north are now taking significantly longer to sell.

Over the past year, Greater Hobart’s house sale numbers (500) decreased 16% while its median price dropped 1.7% to $483,750.

Sales didn’t drop as steeply in Launceston going down 5.7% while its median house price rose 4.9% to $342,500.

Sales in the North West were up 10.7% with its median price increasing to $275,000, up 8.7%. 

Rental concern

Strong demand for rental accommodation over the past two years has seen vacancy rates at record lows placing upward pressure on rent.

The March 2019 Quarterly Report identifies a softening in vacancy rates across all parts of the state but not at a sufficiently high enough level to alleviate the continued strong demand for rental accommodation across all parts of the state.

Higher acquisition costs and consumer demand have pushed rents higher. 

Mr Collidge said there was a silver lining for first home buyers.

"Of particular concern is the retreat of investors from our market at a time where we need more rental accommodation," he said.

"This has however provided a great opportunity for first home buyers to engage.

"Whilst prices may continue to move downwards, I do not expect a slide of the magnitude that either Melbourne or Sydney have experienced.

"Sellers may need to readjust their expectations while there is a good incentive for buyers to engage." 

By Sean Slatter

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