Tasmania could topple Victoria as Australia's strongest housing market in the coming months, according to the Housing Industry Association.

HIA's State and National Outlook reports, released last week, indicated there was 701 detached house starts in Tasmania during the March quarter of 2019, marking the state’s strongest performance in 25 years.

The figure brings the total number of detached house starts for the year to March 2019 to a level of 30 per cent higher than the previous year.

HIA Executive Director Stuart Collins said the recent softening of the Victorian market could allow Tasmania to take top spot.

“After several years of strong population growth, tightening rental vacancies, and rapid increases in the cost of renting or purchasing a house, housing construction in Tasmania has responded in a big way,” he said.

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Source: HIA

"Tasmania has delivered the nation’s second strongest housing market behind Victoria, on the back of the strongest interstate and overseas migration figures in the nation and the second strongest detached dwelling market behind NSW.

“With the ongoing cooling of Victoria’s property markets, Tasmania may even take out top place in the coming months."

HIA Economist Tom Devitt told WILLIAMS MEDIA that while there were signs of stabilisation in the Tasmania's market, it was unlikely to experience the type of downturn seen in Melbourne or Sydney.

"Tasmania's market might not continue at the pace it has been going, but other national developments such as the reserve bank dropping interest rates and the recent tax cuts will serve to support the state's economy into the future," he said.

"If it does overtake Victoria as the country's number one housing market, it would be quite the badge of honour for the state."

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