The surprising Aussie capital where house prices are booming

Category
Property

Australia’s property bubble has burst and prices are plunging across the country — but amid the chaos, a surprising city is booming … and it could climate change be part of it? Alex Brooks reports.

 

Tasmania’s house prices are the strongest in the country, with affordability and anxiety about climate change prompting people to pack up and move to the island state, says Foreseechange forecaster Charlie Nelson.

As house prices tumbled by an average 7.99% across Sydney, Melbourne, Brisbane, Adelaide and Perth by the end of February 2019, houses in Hobart had the strongest growth, up 7.17%, according to CoreLogic RP Data.

Propertyology managing director Simon Pressley says Tasmania’s growing reputation as a clean, green tourism hotspot with good food and wine made it attractive.

Tasmania has been a very healthy property market for the last 12 months – there isn’t a location anywhere in Australia that’s performed better than Hobart in the last three and a bit years,” he says.

“There has been a significant number of 25-29 year olds moving out of cities. They are particularly leaving Sydney – there has been a real shift,” University of Tasmania demographer Dr Lisa Denny says.

Statistician Charlie Nelson – who counts the Reserve Bank and media agencies among his clients – says there is a statistically significant relationship between the rise in Australian temperatures, expectations of future global warming and people moving to Tasmania.

“Climate change has the potential to influence residential property values,” says Mr Nelson, who was among the first to predict that Australia would dodge the harsh impact of the 2007 Global Financial Crisis as well as the 2018 retail spending slowdown.

“For each one degree celsius rise in recent temperatures, net migration to Tasmania increases by 2,900 per year.”

Dr Lisa Denny says she has anecdotal evidence that hotter and more unpredictable weather is prompting people to move to Tasmania, a reversal of the traditional Australian trend of migrating north to tropical Queensland.

“At first glance, Charlie’s numbers appear to show a statistical relationship and it’s worthy of further research,” the University of Tasmania research fellow at the Institute for the Study of Social Change says.

CoreLogic head of research Tim Lawless says climate change is a growing concern for homebuyers, but is not yet widespread.

“The majority of people are willing to put climate change concerns at the back of their mind and choose lifestyle factors over global warming,” he says.

Climate correlation chart

Beautiful Isle Wines winemaker David Feldheim moved from South Australia to Tasmania’s Tamar Valley after being hot and bothered by Adelaide’s heatwaves. 

“The heat was definitely a factor in moving to Tassie – there were weeks of being over the old century (100 degrees Fahrenheit) in Adelaide and it was horrible. Some days the grapes would come in like raisins,” he says.

Wine Tasmania CEO Sheralee Davies says there are many different stories behind people moving to Tasmania but “many talk about the change in climate being a key reason”. 

Naturopath and writer Sarah Coleman and her landscaper husband Michael Wigg moved from Mudgee in NSW with their two children aged 12 and 4 – and the NSW heat was one of the driving factors behind the move.

 “With increasing dry periods you really needed more land to farm for the same yields. The rainfall was getting lower and more sporadic,” Ms Coleman says.

The family now have close to the same number of animals on their mortgage-free six acre lifestyle farm in Tasmania as they had on 40 acres in Mudgee.

There were so many reasons for moving to Tasmania – lots of wilderness to explore, more culture, different schooling. It was the perfect mix for us – a rural life, close to Hobart, surrounded by wilderness,” Ms Coleman says.

Our belief in global warming is increasing

It’s no secret that housing in Sydney and Melbourne is unaffordable despite recent price slumps, with Core Logic calculating it took 12.1 years of household income to save a 20% house deposit in Sydney, compared to 8.1 years in Hobart.

Nelson says his Wisdom of the Masses survey has been measuring belief in climate change since 2005, and it’s now higher than the lows of 2010 and 2011 thanks to drought and a hot 2018-19 summer.  

“I think this is the canary in the coal mine and people could also be shifting to higher ground with cooler areas,” Mr Nelson says.

The Demographic Group managing director Bernard Salt says people will continue to move to regional lifestyle spots that offer job security, and Tasmania is “fashionable”.

University of South Australia Business School Dean of Research and Innovation Andrew Beer says people will continue to move to Tasmania for climate change and lifestyle reasons.

“Every time there’s a drought, people really begin to focus on the issue of climate change again,” he says.

“It (Tasmania) is a safe haven for Australia, with lots of wonderful untouched places and affordable housing.”

Foreseechange modelling of temperature increases and people’s belief in clear signs of global warming in the year ahead correlates with interstate migration to Tasmania.

All of Australia is warming up

Climate change is forecast to bring hotter and longer heatwaves, rising sea levels and more destructive storms and bushfires.

CSIRO Climate Science Centre research scientist Michael Grofe says Tasmania remains cooler than other parts of Australia, but the island is warming and expected to face bushfires and coastal sea level rises.

He says human-induced climate change means “everywhere in Australia will face challenges in the climate” and that people will weigh up what matters to them and make property decisions accordingly.

Coastal areas facing sea level rises are likely to face flooding during storms, reduced access to affordable insurance cover, erosion of public and private land, and more expense to repair and maintain property.

Anticipated sea level rises by 2100 depend on whether global carbon emissions continue to be low, medium or high and Grofe suggests people check the CoastAdapt website to look at maps of predicted sea level increases.

“Rainfall is harder to predict, but we know that southern and south-western Australia will get drier,” he says.

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temperatures across australia