As we enter a new year, it is easy to reflect on the past while looking to the future. That look to the future is often accompanied by a raft of projections across a range of topics. Property is very well served on the fortune-telling front, and a quick look online will return no end of future projections for 2025.
Whilst there are a number of factors that impact property prices and the supply and demand for property which inexorably feeds into determining those prices, these differ from place to place. There are macro factors that impact property from a geographic and national viewpoint, but there are also micro factors. Factors that impact property within Greater Launceston, for example, do not have the same impact, or do not exist at all in other markets. It is important to understand the macro factors but also important to have a good understanding of the micro factors as well. This is relevant across both the commercial and residential markets, and it is where being local and having an astute knowledge of our markets is so vital.
Projections are what they are “a calculation or guess about the future based on information that you have” (Cambridge Dictionary). They are of use when they are accurate and they can assist in formulating a decision, however, if they are not accurate, they are of little use at all or in some instances, damaging.
A key aspect is understanding the market you are in and what its drivers are, what the factors impacting the market at any one time are and how a property transacting in that market can do so with reference to these various factors in such a way that the best available return is secured. We believe that one way is to have a sound understanding of the local market and what comprises it, not to say that understanding the macro factors is also not important but it is vital not to underestimate local market factors and their impact on property. After all, property is a very local asset. The vast majority of property in Greater Launceston will be impacted by factors specifically relevant to Greater Launceston and Tasmanian economic conditions and the factors impacting them, just as Tasmanian residents make up the majority of Tasmanian property purchasers.
A recent article in The Australian by Chris Herde titled “CEOs tip recovery for commercial property” published online 13th January covers a number of macro factors that CEOs see potentially impacting the commercial property market, most are positive and most will impact commercial property across Australia I suspect, some are state by state factors. From a more local perspective, we are cautiously optimistic, experience in our commercial market over the past few months has seen a desire from landlords and tenants, vendors and purchasers to transact which is very pleasing.
Limited supply of industrial property remains a constraining factor, as does the availability of property (across various classes) to satisfy specific requirements such as meeting a particular use class or providing benefit such as on-site car parking, a heavier burden within a community where motor vehicle transport remains strong. Tenanted investment property continues to change hands, this is particularly pleasing where much of the commentary at a macro level relates to expected improvement triggered by lower interest rates (when they materialise). An interest rate reduction will also impact our market in a positive way but to see tenanted investment property continue to change hands locally despite this is very encouraging.
Local knowledge is not to be underestimated. Tasmania and the Greater Launceston area are great places to live and to work. It is easy to be proud of being a local business, sometimes it is easy to forget just how much value that can add.
To all local residents and businesses in Tasmania and Greater Launceston, here’s to a great 2025.
If you would like to discuss the property market in more detail, please do not hesitate to contact us.
Please note the above information contained within this blog reflects my personal observations only, the information is not intended as financial advice and should not be relied upon as such.