Motoring group RACT driving Tasmanian tourism boost as mortgage arrears linger

Tasmania recorded the nation's highest level of mortgage arrears for a second consecutive quarter, according to the latest report by Standard & Poor's Ratings Services.

Six of the 10 worst-performing postcodes were in New South Wales, the standard mix of coastal areas and suburbs on the outskirts of Sydney.

Overall Australia's level of arrears for subprime loans in the June quarter was the lowest in 13 years, but loans greater than 30 days in arrears totalled 1.68% in Tasmania.

Next was New South Wales, at 1.48%, and Queensland, at 1.40%, according to the report, RMBS Performance Watch: Australia which compiles data from residential mortgage-backed securities which are a means for lenders to raise funds by selling bundles of loans to investors. It involves a high proportion of non-bank originators and financial institutions and subprime and low-doc lenders.

But there's also now the latest RP Data analysis that details the weakness of the Tasmanian property market saying Hobart has experienced the weakest performing market over the past year of all capital cities with home values falling by 0.7%. The median house sale sits at $325,000 and units at $236,000.

"The Hobart market weakness has been consistent over recent years with it also the weakest market over the past five years," RP Data's Tim Lawless noted.

"Unfortunately most other indicators remain weaker now than they were a year ago," he added.

Hobart Property Values

  • ? 6.0% quarter

  • ? 0.7% year

  • ? 1.8%  per annum over last five years

  • ? 2.9% per annum over past 10 years

  • ? 7.3% per annum over past 15 years

  • ? 15.2% from peak

I've recently written on Tasmania's high overseas student numbers, but tourism activity on the island is expected to drive the brightest prospects for Tasmania's economic growth.

Earlier this month the Tasmanian motoring group RACT added the 60-room Freycinet Lodge, 60-room Cradle Mountain Chateau, and Strahan Village to its property portfolio.

It already includes the Grand Mercure Hobart Central Apartments, which it bought in partnership with the RACV for $25 million in June.

The motoring group will also take ownership of Gordon River Cruises.

The Farrell family’s Federal Group will maintain a small investment in the tourism assets with the deal done through Knight Frank Tasmania managing director Scott Newton. 

 The four assets are currently profitable but were operating at below preferred occupancy levels.

The RACT hopes its member base and seven million mainland affiliate automobile members will be willing tourists.

The deal comes as signs of an improvement emerge in Tasmanian tourism.

For the year ending June 2013, Tourism Tasmania reported that visitor numbers were up 12% to 961,600.

The total nights spent in Tasmanian hotels rose 7% with visitors spending $1.5 billion over the year which was 10% more than in 2012, the Tasmanian Minister for Tourism Scott Bacon said.

Federal still owns Hobart's Wrest Point casino and Launceston's Country Club casino along with the luxury resort Saffire on the state's east coast and the Henry Jones Art Hotel in Hobart.

The sale has likely freed up capital for Federal to develop a luxury hotel at Port Arthur.

The 4.5 Star Freycinet Lodge (pictured below) in coastal bushland on the shores of Great Oyster Bay. It includes 60 one and two-roomed cabins, restaurants and conference facilities. The property is leasehold with 41 years remaining, issued by Parks and Wildlife Service.

freycinet-nov-27-one

Photo courtesy of Freycinet Lodge

The 4 Star Cradle Mountain Chateau includes 60 standard twin rooms, king spa rooms and deluxe split level suites, restaurants, bars and conference facilities.

Strahan Village, located on the bank of Macquarie Harbour on Tasmania's west coast. It features include two main areas of accommodation, four food and beverage areas including Hamers Hotel, View 42 Restaurant & Lounge, Fish Café and Banjo’s Bakery and various tourism activities.

Gordon River Cruises is located on the Gordon River. 

news@propertyobserver.com.au

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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