The Real Estate Institute of Tasmania says Tasmania remains well placed to deal with a correction in property prices.
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It follows speculation by a leading economics research firm, which predicted house prices will fall by about 10 per cent over 2019 and 2020.
Released on Monday, the Capital Economics paper argues the nation will not suffer a mortgage crisis similar to the US.
It notes that lending standards in Australia are stricter.
REIT chief executive officer Mark Berry said if there was a correction, Tasmania would not be affected as harshly.
“Tasmania is the cheapest state in the nation to purchase property.
“People purchasing property here should feel confident that they are buying in a very good market,” he said.
Mr Berry said he wasn’t sure whether a correction would increase house prices in Tasmania.
However, he noted that if property prices in Sydney and Melbourne continue to grow, investors would likely look to Tasmania and Launceston as a viable alternative.
According to the REIT, Launceston median house prices increased 2.5 per cent in 2015 to $279,167.
Tasmania’s median house price is $311,925.
This compares to median house price of $995,804 in Sydney, and $713,000 in Melbourne respectively.
“Tasmania doesn't see the highs and lows such as the volatile Melbourne, Sydney, or Brisbane markets,” Mr Berry said.
“I think the concern from a Tasmanian perspective are areas such as Melbourne, Sydney and south-east Queensland have seen incredible growth and almost doubled in value, certainly Tasmania haven't seen that growth,” he said.
Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey said a housing bubble in the metropolitan cities could cause an increase in Tasmanian housing prices.
"We need to be expecting that [a housing bubble] and understand the impact it will have on us a nation.”