Kempton TAS Property Investment

## 1. Investment Verdict We recommend a Hold strategy for Kempton, TAS, with the single most important number justifying this being the Investment Scorecard rating of 55.0/100. This score indicates a neutral outlook, suggesting that while there are some positive factors, there are also limitations that prevent us from recommending a Buy.

## 2. Market Overview The median house price in Kempton, TAS, is $505,921, with a median unit price of $362,282. The market has experienced a 1-year price growth of 5.3% and a 5-year Compound Annual Growth Rate (CAGR) of 3.7%. However, the market cycle is currently cooling, which may signal a slower growth period ahead. For buyers, this could be an opportunity to negotiate better prices, while sellers may need to adjust their expectations. The rental demand is high, with a gross rental yield of 2.8% and a median weekly rent of $270.

## 3. Rental Market The vacancy rate in Kempton, TAS, is 2.2%, indicating a relatively tight rental market. The median weekly rent is $270, and the gross rental yield is 2.8%. With a high rental demand and a moderate owner-occupier rate of 65%, investors may find opportunities in the rental market. However, the yield is relatively low compared to some comparable suburbs, such as Kings Meadows (TAS) with a 4.9% yield.

## 4. Short-Term Rental Opportunity The median nightly rate for short-term rentals in Kempton, TAS, is $466, with an occupancy rate of 35%. This translates to an estimated annual revenue of $60,690 (assuming 365 nights per year and 35% occupancy). Compared to the long-term rental market, the short-term rental opportunity may be more lucrative, but it also comes with higher management costs and more variable income. Investors should carefully consider their strategy and target market before deciding between long-term and short-term rentals.

## 5. Infrastructure & Growth Drivers Kempton, TAS, lacks major projects on file, which may limit its growth potential. The nearest transport hub, New Norfolk station, is 53.1km away, which could make commuting challenging for residents. The suburb's distance from the CBD may also limit long-term capital growth potential, as stated in the Investment Scorecard. However, the moderate supply pipeline and strong population growth could attract new development approvals, potentially driving growth in the area.

## 6. Bull Case If conditions hold or improve, the upside scenario for Kempton, TAS, is promising. With a 3-year growth forecast of 13.5%, investors could see significant capital appreciation. Additionally, if the rental yield increases or the vacancy rate decreases, investors could enjoy higher returns. For example, if the gross rental yield were to increase to 4%, similar to some comparable suburbs, investors could see a significant boost in their rental income.

## 7. Risks There are several specific risks associated with investing in Kempton, TAS. The distance from the CBD may limit long-term capital growth potential, as mentioned earlier. The unemployment rate of 6.8% is relatively high, which could impact rental demand and vacancy rates. The moderate supply pipeline also poses a risk, as an increase in new developments could lead to oversupply and decreased property values. Furthermore, the suburb's reliance on a single employer or industry could exacerbate these risks. Investors should carefully consider these factors and diversify their portfolio to mitigate potential losses.

## 8. The Play For investors looking to enter the Kempton, TAS, market, we recommend an entry range of $450,000 to $550,000 for houses and $300,000 to $400,000 for units. Investors should target a minimum yield of 3% to ensure reasonable returns. Watch signals include changes in the rental market, new development approvals, and shifts in the local employment base. Our recommended strategy is to hold existing properties and monitor market conditions before making new investments. Investors should prioritize due diligence and consider seeking professional advice before making any investment decisions.

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.