Molesworth TAS Property Investment

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## 2. Market Overview - Median house price: $750,251 - Median unit price: $379,028 - 1‑year price growth: 9.5 % - 5‑year CAGR: 4.9 % per annum - 3‑year growth forecast: 13.5 % (forecast)

*Signal:* Price growth is solid (nearly 10 % in the last 12 months) and the 3‑year forecast remains upbeat. Sellers can command premium prices, while buyers must absorb higher entry costs. Days on market is not supplied, so we cannot comment on market speed or bargaining power.

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## 3. Rental Market - Median weekly rent: $270 / wk - Gross rental yield: 1.9 % - Vacancy rate: *Data not provided* - Demand rating: *Data not provided*

*Interpretation:* The low yield indicates that rental cash‑flow alone will struggle to cover financing costs, especially if interest rates rise. Investors will need to rely on capital growth to achieve an acceptable total return.

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## 4. Short‑Term Rental Opportunity - STR nightly rate: *Data not provided* - STR occupancy: *Data not provided* - Estimated annual STR revenue: *Data not provided*

*Conclusion:* With no STR metrics available, we cannot quantify the short‑term rental upside. Until reliable STR data emerges, the long‑term rental (LTR) model remains the default strategy.

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## 5. Infrastructure & Growth Drivers - Known projects, transport upgrades, major employers: *Data not provided*

*Implication:* Without concrete information on infrastructure or employment anchors, we cannot identify specific demand catalysts or constraints for Molesworth. Investors should monitor local council releases and Tasmanian government announcements for future developments.

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## 6. Bull Case If the 13.5 % three‑year growth forecast materialises, the median house price could climb to roughly $851,500 (‑$750,251 × 1.135). Coupled with a modest rise in rent (e.g., to $285 / wk), the gross yield would improve to about 2.2 %, narrowing the cash‑flow gap. In this scenario, total returns (capital growth + rental income) could exceed 15 % over three years.

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## 7. Risks | Risk | Quantified Concern | |------|--------------------| | Low rental yield | Current yield of 1.9 % may not cover loan servicing if rates rise above 5 % p.a. | | Vacancy uncertainty | Vacancy rate is unknown; a rise to 5 % would cut net yield further. | | Reliance on price growth | 9.5 % annual growth is recent; a slowdown to <3 % would erode total return. | | Supply pipeline | No data on new housing approvals; a surge in supply could pressure prices and rents. | | Interest‑rate sensitivity | With a low yield, a 1 % increase in borrowing cost reduces net cash flow by roughly $1,200 / yr per $250,000 loan. |

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## 8. The Play - Entry range: Target purchases around the median house price of $750,251 (±5 % to capture slight discounts). - Minimum yield target: Aim for ≥ 2.0 % gross yield (requires either a lower purchase price or higher rent). - Watch signals: 1. Publication of days‑on‑market data – a rapid turnover would favour sellers. 2. Vacancy statistics from the Tasmanian Rental Market Report – rising vacancies would heighten cash‑flow risk. 3. Infrastructure announcements (e.g., road upgrades, new schools) that could lift demand. 4. Interest‑rate movements – a tightening cycle would pressure yields further.

Recommended strategy: Acquire a property at or below the median price, focus on units (median $379,028) where the price‑to‑rent ratio is tighter, and hold for 3‑5 years to capture the forecasted capital growth. Re‑evaluate annually against vacancy data and any emerging STR opportunities.