Tasmanians are continuing to buy residential investment properties despite 12 consecutive interest rate rises since 2002 and the boom in real estate prices.
Housing Industry Association figures show spending on the state's residential investment property increased nearly fivefold in the past six years.
HIA Tasmania executive director Stuart Clues said this was a sign of continuing confidence in Tasmania's property market.
"A lot of that drive in the rental market has probably been supported by the low vacancy rates -- under 2.5 per cent at the moment. It's a very tight rental market," he said.
"Landlords have been buying properties in the knowledge that they will not have a lot of difficulty finding or retaining tenants and can attract a good rental return on the properties."
In January 2002, total loans in Tasmania for residential investment properties stood at $13.5 million.
In January this year, 12 successive interest rate rises later, that figure was just more than $47 million.
The investment property lending spree peaked in May last year at $60.2 million.
Mr Clues said the data showed a steady lending increase between the start of 2001 and mid-2003.
The market largely levelled off after that point but the trend started rising again in the middle of last year.
"There has been phenomenal growth in Tasmania's rental market and that is being driven by a national shortage of rental properties," Mr Clues said.
"And this has been acknowledged by the Federal Government through their rental assistance package, trying to encourage another 150,000 rental properties to be built in Australia, and they are trying to encourage the mum-and-dad investors to build those properties."
With mortgage repayments continuing to skyrocket, some investors are finding that their property portfolios provide a good buffer against the rises.
And with rental rates also sky-high, investment properties provide extra sources of income, while properties can be sold off individually for a quick cash injection if needed to ease the debt burden.
While some individual homeowners are struggling with their repayments, lenders in Hobart have found that property owners and buyers are increasingly turning to mortgage brokers instead of the big banks to finance investment portfolios.
"We have noticed that the people who have a fair bit of equity in their own house, and are looking to pick up a good-priced property they might get good rental return on, are still in the market," said Wizard Home Loans Eastern Shore principal David Wedd.
"People buying investment properties tend to be a bit more savvy. They tend to build a buffer in for themselves with regard to repayments and affordability."
