Buying a home remains a challenge in Hobart. Picture: Supplied
Tasmanian housing affordability has improved “modestly” over the past year, the latest PropTrack report reveals.
The Housing Affordability Index shows a 1 per cent improvement in a typical household’s purchasing ability.
PropTrack senior economist Angus Moore described the state’s affordability level as remaining “very tough”.
He said a median-income household — earning about $85,000 per year — could afford to buy just 8 per cent of the homes sold in Tasmania over the 2025 financial year, without plunging into housing stress.
This was down from 9 per cent in the previous year. And it was the lowest of any state.
“Very few homes across Tassie are actually affordable at that income level,” he said.
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Households with an median income can afford to buy very few Hobart homes.
The report also showed that Tasmania has moved from the second-least affordable state in 2022-23 and 2023-24 to the third-most affordable.
Mr Moore said this improvement had been driven by declining mortgage rates alongside softer home price growth, coupled with Queensland and South Australia becoming less affordable.
As recently as 2018, Tasmania was Australia’s most affordable state for housing.
“Affordability remains challenging in Tasmania and has improved only a little from its record low levels in 2022-23,” he said.
“Tasmania’s affordability challenges are really quite a recent phenomenon relative to the rest of Australia.
“One of the reasons Tassie became as unaffordable as it did was we saw quite a lot of people moving there through the late 2010s and into the pandemic.
“And given it is quite a small market Hobart, you don’t need a lot of extra demand for that to have a material impact.
“Hobart is a lovely city, but it is a small city, so those sorts of things can have an outsized effect relative to much larger cities.”
PropTrack economist Angus Moore.
Unsurprisingly, the ability to purchase property increases for those in higher income brackets.
The highest-earning fifth of households – about $175,000 per year – could afford to buy 70 per cent of the Tasmanian homes sold over the past year. This was the second-highest, behind only Western Australia.
The report also showed that the time needed to save a deposit has eased from its peak in 2022, when it was closing in on seven years.
It now takes five and a half years, which is slightly lower than the national average.
Meanwhile, the Real Estate Institute of Australia’s latest Housing Affordability Report showed the proportion of weekly family income required for Tasmanians to meet loan repayments had reached 41 per cent.
This was an improvement when compared quarterly and year-on-year.
For renters, 26.5 per cent of income was required to pay their rent.
PropTrack Housing Affordability Index 2025, mortgage repayments as a share of income.
PropTrack Housing Affordability Index 2025, Tasmania, years to save a 20 per cent deposit.
REIA president Leanne Pilkington said the improvements signal a much-needed shift after affordability hit record lows late last year.
“It’s encouraging to see housing affordability improving for families,” she said.
In 2026, Mr Moore is expecting to see small market improvements.
“We’re expecting growth around the country at a steady, consistent pace,” he said.
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