After a steady rise from the depths of the post-pandemic downturn, Hobart home values have reached a record high as buyers battle over affordable properties.
Hobart’s median home price has increased by about 10% in the past year, taking the price of a typical home to $735,000.
Strong growth this year, particularly at the affordable end of the market, has pushed values to new highs, surpassing the previous peak reached in February 2022.
Hobart’s rebound has come after prices bottomed out during 2023 and stagnated until early 2025, when rate cuts triggered price rises around the country.
But despite values hitting a new high, prices have only risen 19% in the past five years – slower growth than all the other capitals except Melbourne and Canberra, given the city was in a downturn for much of that time.
Relatively affordable suburbs such as Austins Ferry in Hobart's north have outperformed the market. Picture: realestate.com.au/sold
While Hobart’s price growth in the past year hasn’t been quite as strong as the top performing capitals of Perth, Brisbane, Adelaide and Darwin, values have grown considerably faster than in Sydney, Melbourne and Canberra.
The city’s quiet turnaround has put the Tasmanian capital back on the radar of property investors, who have been eagerly snapping up the city’s affordable and high-yielding homes.
How home values changed around Australia in May
Those investors have been competing over affordable homes with first-home buyers, many of whom are taking advantage of stamp duty exemptions, said REA Group economist Luc Redman.
“In the Hobart market there’s a combination of first-home buyers from the expansion of the 5% deposit scheme that’s driven a fair amount of price growth, and quite a high number of new investors,” he said.
“That combination, and the lower entry point of Hobart prices, has meant there’s been a lot more bidding up of home prices over the past 12 to 18 months.”
First-home buyers and investors battle for affordable homes
Mr Redman said Hobart’s high rents relative to purchase prices and low vacancy rates meant Hobart remained attractive to investors even amid the property tax changes announced in the federal budget to abolish negative gearing for established homes.
“Rents have been climbing and they’re now as high as Melbourne,” he said. “The relative yield for investors is still quite strong, even with the current policy outlook.”
Rents in Hobart rose 7.3% in the year to March, PropTrack data shows, and the city's 0.85% vacancy rate is lower than any other capital except Darwin.
Top Hobart suburbs for house price growth
| Suburb | Median house price | 12-month change | Median asking rent | Indicative gross rental yield | |
| 1 | Austins Ferry | $734,000 | 22.3% | $650 | 5.0% |
| 2 | Mornington | $706,000 | 21.7% | $580 | 4.6% |
| 3 | Bridgewater | $505,000 | 20.2% | $483 | 5.6% |
| 4 | Chigwell | $590,000 | 19.2% | $550 | 5.2% |
| 5 | Berriedale | $691,000 | 18.1% | $600 | 5.0% |
| 6 | Risdon Vale | $535,000 | 16.3% | $550 | 4.8% |
| 7 | Rosetta | $711,250 | 15.1% | $620 | 4.8% |
| 8 | Mount Stuart | $1,000,000 | 15.1% | $680 | 4.1% |
| 9 | Glenorchy | $645,000 | 14.2% | $585 | 4.9% |
| 10 | Midway Point | $705,000 | 14.2% | $610 | 4.6% |
PropTrack price data shows how increased competition has driven up prices at the affordable end of the market.
Many of Hobart’s top suburbs for price growth in the past year have been concentrated in more-affordable pockets of the city, with house prices rising more than 20% in suburbs such as Austins Ferry, Mornington and Bridgewater.
Real estate agent and EIS Property director David Gunning said investor demand and first-home buyer incentives had driven price growth at the affordable end of the market, but tax changes had caused uncertainty recently.
“It’s been a really strong six to eight months, however it is definitely starting to taper off a bit due to the recent changes to negative gearing and capital gains tax,” he said.
“We have seen a drop off from investors since the budget, but they’re just starting to come back in.”
Mr Gunning said he also expected first-home buyer demand to ease once the stamp duty exemption concludes after June 30 this year.
The state is also winding back its first home owner grant from $30,000 to $20,000 as a measure to curb excess budget expenditure.
While affordable homes had been in high demand recently, Mr Gunning said higher-valued properties were taking longer to sell.
“We’re finding lower and mid segments are still pretty good, but there is a lot of stock on the market over that $2 million mark,” he said.
Supply squeeze tipped to drive further growth
Mr Redman said he expected Hobart’s price growth to continue, underpinned by a shortfall in the supply of new homes relative to population growth.
This is despite Tasmania’s slower population growth compared to the other states – the population rose by 0.3% in the year to September 2025 compared with a 1.6% increase at the national level, according to the Australian Bureau of Statistics.
“There's quite a large interstate migration outflow from Tasmania, and compared with other states a limited amount of net overseas migration - and also because of the older population base (there is) not much natural increase,” Mr Redman said.
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However, the rapid population growth that occurred prior to and during the pandemic, and the subsequent deceleration, had created conditions leading to an undersupply of properties, Mr Redman said.
“From 2016 to 2021 there was quite a big jump in migration growth,” he said. “The reversal of that has essentially driven that shortage of supply.”
About 3200 homes were built in Tasmania each year between 2020 and 2023, ABS data shows. But only 2300 homes were built across the state last year – the lowest annual figure recorded since 2017.
Housing supply shortages in Hobart could be exacerbated by competition for labour from major projects, such as a new stadium to be built at Macquarie Point. Picture: Cox Architecture
Mr Redman said competition for labour from large infrastructure projects, including the $1.13 billion Macquarie Point stadium which is expected to commence construction later this year, would put pressure on future housing supply.
“Even though Hobart's population growth isn’t going to be as strong relative to the other states, there’s a fair bit of capital projects that will mean there’s quite a bit of crowding out of residential construction due to the amount of labour required.”
“We’re back in that position of an undersupply relative to what the Hobart population requires.”
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