Authored by the expert who managed and guided the team behind the Australia Property Pack
Yes, the analysis of Hobart's property market is included in our pack
Hobart's rental yields currently average around 4.4% across all property types, making it one of Australia's more attractive investment markets compared to Sydney, Melbourne, and Brisbane. Units and apartments typically deliver higher yields than houses, with some suburbs like Gagebrook and New Norfolk achieving exceptional 6.0% returns for investors.
If you want to go deeper, you can check our pack of documents related to the real estate market in Australia, based on reliable facts and data, not opinions or rumors.
Hobart offers strong rental yields averaging 4.4% overall, with units outperforming houses at 5.0% versus 4.3% respectively.
The city's tight rental market with vacancy rates around 1.1% supports consistent rental income and yield stability for property investors.
| Property Type | Average Yield | Median Weekly Rent | Best Performing Suburbs |
|---|---|---|---|
| Houses | 4.3% | $575-$583 | Gagebrook (6.0%), Chigwell (5.7%) |
| Units/Apartments | 4.4-5.0% | $504-$520 | New Norfolk (6.0%), Geilston Bay (5.6%) |
| Short-term Rentals | Variable | $158/night average | Peak: $4,274/month, Low: $2,349/month |
| Vacancy Rates | 1.1-1.5% | Very tight market | Houses <1%, Units <2% |
| Comparison Cities | Hobart vs Others | Performance | Market Position |
| Adelaide | 3.7% vs 4.4% | Hobart ahead | Better yields across all types |
| Canberra | 4.1% vs 4.4% | Hobart ahead | Stronger unit performance |
What types of properties can you invest in across Hobart?
Hobart's investment property market offers four main categories for investors seeking rental income.
Houses represent the traditional choice, featuring stand-alone properties with land that typically attract families and long-term tenants. These properties generally require more maintenance but offer potential for capital growth through land appreciation.
Units and apartments provide lower maintenance investment options, often positioned near amenities and transport links. These properties particularly appeal to singles, couples, and students, making them suitable for areas near universities or the CBD.
Townhouses offer a middle ground between houses and units, providing more space than apartments while requiring less maintenance than traditional houses. This property type often attracts small families or professionals seeking more space without extensive maintenance responsibilities.
Commercial properties exist for more experienced investors, though they're less common for individual investors and typically located in the city center or suburban business districts for mixed-use or business rental purposes.
How do rental yields vary between different property types in Hobart?
Rental yields in Hobart show clear differences between property types, with units consistently outperforming houses.
Houses across Hobart deliver average yields around 4.3%, which remains competitive compared to other Australian capital cities. The lower yield reflects higher purchase prices relative to rental income, though houses often provide better long-term capital growth potential.
Units and apartments achieve higher yields, typically ranging from 4.4% to 5.0% across the city. The superior yield performance stems from lower purchase prices combined with strong rental demand from students, young professionals, and downsizers.
Top-performing suburbs demonstrate even stronger returns, with Gagebrook houses and New Norfolk units both achieving exceptional 6.0% yields. These outer suburbs offer attractive entry points for investors seeking maximum rental returns.
It's something we develop in our Australia property pack.
Which Hobart neighborhoods deliver the highest rental yields currently?
Several Hobart suburbs stand out for delivering exceptional rental yields as of September 2025.
| Suburb | Property Type | Median Price | Weekly Rent | Rental Yield |
|---|---|---|---|---|
| Gagebrook | House | $388,500 | $445 | 6.0% |
| New Norfolk | Unit | $355,000 | $408 | 6.0% |
| Chigwell | House | $455,958 | $498 | 5.7% |
| Geilston Bay | Unit | $537,000 | $583 | 5.6% |
| Old Beach | Unit | $461,250 | $500 | 5.6% |
| Moonah | Unit | $450,000 | $475 | 5.5% |
What are typical purchase prices including all fees for different property types?
Property purchase costs in Hobart vary significantly between property types and include substantial additional fees beyond the purchase price.
The median house price sits around $712,000 as of 2025, while unit prices range from $355,000 to $655,000 depending on location and quality. These prices position Hobart as more affordable than Sydney, Melbourne, or Brisbane while offering competitive rental returns.
Stamp duty represents the largest additional cost, calculated on progressive rates in Tasmania. Properties over $725,000 incur $27,810 plus $4.50 per $100 above that threshold. First home buyers receive full stamp duty exemption for properties under $750,000, providing significant savings for eligible investors.
Other essential fees include legal costs of $1,500-$3,000, building and pest inspections costing $400-$900, mortgage registration fees of $204, and loan application fees around $600. Ongoing annual costs include council rates at approximately 0.3-0.5% of property value, insurance premiums of $400-$800, and property management fees typically ranging from 7-10% of rental income.
Don't lose money on your property in Hobart
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How do expenses affect your net rental yield in Hobart?
Net rental yield calculations must account for numerous ongoing expenses that significantly reduce gross returns.
Mortgage repayments represent the largest expense for leveraged investors, with current investment loan rates ranging from 5.44% to 5.78% annually. On a $500,000 loan, annual interest costs alone approach $27,000-$29,000, substantially impacting cash flow.
Property management fees typically consume 7-10% of gross rental income, or approximately $1,500-$3,000 annually on a $30,000 rental income property. These fees cover tenant sourcing, rent collection, and routine maintenance coordination.
Maintenance costs average 1-2% of property value annually, meaning a $600,000 property requires $6,000-$12,000 in annual maintenance reserves. Insurance premiums add $400-$800 yearly, while council rates average around $2,000 annually for median-priced properties.
Tax implications vary significantly based on investor circumstances, with Australian residents facing marginal tax rates up to 37% on rental income, while non-residents encounter higher tax rates plus additional land tax obligations.
How do short-term rentals compare to traditional leases in Hobart?
Short-term rental platforms like Airbnb offer different risk-return profiles compared to traditional long-term leases in Hobart.
Airbnb properties generate median annual income around $29,924, with significant seasonal variation. Peak months like January deliver $4,274 monthly income, while low periods in August drop to $2,349 monthly. The median nightly rate sits at $158 with approximately 58% occupancy rates.
Traditional long-term leases provide more predictable income streams, with houses averaging $575 weekly rent ($29,900 annually) and units averaging $504 weekly rent ($26,200 annually). Long-term tenancies typically maintain 98-99% occupancy rates given Hobart's tight rental market.
Short-term rentals can potentially deliver higher peak returns but involve greater management complexity, cleaning costs, higher vacancy risk, and seasonal income fluctuations. Traditional leases offer stability, lower management burden, and consistent cash flow, making them more suitable for passive investors.
It's something we develop in our Australia property pack.
What are current weekly rent examples for different property types?
Rental prices across Hobart vary considerably based on property type and location as of September 2025.
| Property Type | Average Weekly Rent | Annual Income | Location Examples |
|---|---|---|---|
| All Houses | $575-$583 | $29,900-$30,300 | City-wide average |
| 3-Bedroom Houses | $575 | $29,900 | Standard family homes |
| All Units | $504-$520 | $26,200-$27,000 | City-wide average |
| 2-Bedroom Units | $522 | $27,100 | Standard apartments |
| Battery Point Houses | $700 | $36,400 | Premium waterfront area |
| Moonah Units | $450 | $23,400 | Affordable suburban option |
| Mount Nelson Units | $425 | $22,100 | Entry-level investment |
Who are the main renter types and what do they prefer in Hobart?
Hobart's rental market serves diverse tenant demographics with distinct property preferences and rental behaviors.
Students and young professionals represent a significant portion of renters, typically preferring units and apartments close to the University of Tasmania, TAFE campuses, or the CBD. This demographic values proximity to public transport, entertainment venues, and educational facilities, often accepting smaller living spaces for location convenience.
Families seeking rental accommodation prefer houses or townhouses in suburbs with quality schools, childcare facilities, and family-friendly amenities. These tenants typically sign longer leases and maintain properties well, making them attractive to investors despite potentially lower yields.
Retirees and downsizers increasingly choose low-maintenance units close to medical facilities, shopping centers, and public transport. This growing demographic values accessibility features and proximity to services over space, creating steady demand for well-located apartment properties.
Interstate migrants and remote workers have emerged as important renter segments, often seeking flexible lease arrangements and quality properties in lifestyle suburbs. This group may consider short-term rental options initially before transitioning to longer-term arrangements.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are vacancy rates across Hobart by property type and location?
Hobart maintains one of Australia's tightest rental markets with exceptionally low vacancy rates across all property types.
Overall vacancy rates across greater Hobart range from 1.1% to 1.5%, indicating severe rental shortage and strong landlord negotiating power. This tight market supports consistent rental income and regular rent increases for property owners.
Houses typically achieve vacancy rates below 1%, particularly in high-demand family suburbs with quality schools and amenities. The limited supply of rental houses relative to demand creates competitive tenant markets favoring landlords.
Units and apartments experience slightly higher vacancy rates but generally remain below 2%, especially in student-concentrated areas near universities. The higher density of unit developments provides more rental options, though demand remains strong from diverse tenant groups.
Regional Tasmania maintains vacancy rates between 1.2% and 1.4%, slightly higher than Hobart but still indicating tight market conditions. The regional areas offer alternative investment opportunities with potentially higher yields but lower capital growth prospects.
How have rents and yields changed in Hobart over recent years?
Hobart's rental market has experienced substantial growth over both short and long-term periods, creating favorable conditions for property investors.
Over the past five years, house rents have increased by approximately 7-8% annually, while unit rents have grown even faster at 8-10% annually. This strong rental growth reflects population increases, limited housing supply, and Hobart's growing appeal as a lifestyle destination.
The most recent 12-month period shows continued but moderating growth, with house rents rising 4.6-9.2% and unit rents increasing 7.1-8.8%. This represents a normalization from the extreme growth rates experienced during the pandemic period.
Rental yields have remained largely stable with slight increases for units, as rental growth has generally kept pace with property price increases. House yields have shown modest growth in some suburbs, particularly outer areas where price appreciation has been more moderate.
Property prices have continued rising, with suburbs like Geilston Bay and Moonah experiencing approximately 7% annualized growth. The market stabilized somewhat in 2025, with more moderate rental and price growth compared to previous years' exceptional increases.
It's something we develop in our Australia property pack.
What is the rental yield outlook for Hobart over the next decade?
Hobart's rental yield outlook appears stable to positive over multiple time horizons, supported by ongoing supply-demand imbalances.
The next year (2026) should see yields remain stable with possible slight improvements if vacancy rates stay tight and migration continues. Current market fundamentals support modest rental growth without significant price appreciation, potentially improving yield margins.
The five-year outlook (2026-2030) suggests gradual yield increases if housing supply remains constrained and population growth continues. However, yields are unlikely to reach the exceptional levels seen in Darwin or Perth, as Hobart's market matures and attracts more investment capital.
The ten-year outlook (2026-2035) presents more uncertainty, with rental growth expected to continue but potentially lower capital appreciation if interest rates remain elevated. Government housing targets and population distribution policies could influence longer-term supply-demand dynamics.
Key risks include potential oversupply if development accelerates significantly, economic downturns affecting migration patterns, or major policy changes impacting investment property taxation. Conversely, continued lifestyle migration and housing undersupply could support even stronger yield performance than current forecasts suggest.
How does Hobart compare to Adelaide and Canberra for rental yields?
Hobart significantly outperforms both Adelaide and Canberra across most rental yield metrics, making it an attractive investment destination.
| City | Overall Yield | House Yield | Unit Yield | Market Characteristics |
|---|---|---|---|---|
| Hobart | 4.4% | 4.3% | 5.0% | Tight market, low vacancy |
| Adelaide | 3.7% | 3.7% | 4.7% | More balanced supply-demand |
| Canberra | 4.1% | 3.8% | 5.2% | Government employment base |
| Yield Advantage | Hobart leads | Hobart strongest | Canberra slight edge | Different risk profiles |
Hobart delivers superior overall yields at 4.4% compared to Adelaide's 3.7% and Canberra's 4.1%. This 0.3-0.7% advantage translates to significant additional annual income for investors, particularly on larger portfolios.
House yields strongly favor Hobart at 4.3% versus Adelaide's 3.7% and Canberra's 3.8%. The 0.5-0.6% yield premium reflects Hobart's tighter rental market and relatively affordable house prices compared to rental income potential.
Unit yields show Hobart competitive at 5.0%, with Canberra slightly ahead at 5.2% and Adelaide trailing at 4.7%. All three cities offer solid unit investment opportunities, though market dynamics differ significantly between locations.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Hobart's rental market presents compelling opportunities for property investors seeking strong yields and stable rental income.
The combination of tight vacancy rates, diverse tenant demand, and competitive yields compared to other Australian capitals makes Hobart an attractive investment destination for both domestic and international property investors.
Sources
- Crest Property - Hobart Investment Guide 2025
- Savings.com.au - Tasmania Rental Yield Analysis
- Wise - Best Rental Yields Australia
- OpenAgent - Hobart Property Market Profile
- Compare Mortgage Brokers - Tasmania Investment Guide
- RealEstate.com.au - Hobart Growth Data
- Stryve - Australian Stamp Duty Guide 2025
- Money.com.au - Tasmania Stamp Duty Calculator
- AirROI - Hobart Airbnb Market Report
- SQM Research - Hobart Weekly Rents