What are the best property investments in Hobart?

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

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Hobart. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Australian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Hobart, Sydney, and Melbourne. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What types of properties can you invest in within Hobart?

Hobart offers several distinct property types for investment, each with specific characteristics and target markets.

Traditional houses remain the most sought-after option for families and long-term tenants, with median prices at $715,000 as of September 2025. These properties typically attract stable, long-term rental relationships and offer solid capital growth potential over time.

Units and apartments have emerged as particularly attractive investments, showing stronger annual price growth recently. With median prices around $560,000, they offer the smallest price gap between houses and units of any Australian capital city. This makes units especially appealing for investors seeking both rental yield and affordability.

Townhouses provide a middle-ground option that appeals to downsizers and professionals seeking lower maintenance requirements while maintaining proximity to urban amenities. These properties often attract quality tenants who value the balance between space and convenience.

It's something we develop in our Australia property pack.

Should you buy or rent property in Hobart for investment purposes?

Buying property in Hobart generally provides better long-term investment outcomes compared to renting, particularly given current market conditions.

For houses, median mortgage payments sit at approximately $837 per week (assuming 6% interest rate and 20% deposit), while rental costs average $573 per week. This creates a significant gap that favors renting in the short term, but buying builds equity and positions investors for capital growth benefits.

The calculation changes dramatically for units, where mortgage repayments average $440 per week compared to rental costs of $483 per week. This near-parity makes buying units particularly attractive for investors, as the holding costs are similar to renting while building equity.

Hobart's steady price recovery and ultra-low vacancy rates of 0.6-0.9% create strong rental demand, supporting both capital growth and rental income for property owners. Investors who can afford the deposit and plan to hold properties long-term typically benefit more from buying than renting in the current market environment.

What were Hobart property prices in the past, what are they now, and what's the forecast?

Time Period	Median House Price	Price Change
March 2022 (Peak)	$748,000	Market peak
2023 (Trough)	$650,000	-12% from peak
September 2025 (Current)	$715,000	+2.58% year-on-year
2025 Forecast	$737,000-$765,000	+3-7% expected growth
2026 Forecast	$759,000-$818,000	Continued steady growth
Units (Current 2025)	$560,000	+0.08% year-on-year
5-Year Historical Gains	Approximately 29%	Strong long-term performance

What are the current trends in Hobart's real estate market?

Hobart's real estate market is experiencing a modest but steady recovery following the significant downturn from the 2022 peak.

The most significant trend is the extremely tight rental market, with vacancy rates remaining at record lows of 0.6-0.9%. This shortage has driven rental growth sharply upward, with house rents increasing 7.8% year-on-year as of September 2025.

Recent interest rate cuts have provided a boost to buyer confidence, contributing to renewed market activity. However, buyers are taking more time to make decisions, as evidenced by increased days on market compared to previous years.

Supply remains constrained despite new housing developments, with demand continuing to outstrip available inventory. Infrastructure investment across Hobart is supporting market fundamentals, though the pace of new supply delivery remains below what's needed to significantly ease market tightness.

What's the step-by-step process for buying property in Hobart?

1. **Market research and analysis**: Study price trends, growth areas, and supply-demand factors specific to Hobart's different suburbs and property types.2. **Financial preparation**: Determine your purchase budget, save for a 20% deposit, and obtain pre-approval from lenders to understand your borrowing capacity.3. **Property search and inspection**: Shortlist target suburbs and property types, attend open homes and private inspections, and compare available options.4. **Due diligence and professional advice**: Arrange building and pest inspections, review contracts of sale thoroughly, and engage a solicitor or conveyancer for legal guidance.5. **Formal loan approval**: Finalize your mortgage arrangement with your chosen lender or mortgage broker to secure funding.6. **Offer and negotiation**: Submit competitive offers, negotiate terms including price and settlement dates, and execute the contract of sale.7. **Settlement completion**: Complete all legal paperwork, transfer funds, and register ownership to finalize the property purchase.

Who typically invests in Hobart's property market?

Hobart attracts a diverse range of property investors drawn by its affordability and lifestyle appeal compared to other Australian capitals.

Local and interstate buyers form the primary investor base, often seeking lifestyle-driven relocation opportunities combined with investment potential. Many investors are attracted by Hobart's relative affordability compared to Sydney and Melbourne property markets.

Young professionals and families frequently target suburbs with quality amenities, good school zones, and convenient transport connections. These investors typically focus on properties that offer both livability and rental appeal.

Retirees and downsizers represent another significant investor segment, often moving from larger properties to smaller units or townhouses while maintaining investment portfolios. Income-focused investors particularly favor units and apartments for their higher rental yields.

What are the best reasons to invest in Hobart, and what are the reasons to avoid it?

Hobart offers compelling investment advantages, particularly its ultra-tight rental market with vacancy rates of just 0.6-0.9%.

The rental yields are exceptionally strong, with houses delivering 3.1-3.9% returns and units achieving up to 5.7% yields. This income potential significantly exceeds many other Australian capital cities.

Entry costs remain affordable compared to Sydney and Melbourne, with median house prices at $715,000 providing accessible investment opportunities. The city benefits from ongoing infrastructure investment and proximity to natural attractions that support long-term growth.

However, investors should consider that annual price growth is more subdued than during boom periods, with modest forecasts of 3-7% growth expected for 2025. Affordability constraints are emerging as prices rise faster than local incomes, potentially limiting future buyer pools. The limited property supply means fewer investment options and increased competition among buyers.

Which types of properties suit different budgets in Hobart?

Budget Range	Property Type	Typical Locations
Under $600,000	Units, Older Houses	Moonah, Old Beach, Glenorchy
$600,000-$700,000	Quality Units, Small Houses	Kingston, Lenah Valley
$700,000-$900,000	Quality Houses, Premium Units	South Hobart, New Town
$900,000-$1,200,000	Large Houses, Townhouses	North Hobart, Mount Nelson
Over $1,200,000	Premium Houses, Waterfront	Sandy Bay, Battery Point

What common mistakes should investors avoid when purchasing property in Hobart?

1. **Insufficient market research**: Many investors fail to analyze local market trends, rental demand patterns, and suburb-specific growth factors before purchasing.2. **Lack of clear investment strategy**: Investors often purchase without defining whether they're targeting capital growth, rental income, or lifestyle benefits.3. **Underestimating total ownership costs**: Failing to budget for ongoing maintenance, council rates, strata fees, and property management expenses can severely impact returns.4. **Over-leveraging without buffers**: Borrowing to maximum capacity without emergency funds for repairs, vacancy periods, or interest rate increases.5. **Attempting DIY property management**: Many investors underestimate the time and expertise required for effective property management, leading to costly mistakes and tenant issues.6. **Poor renovation timing and planning**: Undertaking improvements without considering tax implications, market demand, or strategic timing can waste money and reduce returns.

It's something we develop in our Australia property pack.

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.

Which areas in Hobart offer the best investment opportunities?

Hobart's investment opportunities vary significantly by location, with different areas serving different investment strategies and budgets.

For affordable investment opportunities with strong yields, Moonah, Glenorchy, Brighton, and Bridgewater offer high rental returns and steady tenant demand. These areas typically attract families and long-term renters seeking affordable housing options.

Growth corridor suburbs like Kingston, New Town, and Lenah Valley provide balanced opportunities combining good rental yields with future development potential. These areas benefit from infrastructure investment and increasing demand from young professionals.

Premium locations including Battery Point, Sandy Bay, and North Hobart command higher prices but offer strong long-term capital growth potential. These areas attract quality tenants and maintain consistent demand due to their proximity to the CBD and lifestyle amenities.

What are the key factors for successful long-term rental investments in Hobart?

Location selection is crucial for long-term rental success, with areas like Moonah, Glenorchy, Kingston, and Brighton offering high rental demand and low vacancy rates.

Target tenant profiles include families seeking affordable housing, professionals wanting convenient access to employment centers, and long-term residents preferring stable accommodation. University areas like Sandy Bay and North Hobart also attract student tenants, though these may require different management approaches.

Rental income varies significantly by property type and location. Houses typically achieve $600-620 per week, while units range from $480-550 per week. Yields vary from 3.1% to 6.2% depending on the specific area and property type.

Key success criteria include proximity to employment centers, quality schools, shopping facilities, and public transport. Properties offering strong yields, low vacancy rates, and ease of management tend to perform best for long-term investors.

What should you know about short-term rental investments in Hobart?

Short-term rental operations in Hobart require permits through the Tasmanian Planning Commission, with annual renewals and strict documentation requirements.

The best performing areas for short-term rentals include Battery Point, Sandy Bay, North Hobart, Salamanca Place, and the Hobart CBD, where tourist demand remains consistently strong due to proximity to major attractions.

Income potential is substantial, with top-performing Airbnb properties earning over $5,730 per month. Median monthly earnings sit around $2,634, with annual averages ranging from $38,000 to $59,000 for 2024-2025 operations.

Guest profiles typically include domestic and international tourists, business professionals, and event visitors. The market shows strong seasonality, with peak demand during summer months and weaker performance in winter. Professional management and dynamic pricing strategies can significantly maximize both occupancy rates and rental yields.

It's something we develop in our Australia property pack.

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.

Sources

1. OpenAgent - Hobart Property Market
2. BambooRoutes - Hobart Price Forecasts
3. BambooRoutes - Hobart Property Forecast
4. Crest Property - Hobart Investment 2025
5. BambooRoutes - Hobart Property
6. OpenAgent - Best Suburbs Hobart
7. PRD - Hobart Market Update 2025
8. More Tasmania - Market Analysis
9. InvestorKit - Housing Market Q3 2025
10. Canstar - Best Suburbs Hobart