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Hobart's property market is experiencing a gradual recovery in September 2025 after a significant correction from 2022 peaks.
The market shows signs of stabilization with modest price increases, extremely tight rental conditions, and strong underlying demand driven by interstate migration and major infrastructure developments.
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Hobart's property market shows modest recovery potential with median house prices around $693,000 and units at $550,000 as of September 2025.
The market benefits from Australia's tightest rental vacancy rate at 0.6%, strong rental yields of 4.2%, and major infrastructure projects totaling $1.1 billion including the Macquarie Point Stadium development.
| Market Indicator | Current Status (Sept 2025) | Outlook |
|---|---|---|
| Median House Price | $693,000 | 1-3% growth forecast |
| Median Unit Price | $550,000 | Stable to modest growth |
| Rental Vacancy Rate | 0.6% | Remains tight |
| Rental Yields | 4.2% | Strong investor returns |
| Days on Market | 47 days | Improving buyer conditions |
| Population Growth | 1.2% annually | Sustained demand driver |
| Infrastructure Investment | $1.1 billion projects | Long-term value support |
What's been happening with Hobart's median house and unit prices over the past 12 months?
Hobart's property market has shown signs of recovery after significant declines from its 2022 peak.
As of September 2025, median house prices sit around $693,000, representing a modest 1.0% increase over the past year. However, this growth comes after the market experienced a 10.4% decline from its March 2022 peak of approximately $770,000, making Hobart the capital city with the largest price correction in Australia.
Unit prices have faced more pressure, with values around $550,000 showing mixed performance. While some months have seen slight declines, the quarterly trend indicates resilience in certain market segments. The house-to-unit price gap in Hobart remains smaller than other capitals at just 23%, indicating relatively balanced pricing between property types.
Monthly movements have been volatile but trending positive, with July 2025 showing a 0.1% increase and the quarterly growth at 0.2%. The market appears to have bottomed out and is now in a gradual recovery phase, though still well below previous highs.
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How do current property prices in Hobart compare with the national average and other regions?
Hobart remains one of Australia's most affordable capital cities with significantly lower prices than the national median.
The current median house price of approximately $693,000 sits well below the national average of $912,000, making Hobart about 24% more affordable than the typical Australian capital city. This affordability gap has widened during the recent correction period when other capitals continued growing.
Within Tasmania, Hobart commands a premium over regional centers like Brighton ($554,000), Glenorchy ($613,000), and Devonport ($465,000). However, this premium reflects Hobart's status as the state capital with superior amenities, employment opportunities, and infrastructure.
Compared to other capitals, Hobart's median is roughly 58% below Sydney ($1.65 million), 45% below Melbourne ($980,000), and 25% below Brisbane ($890,000). Even traditionally affordable cities like Adelaide ($750,000) and Perth ($720,000) now exceed Hobart's pricing levels.
| Location | Median House Price (Sept 2025) | Annual Change |
|---|---|---|
| Hobart | $693,000 | +1.0% |
| National Average | $912,000 | +6.5% |
| Brighton (TAS) | $554,000 | +3.5% |
| Glenorchy (TAS) | $613,000 | +2.8% |
| Devonport (TAS) | $465,000 | +3.3% |
| Adelaide | $750,000 | +11.0% |
| Perth | $720,000 | +18.0% |
What are the latest rental yields and vacancy rates in Hobart?
Hobart's rental market represents one of the tightest in Australia with exceptional yields for investors.
Rental yields currently sit at 4.2% for combined properties, with house yields around 3.4% and unit yields reaching 4.4%. These returns significantly exceed most eastern capitals and place Hobart on par with Perth for investment attractiveness. The strong yields reflect both reasonable purchase prices and robust rental demand.
The vacancy rate has plummeted to just 0.6% as of August 2025, down from 1.4% in May 2024. This represents one of Australia's tightest rental markets, well below the healthy benchmark of 3.0% set by the Real Estate Institute of Australia. Some areas within Greater Hobart record vacancy rates as low as 0.5%.
Rental growth has been substantial, with house rents increasing 6.4% and unit rents rising 6.8% over the year to July 2025. Weekly median rents now sit at approximately $580 for houses and $470 for units. The combination of low vacancy rates and strong rental growth creates an exceptionally favorable environment for property investors.
This tight rental market hasn't seen a healthy vacancy rate since April 2012, nearly two decades ago, indicating structural undersupply issues that should support continued rental growth.
How strong is buyer demand right now based on market activity indicators?
Buyer demand in Hobart shows improving momentum with faster sales times and increased market activity.
Properties are now selling in a median of 47 days on market as of August 2025, up slightly from 40 days in May 2024, but still representing reasonable turnover for buyers. Some premium suburbs like Blackmans Bay are achieving sales in just 32 days, indicating strong demand for well-positioned properties.
Auction clearance rates in Hobart remain solid though below major mainland markets, reflecting the smaller auction market and more private treaty sales. Market activity has increased notably with buyer enquiries, open home attendance, and time-on-market reductions all improving through 2025.
Sales volumes increased 0.6% compared to the previous year, though the market maintains a more measured pace compared to the frantic activity seen in other capitals. This suggests buyers are taking time to make considered decisions rather than panic purchasing, creating more sustainable market conditions.
The improving buyer sentiment aligns with expectations of continued interest rate cuts and growing confidence that the market has stabilized after its correction period.
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What's the current level of housing supply including new listings and developments?
Housing supply in Hobart remains critically constrained with significant drops in new listings and limited development pipeline.
New listings fell dramatically by 28% for houses and 33% for units compared to the previous year, creating intense competition among buyers. Total listings dropped 15.7% year-on-year, contributing to the supply-demand imbalance supporting price stability and growth.
The construction pipeline shows just 52 standalone dwellings planned for 2025, indicating severe undersupply of new houses. However, approximately $1.1 billion worth of major developments are commencing construction, including the $300 million Macquarie Point Waterfront redevelopment and $240 million Macquarie Wharf project.
These large-scale projects will reshape Hobart's waterfront and add residential capacity over the medium term, though immediate supply relief remains limited. The development focus includes mixed-use projects combining residential, commercial, and cultural spaces rather than traditional housing estates.
Current stock levels represent approximately 2.9 months of inventory in balanced suburbs like Moonah, though many areas show even tighter supply conditions. This persistent shortage continues to favor sellers and support price stability despite broader economic uncertainties.
How affordable is Hobart property when measured against average local incomes?
Hobart property affordability has deteriorated significantly, though it remains more accessible than larger capitals.
A combined household income of approximately $145,600 is required to afford a median house in Hobart without experiencing mortgage stress, assuming a 20% deposit and current interest rates. This represents a substantial increase from previous years and highlights growing affordability challenges for local buyers.
For units, buyers need a combined income of around $110,000 to avoid mortgage stress, making apartments and townhouses more accessible entry points for first-time buyers. The income requirements have increased as property prices recovered and interest rates remained elevated through much of 2024-2025.
Despite these challenges, Hobart remains significantly more affordable than Sydney (requiring $299,000+ household income) or Melbourne (requiring $220,000+ household income). The city offers approximately 50% better affordability than the largest capitals while maintaining capital city amenities and lifestyle.
First-time buyers benefit from government support including stamp duty exemptions up to $750,000 (saving up to $28,900), $10,000 First Home Owner Grants for new properties, and shared equity schemes providing up to $200,000 assistance through MyHome Tasmania.
What are the latest migration and population growth trends affecting demand?
Hobart continues experiencing strong population growth driven by interstate migration and international arrivals.
| Migration Source | Annual Growth Rate | Impact on Housing Demand |
|---|---|---|
| Interstate Migration | 2.1% | High - seeking affordability |
| International Migration | 0.8% | Moderate - students & workers |
| Natural Growth | 0.3% | Low - family formation |
| Total Population Growth | 1.2% | Strong ongoing demand |
| Remote Workers | 15% of interstate | High - lifestyle seekers |
| Overseas Buyers | 12% of sales | Investment demand |
The overall population growth rate of 1.2% annually translates to approximately 3,100 additional residents requiring housing each year. Greater Hobart's population reached 255,000 in 2025, with growth concentrated in outer suburbs where housing remains more affordable.
Interstate migration remains the primary growth driver, with many relocating from expensive mainland markets seeking lifestyle and affordability. Remote work flexibility has enabled this trend, with an estimated 15% of interstate migrants working remotely for mainland employers.
International migration includes both permanent residents and temporary workers, particularly in tourism, healthcare, and education sectors. The upcoming AFL team and major events are expected to further boost Hobart's profile and attract additional residents and investors.
How are interest rate changes affecting local borrowing power and demand?
Recent interest rate cuts have significantly improved borrowing capacity and buyer confidence in Hobart's market.
The Reserve Bank's rate cuts through 2025 have increased typical borrowing power by $36,000 to $53,700 for average households, providing substantial relief after the rate-rising cycle. This improvement in affordability has contributed to increased buyer activity and market stabilization.
Current variable mortgage rates have fallen to approximately 5.24% following the latest cuts, down from peaks above 6.8% in 2024. This reduction translates to monthly payment savings of $300-500 for typical Hobart mortgages, making home ownership more accessible.
However, Tasmania's household debt levels remain relatively high compared to local incomes, meaning multiple rate cuts may be needed before substantial buyer confidence returns. The state's economic base and wage growth lag behind mainland capitals, limiting the immediate impact of improved borrowing conditions.
First-home buyers particularly benefit from the rate environment combined with government incentives, though many still struggle to save deposits while paying high rents. The improving conditions should support sustained demand growth through the remainder of 2025 and into 2026.
What government incentives and grants are currently supporting buyers and investors?
Tasmania offers some of Australia's most generous first-home buyer support packages through 2025 and 2026.
The state has abolished stamp duty for first-home buyers on properties up to $750,000, saving eligible purchasers up to $28,900. This exemption runs retrospectively from February 2024 through June 2026, with automatic refunds for eligible buyers who purchased since the policy announcement.
First Home Owner Grants provide $10,000 for eligible buyers purchasing or building new homes, while the MyHome Tasmania shared equity scheme offers up to $200,000 (40% for new homes) or $150,000 (30% for existing properties) to help buyers with smaller deposits enter the market.
Additional support includes extended land tax exemptions for newly built rental properties, pensioner downsizing concessions, and payroll tax rebates for businesses employing apprentices and young workers. These policies aim to stimulate both supply and demand in the housing market.
The federal Home Guarantee Scheme allows eligible first-home buyers to purchase with deposits as low as 2-5% while avoiding lenders mortgage insurance, further improving accessibility for local buyers.
1. Complete stamp duty exemption (up to $750,000 properties)2. $10,000 First Home Owner Grant (new properties)3. Up to $200,000 shared equity assistance (MyHome Tasmania)4. Federal Home Guarantee Scheme eligibility5. Land tax exemptions for new rental properties
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What infrastructure and economic projects are influencing future property values?
Hobart faces a transformative period with $1.1 billion in major infrastructure projects reshaping the city's landscape and economic prospects.
The centerpiece is the $945 million Macquarie Point Stadium, scheduled for construction commencement in late 2025 and opening before the 2029 AFL season. This project includes a 23,000-seat multipurpose venue with conference facilities and will serve as home to Tasmania's new AFL team, the Tasmania Devils.
Complementing the stadium, the broader Macquarie Point urban renewal encompasses $300 million in waterfront redevelopment and $240 million for Macquarie Wharf improvements. These projects will create thousands of construction jobs and ongoing employment while establishing Hobart as a major events destination.
Transport infrastructure includes the Northern Suburbs Rapid Bus Network ($54 million), Brighton Transport Hub upgrades, and improved connectivity between suburbs and the CBD. Hobart Airport expansion is also planned to accommodate increased visitor numbers from major sporting and cultural events.
The combined infrastructure investment is expected to enhance property values in surrounding suburbs, improve connectivity across Greater Hobart, and attract additional residents and businesses to Tasmania's capital.
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What are experts forecasting for Hobart property values in the next 12-24 months?
Expert consensus suggests modest but sustained growth for Hobart's property market through 2025-2026.
Major bank forecasts predict 1.8% to 3.3% growth for Hobart house prices in 2025, with NAB expecting 3.3% growth and Westpac forecasting 3.0% increases. These projections position Hobart among the slower-growing capitals but indicate a return to positive territory after recent corrections.
KPMG's analysis suggests Hobart house prices will grow approximately 1.8% in 2025, followed by stronger performance in 2026 as interest rate cuts take full effect. Unit prices may outperform houses slightly, benefiting from affordability pressures pushing buyers toward apartments and townhouses.
Longer-term forecasts through 2027 indicate sustained but moderate growth, with Oxford Economics projecting cumulative gains of 8-12% over three years. This measured growth reflects supply constraints supporting prices while affordability challenges limit explosive growth.
The outlook assumes continued population growth, infrastructure development progress, and stable economic conditions. Most analysts view Hobart as offering better value and lower risk than expensive mainland markets while providing steady returns for patient investors.
What are the key risks to Hobart's property market outlook going forward?
Several risk factors could impact Hobart's property market recovery and future growth trajectory.
Affordability constraints represent the primary long-term risk, as property prices continue growing faster than local wage increases. If this trend persists, it could price out local buyers and reduce domestic demand, particularly affecting first-home buyers despite government support measures.
Economic slowdown risks include Tasmania's dependence on tourism, government employment, and resource sectors, which could be vulnerable to broader economic downturns. The state's smaller economy lacks the diversification of mainland capitals, creating concentration risk.
Policy changes could significantly impact market dynamics, including potential modifications to first-home buyer incentives, foreign investment rules, or rental market regulations. Changes to federal immigration policies could also affect population growth and demand.
Supply risks include both undersupply (supporting prices but limiting choice) and potential oversupply if major developments deliver faster than population growth. The large infrastructure projects could also face delays, cost overruns, or scope reductions affecting their positive market impact.
1. Affordability deterioration outpacing wage growth2. Economic slowdown affecting employment and confidence 3. Policy changes reducing buyer incentives or migration4. Infrastructure project delays or cost blowouts5. Oversupply from accelerated development completionsConclusion
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 property market outlook presents a compelling opportunity for informed buyers and investors seeking stable returns in Australia's most affordable capital city.
The combination of tight rental conditions, major infrastructure investment, and government support creates a foundation for sustained modest growth, though buyers should carefully consider affordability constraints and local economic factors when making investment decisions.
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Sources
- Which Real Estate Agent - Hobart Property Market Update
- OpenAgent - Hobart Property Market Data and Trends
- PRD - Hobart Property Market Update 1st Half 2025
- KPMG - House and Unit Price Forecasts 2025
- 4one4 Property - Tasmania 2025 Real Estate Market Analysis
- Savings.com.au - Hobart Suburbs to Watch in 2025
- Canstar - Income Required to Afford Property
- Premier of Tasmania - Stamp Duty Policy Update
- Premier of Tasmania - Macquarie Point Stadium Development
- Bamboo Routes - Hobart Real Estate Market Statistics