What's the property market outlook in Tasmania?

Authored by the expert who managed and guided the team behind the Australia Property Pack

Yes, the analysis of Tasmania'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 Tasmania. 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, Launceston, and Devonport. 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's the current median house price in Tasmania, and how has it changed over the past 12 months?

As of September 2025, the median house price in Tasmania sits at $712,000 for Hobart and $549,000 for regional areas.

Over the past 12 months, Tasmania's residential property market has shown modest but positive recovery. Hobart experienced 2.16% annual price growth, while regional Tasmania outperformed with 2.84% growth. The West and North West regions led the charge with impressive 5.55% annual growth, making them the strongest performers in the state.

This recovery marks a significant shift from the market's performance in 2022-2023, when prices fell from their March 2022 peak. Current prices remain approximately 10-11% below those peak levels, indicating substantial room for further growth as market confidence returns.

Monthly data shows renewed momentum, with Hobart recording 0.45% monthly growth in March 2025. Properties in premium suburbs like Sandy Bay now exceed $1.4 million, while affordable areas such as Glenorchy, Moonah, and Brighton continue attracting strong interest from first-home buyers.

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

How do rental vacancy rates look across major Tasmanian cities like Hobart, Launceston, and Devonport?

Tasmania's rental vacancy rates are among the tightest in Australia, creating an extremely competitive market for tenants.

Hobart leads with an exceptionally low vacancy rate of 0.6% as of September 2025, making it one of the most constrained rental markets nationally. This represents a significant tightening from previous years and reflects overwhelming demand for rental properties in the capital.

Launceston follows closely with vacancy rates below 1%, while regional centers like Devonport and Burnie record similar tight conditions at approximately 0.5-0.9%. These figures are well below the national average and indicate severe rental supply shortages across the state.

The tight vacancy rates have driven substantial rental price increases, with Hobart house rents climbing 7% to $600 weekly and regional areas experiencing 5% increases. This rental shortage benefits investors through strong cash flow but creates challenges for tenants seeking accommodation.

Statewide, Tasmania's vacancy rate fell from 2.4% to 2.1% over the past year, with over 57% of regional locations recording vacancy rates below 1%.

What's the average rental yield right now, and how does it compare with other Australian states?

Tasmania offers some of Australia's most attractive rental yields, particularly outside the capital city.

Hobart delivers solid rental yields averaging 4.2% for houses and 5.7% for units, positioning it competitively against other Australian capitals. These yields exceed Sydney, Melbourne, Brisbane, Adelaide, and Canberra for houses, though they sit behind Darwin and Perth.

Regional Tasmania presents exceptional opportunities, with towns like Rosebery achieving remarkable 9.9% rental yields for houses and Queenstown offering 9% yields. East Devonport leads unit yields at 6.1%, while Hadspen near Launceston provides 6.1% returns for units.

The strong yields reflect Tasmania's affordable property prices combined with robust rental demand driven by limited supply and steady migration. West Coast mining towns particularly benefit from transient workforce accommodation needs, creating sustained rental demand.

Compared nationally, Tasmania's yields rank among the top performing states, with regional areas consistently outperforming capital city markets across Australia.

Are housing supply levels in Tasmania—new builds, approvals, and land releases—keeping up with demand?

Supply Metric	Current Performance	Target/Requirement
Social/Affordable Homes Delivered	4,400 homes	10,000 by 2032
Land Lots Released	411 lots	800 lot target
Annual Building Approvals	Declining 12.6%	5,000+ needed annually
New Dwelling Starts Forecast	20% drop expected	25,000 over 5 years
National Housing Accord Progress	51% of target achieved	100% by 2029
Construction Industry Capacity	Severely constrained	Workforce expansion needed
Planning Approval Timeframes	Lengthy delays	Streamlining by 2027

How much interstate and overseas migration is currently flowing into Tasmania, and what impact is it having on housing demand?

Interstate and overseas migration continues driving Tasmania's population growth and housing demand, though at more moderate levels than the peak period of 2016-2021.

Tasmania receives its largest interstate migration flow from Victoria, with steady numbers of professionals, retirees, and lifestyle seekers relocating to the state. International migration also contributes significantly, particularly in skilled sectors addressing workforce gaps in health, construction, engineering, and hospitality.

The migration influx directly impacts housing demand by increasing household formation rates and rental requirements. Many interstate migrants initially rent before purchasing, contributing to the extremely tight vacancy rates observed across major Tasmanian cities.

Population growth driven by migration places immediate pressure on existing housing stock, as new construction has not kept pace with arrivals. This dynamic sustains strong rental demand and supports property values, particularly in areas with employment opportunities and lifestyle amenities.

The state government's population strategy acknowledges migration as essential for economic growth while recognizing the need for coordinated housing supply responses to accommodate new residents sustainably.

What are the key population growth forecasts for Tasmania over the next five to ten years?

Tasmania's population growth is projected to continue at a moderate pace of 0.45% annually, requiring approximately 2,700 new residents per year to reach the 2050 target of 650,000 people.

The Department of Treasury and Finance's medium series projections show Tasmania's population peaking at 641,045 by June 2053. Current population sits at approximately 571,500, having already exceeded the 2030 target of 570,000 residents eight years early.

Growth patterns show structural challenges, with Tasmania maintaining Australia's oldest median age at 42 years. Natural increase (births minus deaths) continues declining due to low fertility rates of 1.64, well below the replacement level of 2.1.

Migration remains the primary growth driver, though the state seeks to attract younger demographics aged 25-39 to balance its aging population. Successful attraction of working-age families will be crucial for sustaining housing demand and economic growth.

Regional variations exist within these projections, with Greater Hobart expected to capture the majority of growth while some rural areas may experience population decline or stagnation.

How are interest rate changes influencing buyer demand and borrowing capacity in Tasmania specifically?

The Reserve Bank's decision to cut the cash rate to 3.85% in May 2025 has significantly boosted buyer demand and borrowing capacity across Tasmania.

Each 0.25% rate cut increases borrowing capacity by approximately $12,000 for average income earners, substantially expanding the pool of potential buyers. This enhanced affordability particularly benefits first-home buyers who were previously priced out during the higher rate environment of 2022-2023.

Market activity has responded positively, with increased inquiries, higher open home attendance, and reduced time on market observed throughout 2024-2025. Properties in Hobart are now selling in an average of 19 days, down from 32 days in 2023.

The improved borrowing conditions have attracted both owner-occupiers and investors back to the market. Interstate buyers, who had largely retreated during the rate rising cycle, are showing renewed interest in Tasmania's affordable entry prices relative to mainland capitals.

Further rate cuts anticipated through 2025-2026 are expected to maintain this momentum, though the extent of price appreciation may be tempered by ongoing supply constraints and affordability considerations for local buyers.

What trends are visible in days on market for properties across different Tasmanian regions?

Days on market across Tasmania has improved significantly, reflecting renewed buyer confidence and market activity.

Hobart leads with the fastest sales times, averaging 19 days on market in premium locations and up to 32 days for standard properties. This represents a substantial improvement from the 2023 market, when properties took significantly longer to sell during the interest rate rising cycle.

Regional Tasmania shows more variation, with lifestyle destinations and affordable areas near major centers selling relatively quickly, while remote locations may take longer. Towns with strong employment bases or tourism appeal generally achieve faster sales than purely residential areas.

The improvement in selling times correlates directly with interest rate cuts and increased buyer activity. Properties priced competitively for their location and condition are moving quickly, while overpriced listings remain on market longer.

Seasonal patterns also influence selling times, with spring and early summer traditionally showing the fastest movement, though the current low interest rate environment has extended active buying periods throughout the year.

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 suburbs or regions in Tasmania are showing the strongest capital growth over the past three years?

1. **North Hobart** - Recording exceptional 22.2% annual growth in 2024, driven by heritage charm and proximity to CBD2. **Kingston** - Achieving 1.4% annual growth with strong prospects due to potential AFL performance center development3. **Bellerive** - Benefiting from Ninja Stadium redevelopment and waterfront location with ferry connections4. **West and North West Tasmania** - Leading regional growth at 5.55% annually, including towns like Ulverstone and Devonport5. **Newstead (Launceston)** - Top performer in northern Tasmania with university proximity and urban renewal projects6. **Brighton** - Attracting first-home buyers with affordability and new housing developments7. **Regional lifestyle destinations** - Coastal towns and tourism hubs showing sustained capital appreciation

What government incentives, taxes, or regulations are affecting property buyers and investors in Tasmania right now?

Tasmania offers Australia's most generous first-home buyer incentives, with complete stamp duty exemption for properties under $750,000 until June 30, 2026.

Eligible first-home buyers save up to $28,900 in stamp duty costs, with the policy applying retrospectively to February 18, 2024. Nearly 1,700 Tasmanian households have already benefited, saving an average of $18,400 each. The program also includes a $30,000 First Home Owner Grant for new construction.

Investors benefit from enhanced build-to-rent incentives including land tax exemptions for up to three years and federal tax advantages with lower MIT withholding tax and increased depreciation rates. Properties converted from short-stay to long-term rental also qualify for land tax relief.

The land tax threshold increased from $99,999 to $124,999, providing relief for property investors. Pensioner downsizing concessions offer 50% duty reductions for properties under $600,000, supporting market turnover.

New tenancy laws grant renters rights to keep pets and provide greater security, while the MyHome shared equity scheme expands to offer up to $300,000 for new homes or $200,000 for existing properties.

How are infrastructure projects—like transport, energy, or commercial developments—expected to influence property values in Tasmania?

Tasmania's unprecedented $30+ billion infrastructure pipeline over 10 years is set to significantly boost property values in connected corridors and development hubs.

The Bridgewater Bridge expansion will improve connectivity between Hobart's eastern and western suburbs, making previously less accessible areas more attractive to buyers and investors. Hobart Airport's expansion to accommodate international flights supports the city's economic growth and property demand.

The confirmed AFL Tasmania Devils high-performance center in Kingston, along with the National Basketball League's JackJumpers facilities, will drive development and appreciation in southern suburbs including Kingston, Margate, Taroona, and Blackmans Bay.

Devonport's $55 million Living City waterfront precinct revitalization, featuring hotels, amphitheaters, and recreational facilities, positions the northern port city for substantial value growth. The University of Tasmania's Inveresk Campus redevelopment in Launceston will boost surrounding property values.

Public transport upgrades, particularly in Hobart's northern and eastern suburbs, alongside major road improvements including the completed Tasmanian Bypass, enhance accessibility and property desirability across multiple regions.

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What risks should investors and homebuyers watch for in the Tasmanian property market over the next two to three years?

1. **Persistent housing undersupply** - Construction targets consistently missed, with Tasmania achieving only 51% of National Housing Accord commitments2. **Affordability crisis deepening** - Housing affordability at lowest levels since 2008, potentially pricing out local buyers3. **Aging population dynamics** - Structural demographic challenges may reduce long-term housing demand as baby boomers age4. **Interest rate sensitivity** - Market vulnerable to future rate rises that could reverse current momentum5. **Construction industry constraints** - Severe workforce shortages and rising material costs limiting new supply6. **Regulatory uncertainty** - Potential changes to land tax, tenancy laws, or planning approvals could impact investor returns7. **Economic growth challenges** - Tasmania forecast for 1.1% economic decline in 2024-25, the only Australian state expecting negative growth

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. Tasmania 2025 Real Estate Market - 4one4 Property
2. Best Areas to Buy Property in Tasmania 2025 - OpenAgent
3. Tasmania Price Forecasts - BambooRoutes
4. Hobart Property Market Update - Which Real Estate Agent
5. Highest Rental Yields in Tasmania - Savings.com.au
6. Tasmania's Property Markets 2025 - API Magazine
7. Tasmania Population Strategy - Department of State Growth
8. Stamp Duty Abolished for First Home Buyers - Premier of Tasmania
9. Australia's Housing System Crisis 2025 - Australian Property Update
10. Tasmania Real Estate Market Statistics - BambooRoutes