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Yes, the analysis of Tasmania's property market is included in our pack
Tasmania's property market presents a mixed picture for buyers in September 2025. While prices have shown moderate growth with Hobart leading the state, tight vacancy rates and declining affordability create both opportunities and challenges for different buyer types.
Tasmania's property market shows moderate price growth of 3.3% year-on-year, with statewide median house prices around $620,000. Hobart remains the most expensive market at $668,000-$685,000, while regional areas like Launceston ($440,000-$480,000) and coastal towns offer better affordability. Rental yields range from 4.2-5.6% depending on property type and location, supported by extremely tight vacancy rates below 1% across all major centers.
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Tasmania's property market offers balanced opportunities but faces significant affordability constraints, making it more suitable for investors seeking steady yields than first-time buyers.
Regional areas and coastal towns present better value propositions compared to Hobart's premium market, with stronger rental returns offsetting slower capital growth potential.
| Market Aspect | Current Status | Outlook |
|---|---|---|
| Median House Price (Statewide) | $620,000 (+3.3% YoY) | Stable to modest growth |
| Hobart Median Price | $668,000-$685,000 | Price corrections possible |
| Rental Yields | 4.2-5.6% | Supported by tight supply |
| Vacancy Rates | 0.5-0.7% | Remaining extremely tight |
| Population Growth | 0.3% annually | Slow but positive |
| Affordability | Price-to-income ratio 7.6x | Continuing to worsen |
| Interest Rates | 5.2-5.4% variable | Stable to easing |
What's the current average property price in Tasmania, and how has it changed over the past 12 months?
Tasmania's median house price sits at approximately $620,000 as of September 2025, representing a moderate 3.3% increase year-on-year.
Regional Tasmania shows even more affordable options with median prices around $517,000, making these areas attractive for first-time buyers and investors seeking better entry points. The price growth has been steady but not explosive, indicating a relatively balanced market compared to mainland capital cities.
Hobart continues to lead the state with median prices between $668,000 and $685,000, though the market experienced some volatility with peaks near $940,000 in September 2024 before stabilizing. This stabilization suggests the premium market may have reached a temporary ceiling, potentially creating opportunities for buyers who were previously priced out.
The year-on-year growth of 3.3% is considered sustainable and reflects genuine demand rather than speculative bubbles. This moderate appreciation rate suggests the market is maturing and finding its natural equilibrium after previous periods of rapid growth.
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How do property prices in Hobart compare with Launceston, regional towns, and coastal areas?
Hobart commands the highest property prices in Tasmania, with medians between $668,000-$685,000, while other areas offer significantly better affordability.
| Location | Median House Price | Price Difference vs Hobart |
|---|---|---|
| Hobart | $668,000-$685,000 | Base comparison |
| Launceston | $440,000-$480,000 | 35-40% cheaper |
| Devonport | $440,000 | 36% cheaper |
| Glenorchy | $575,000 | 16% cheaper |
| Regional Towns | Under $500,000 | 25-35% cheaper |
| Coastal Areas | $400,000-$500,000 | 30-40% cheaper |
| Sandy Bay (Premium) | $1,400,000 | 100% more expensive |
What's the rental yield right now across different property types like houses, apartments, and townhouses?
Rental yields across Tasmania are currently attractive, ranging from 4.2% to 5.6% depending on property type and location.
Houses deliver gross rental yields around 4.2-5.1%, with regional areas and outer suburbs like Glenorchy achieving the higher end at approximately 5.1%. Houses in premium locations like Sandy Bay typically yield closer to 4.2% due to higher purchase prices relative to rental income.
Apartments and units consistently outperform houses with yields reaching 5-5.6%, making them particularly attractive for investors. Regional apartments often achieve the highest yields due to lower entry costs combined with steady rental demand from local workers and students.
Townhouses fall between houses and apartments, typically yielding 4.5-5% depending on location and quality. The median statewide rent for houses is $500 per week, up 5.3% year-on-year, supporting these yield calculations and indicating healthy rental growth.
These yields are supported by extremely tight vacancy rates below 1%, which creates upward pressure on rents and helps maintain consistent rental income for investors.
How are vacancy rates trending in the short term, and do they differ much by area?
Tasmania's vacancy rates are exceptionally tight across all major centers, creating a landlord-favorable rental market.
Hobart maintains a vacancy rate of just 0.6%, while Launceston sits at 0.7% and Burnie records an even tighter 0.5%. These rates have shown minimal fluctuation over the past year, indicating structural supply shortages rather than temporary market conditions.
The tight vacancy rates continue into September 2025 with little sign of immediate relief, as new housing supply has not kept pace with demand. This creates strong rental market conditions for investors but challenges for tenants seeking accommodation.
Regional differences are minimal, with most areas experiencing vacancy rates well below the 2-3% considered healthy for a balanced rental market. This uniformly tight supply supports rental growth and yield stability across the state.
The consistency of these low vacancy rates indicates that the rental shortage is a systemic issue affecting the entire state rather than isolated pockets, suggesting sustained support for rental returns in the short to medium term.
What's the outlook for population growth and migration into Tasmania over the next 5 to 10 years?
Tasmania's population growth is projected to remain slow but positive, with annual growth of just 0.3% over 2024-2026.
The state government has ambitious plans to reach 650,000 residents by 2050, up from the current 515,000, but achieving this target will require significant improvements in migration attraction strategies. Current trends suggest this goal may be challenging to meet without substantial policy changes and economic incentives.
Interstate and overseas migration remain the primary focus of state policy, with programs designed to attract skilled workers, retirees, and returning Tasmanians. However, the success of these initiatives has been mixed, with demographic challenges including an aging population offsetting some migration gains.
The slow population growth creates a double-edged sword for property investors - while it limits speculative price bubbles, it also constrains rental demand growth and long-term capital appreciation potential. This makes Tasmania more suitable for yield-focused strategies rather than aggressive growth plays.
Tasmania's appeal as a lifestyle destination continues to drive some migration, particularly from mainland capital cities, but the scale remains insufficient to create significant demographic transformation or housing demand pressure.
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How many new housing developments or building approvals are in the pipeline that could affect supply?
The Tasmanian government has committed to delivering 10,000 new social and affordable homes by 2032, backed by significant annual budget investments.
Land release programs are ongoing around Hobart and regional centers, with urban expansion projects gradually progressing. However, the pace of development approvals has struggled to meet current demand levels, contributing to the ongoing supply shortage.
Major infrastructure projects supporting new developments include port upgrades in Devonport and planned transport improvements around Hobart. These projects are designed to unlock new development areas and improve connectivity to existing communities.
Despite government commitments and ongoing projects, the timeline for meaningful supply increases extends several years, suggesting the current tight market conditions will persist in the short to medium term. This delay between planning and delivery supports continued price stability and rental yield maintenance.
Private sector development activity remains constrained by construction costs, labor shortages, and regulatory processes, limiting the speed at which new supply can enter the market even with government support.
What's the forecast for interest rates and lending conditions in the next 6 to 18 months?
Interest rates have recently fallen and are expected to remain stable or ease further over the next 6-18 months, supporting property market activity.
Current variable mortgage rates for new loans hover around 5.2-5.4% per annum, with fixed rates somewhat higher. Recent rate cuts have already spurred increased buyer activity and market confidence across Tasmania.
Major banks and analysts forecast a stable to lightly easing lending environment through 2025 and into 2026. This outlook suggests potential further rate reductions could provide additional support to property prices and buyer affordability.
Lending conditions remain relatively accessible for qualified borrowers, though serviceability requirements continue to favor buyers with strong income stability. The combination of stable rates and healthy lending appetite creates favorable conditions for both owner-occupiers and investors.
The interest rate environment is particularly supportive for Tasmania given its more affordable price points compared to mainland capitals, allowing buyers to benefit from lower rates without excessive debt levels.
How affordable is property in Tasmania compared to the rest of Australia when measured against local incomes?
Property affordability in Tasmania has deteriorated significantly, with housing becoming increasingly unattainable for median-income households.
The house price-to-income ratio in Hobart has reached approximately 7.6 times, a dramatic increase from 2.8 times two decades ago. This places Hobart among the less affordable Australian capital cities relative to local income levels.
Only 14% of homes currently for sale are considered affordable for a median-income household, highlighting the severity of the affordability crisis. This compares unfavorably to historical norms where 30-40% of properties were typically accessible to median earners.
Mortgage repayments for median-income households now consume 48-50% of income, among the highest rates in Australia. This level is well above the traditional 30% threshold considered sustainable for household budgets.
Rental affordability has also deteriorated significantly, with a 25% drop in affordable rental listings and record-low vacancy rates pushing rents beyond many households' reach. This creates additional pressure on the property market as potential buyers remain trapped in expensive rental arrangements.
What are the short-term risks for buyers, like price corrections or oversupply in certain suburbs?
Short-term risks for Tasmanian property buyers center on potential price corrections, particularly in premium markets, and localized oversupply as new developments come online.
Hobart's premium segments have already shown signs of price stabilization or slight decline after reaching peaks near $940,000 in September 2024. This suggests the high-end market may be vulnerable to further corrections if economic conditions tighten or buyer sentiment shifts.
Rising household debt levels pose a risk if interest rates rebound unexpectedly, potentially stressing buyers who have stretched their borrowing capacity. The high percentage of income devoted to mortgage servicing leaves little buffer for economic shocks.
Localized oversupply risks exist in areas where new housing developments are concentrated, particularly if multiple projects complete simultaneously. This could temporarily depress prices in specific suburbs while the broader market remains tight.
Affordability constraints may limit buyer pools, particularly for first-time purchasers, potentially reducing demand pressure and supporting price corrections in entry-level segments of the market.
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What are the medium- to long-term growth drivers, such as infrastructure projects, tourism, or lifestyle migration?
Tasmania's medium to long-term property growth will be driven by infrastructure improvements, lifestyle migration, and tourism development, though the scale of impact remains moderate.
Major infrastructure projects include port upgrades in Devonport, continued land releases around Hobart, and government investments in social and affordable housing. These projects will improve connectivity and unlock new development opportunities over the next 5-10 years.
Tourism continues to be a significant economic driver, with Tasmania's reputation as a premium eco-tourism and cultural destination attracting visitors and potential residents. This supports both short-term rental markets and longer-term lifestyle migration from mainland Australia.
Lifestyle migration from mainland capital cities represents the strongest growth driver, as Tasmania offers relative affordability, environmental amenities, and quality of life advantages. However, employment opportunities and income levels remain constraints on large-scale migration.
State government population growth strategies actively encourage new residents and returning Tasmanians, though results have been mixed and fall short of ambitious targets. Success in these initiatives will be crucial for sustaining long-term property demand growth.
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If you want to buy to live in, which suburbs balance affordability, amenities, and lifestyle best right now?
Several Tasmanian suburbs offer excellent balances of affordability, amenities, and lifestyle for owner-occupiers in September 2025.
1. **Kingston** - Balances affordability around $660,000 with strong cultural amenities, reliable transport links, and family-friendly environments, making it popular with both families and retirees.2. **Glenorchy** - Offers excellent value with median prices around $575,000, good public transport connections, comprehensive shopping centers, and solid community facilities.3. **Launceston** - Provides the most affordable major city option with medians around $440,000-$480,000, growing cafe culture, and excellent access to regional attractions and employment.4. **Devonport** - Attracts buyers with affordable pricing around $440,000, upcoming infrastructure improvements including port developments, and appealing water views.5. **Regional coastal towns** - Offer the best lifestyle value with properties typically under $500,000, excellent natural amenities, and growing appeal for remote workers and retirees.Sandy Bay represents the premium option for high-end buyers with median prices near $1.4 million, offering exceptional amenities, top schools, and proximity to Hobart's CBD, but affordability is limited to higher-income households.
If you want to buy for renting out or resale, which areas and property types currently offer the strongest returns and lowest risk?
Investment opportunities in Tasmania favor specific locations and property types that balance yield potential with capital growth prospects.
Glenorchy and Claremont stand out for investors, with units and houses delivering yields around 5.1-5.6% combined with below-median purchase prices. These areas benefit from consistent rental demand and proximity to employment centers while maintaining affordability for diverse tenant demographics.
Kingston and regional towns offer attractive opportunities for townhouses and apartments, delivering higher yields while benefiting from lifestyle migration trends that provide downside protection. The combination of yield and demographic support makes these areas lower-risk investment options.
Devonport, Ulverstone, and other North Coast locations present emerging opportunities with low entry costs, infrastructure improvements planned, and growing rental demand. These areas offer medium-term capital growth potential alongside steady rental returns.
Property type preferences favor apartments and units for maximum yields (5-5.6%), while houses in affordable suburbs provide the best balance of yield (4.2-5.1%) and capital growth potential. Townhouses offer middle-ground options suitable for diverse investment strategies.
The extremely tight vacancy rates below 1% across all major centers provide strong support for rental income consistency, making most well-located properties relatively low-risk from a cash flow perspective.
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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.
Tasmania's property market in September 2025 presents a nuanced opportunity requiring careful consideration of buyer objectives and market positioning.
While rental yields remain attractive and vacancy rates support income stability, affordability constraints and slow population growth limit explosive capital growth potential, making careful location and property type selection crucial for success.
Sources
- Mortgage Choice - Tasmania Property Values
- REA - Property Growth Momentum
- AT Realty - Tasmanian Market September 2024
- REA - Tasmania Growth Picks 2025
- Your Investment Property - Top Suburbs Tasmania
- Blue Wealth - Best Rental Yields Australia 2025
- Which Real Estate Agent - Hobart Market Update
- Homes Tasmania - Dashboard May 2025
- Homes Tasmania - Dashboard April 2025
- National Housing Supply and Affordability Council