Buying property in Tasmania: is it worth it?

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 are current property prices in Tasmania and how have they changed over five years?

Tasmania's property prices have risen significantly over the past five years, with Hobart's median house price climbing from $514,097 in March 2020 to $673,858 as of May 2025.

This represents a 31% increase over five years, though the annual growth rate has moderated to around 1.0% in recent months. Statewide, property prices have grown by at least 3% annually over the five-year period, with the state averaging 5% per year over the past decade.

Regional areas outside Hobart have generally performed better than the capital, with many areas seeing consistent 3-5% annual growth even during periods when Hobart's market softened. The northern regions of Tasmania have been particularly strong performers, setting new price records and accounting for 24.3% of the state's property transactions.

As of September 2025, the market shows signs of recovery across most areas after a temporary slowdown in 2022-2024, with regional properties continuing to outpace Hobart's performance.

How do short-term rentals compare with long-term leases for returns?

Short-term rental yields typically outperform medium-term and long-term leases in Tasmania, especially in coastal and tourist-heavy locations where Airbnb and holiday lets command premium rates.

However, short-term rentals come with significantly higher volatility and management costs compared to traditional leases. Coastal properties can achieve rental yields of 5% or higher during peak tourism seasons, but these returns fluctuate dramatically based on seasonal demand and tourism trends.

Medium-term leases (3-12 months) and long-term rentals (12+ months) offer more stable income streams with yields typically ranging from 3.5% in Hobart to 4-5% in regional areas. Northern Tasmania and select urban centers report particularly strong occupancy rates for longer-term rentals.

Long-term capital growth prospects remain robust across Tasmania, with northern regions and coastal areas showing the strongest appreciation potential over the next 5-10 years, making the total return proposition attractive even with lower rental yields.

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

Which areas show the strongest growth now and future potential?

Northern Tasmania currently leads the state in price growth and market activity, setting new records and demonstrating strong resilience compared to other regions.

The northern regions have captured 24.3% of Tasmania's total property transactions and continue to show consistent demand from both investors and owner-occupiers. Cities like Launceston and surrounding areas benefit from job growth and infrastructure development that supports sustained price appreciation.

Coastal and lifestyle towns along Tasmania's east coast are expected to maintain strong growth trajectories over the next 5-10 years, driven by lifestyle migration and tourism demand. These areas combine capital growth potential with higher rental yields, particularly for properties suitable for short-term accommodation.

Southern Tasmania, including Hobart, experienced a price correction between 2022-2024 but is now showing signs of gradual recovery. However, the outlook for Hobart remains more modest compared to regional areas, with slower growth expected due to affordability constraints and market saturation.

How do different property types perform across urban and rural areas?

Property Type & Location	Median Price (2025)	Recent Performance	Growth Outlook
Hobart Houses	$715,165	Slow recovery from 2022-24 dip	Modest growth expected
Regional Houses	$520,000	+2.95% year-on-year	Strong growth potential
Hobart Apartments	~$430,000	Fluctuating, slower than houses	Moderate growth
Regional Apartments	$350,000-400,000	Stable with regional variations	Steady growth
Urban Land Blocks	Highly variable	Strong demand, limited supply	Excellent growth potential
Rural Land	$200,000-500,000	Growing lifestyle demand	Good growth prospects

How do major cities compare with smaller towns for affordability and returns?

Hobart commands higher entry prices but delivers slower growth, while Launceston and smaller regional centers offer better value and stronger current performance.

Hobart's median house price of $715,165 makes it less affordable for entry-level buyers, and the capital has experienced slower price growth since 2022. However, Hobart provides more stable rental demand and better infrastructure, making it suitable for conservative investors seeking steady returns.

Launceston and northern Tasmania towns offer significantly better affordability with median prices around $520,000 for houses, while delivering stronger growth rates and higher rental yields of 4-5%. These areas benefit from job growth and infrastructure investment that supports continued price appreciation.

Coastal towns provide the best of both worlds for many investors, combining reasonable entry prices with strong tourism-driven rental potential. Properties in these locations can achieve rental yields above 5% during peak seasons while maintaining solid capital growth prospects.

Smaller regional centers throughout Tasmania often provide the highest rental yields and strongest growth percentages, though they may have lower liquidity and fewer amenities than major urban areas.

What budget do you need to enter Tasmania's property market?

1. **Entry-level Hobart houses**: $673,000-$715,000 for established properties in outer suburbs2. **Regional houses**: $520,000-$570,000 for median quality homes in regional centers 3. **Hobart apartments**: Starting around $430,000 for units in acceptable locations4. **Regional apartments**: $350,000-$400,000 for apartments in regional towns5. **Land blocks**: Varies widely from $200,000 in rural areas to $400,000+ in established urban zones6. **Coastal properties**: $450,000-$800,000+ depending on proximity to beaches and amenities7. **First-home buyer advantage**: Stamp duty waived on properties up to $750,000 for eligible buyers

How do local economic factors affect property values across regions?

Job growth remains strongest in Launceston and select regional centers, directly supporting housing demand and price appreciation in these areas.

Major infrastructure projects, including housing construction pledges and transport upgrades, are particularly boosting northern and north-western regions of Tasmania. These developments create employment opportunities and improve connectivity, making these areas more attractive to both residents and investors.

Tasmania's population growth of 1.4% in 2024 continues to support sustained housing demand across the state. This growth is unevenly distributed, with regional centers receiving significant migration from both interstate and Hobart residents seeking affordability and lifestyle benefits.

The tourism industry significantly impacts coastal and regional property values, with areas that can capture short-term rental demand seeing stronger price appreciation. Economic diversification in regions like the north-west, driven by agriculture and manufacturing, provides additional stability to local property markets.

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

What are the main short-term risks facing Tasmania's property market?

Interest rate increases pose the most significant short-term risk, as higher borrowing costs reduce buyer purchasing power and could slow price recovery across all market segments.

High household debt levels in Tasmania make the market vulnerable to rapid rate rises, which could force distressed sales and pressure prices downward. This risk is particularly acute in Hobart where property prices are highest relative to local incomes.

Potential oversupply in certain urban and coastal areas represents another key risk, especially if development approvals continue at current levels while population growth moderates. Some popular coastal destinations may see rental yields compress if too many properties enter the short-term rental market simultaneously.

Economic volatility affecting tourism could significantly impact coastal property values and rental returns, particularly for properties dependent on holiday accommodation income. Regional areas heavily reliant on single industries also face concentration risk if local economic conditions deteriorate.

Should you buy to live in or continue renting in Tasmania?

In many regional areas of Tasmania, buying can outperform renting financially over a 5-10 year period, assuming property values continue growing at 3-5% annually.

Regional Tasmania offers the strongest case for buying over renting, with mortgage payments often comparable to rental costs while building equity. Properties in northern Tasmania and coastal towns provide particularly attractive buy-versus-rent scenarios due to strong growth potential and reasonable entry prices.

In Hobart, the financial gap between buying and renting has narrowed due to high entry prices and slower recent growth. Renters in Hobart may find better short-term financial flexibility, especially if they can invest the deposit difference in other assets.

First-home buyers benefit from stamp duty concessions on properties up to $750,000, significantly improving the buy-versus-rent equation across most of Tasmania's market. The decision should factor in lifestyle preferences, job security, and long-term location plans alongside pure financial considerations.

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 rental yields and occupancy rates can investors expect?

Regional and coastal houses deliver the strongest rental performance in Tasmania, often achieving yields of 4-5% or higher with excellent occupancy during tourism peak seasons.

Hobart rental yields typically range from 3.5-4% for both houses and apartments, with solid year-round occupancy rates for longer-term rentals. The capital city market provides more stable rental income but lower yield potential compared to regional alternatives.

Northern Tasmania currently offers the strongest combination of rental performance and price growth, with many properties achieving yields above 4% while experiencing capital appreciation. Industrial and mining activity in the north supports consistent rental demand from workers and families.

Short-term rental properties in tourism-focused coastal areas can achieve significantly higher yields during peak seasons, but investors must account for seasonal vacancies and higher management costs. Properties suitable for short-term accommodation require careful location selection and professional management to maximize returns.

What's the outlook for capital gains and optimal holding periods?

Typical property holding periods in Tasmania range from 7-10 years to maximize capital gains while minimizing transaction costs and capital gains tax implications.

Capital gains potential is highest in emerging northern regions and established coastal markets, where infrastructure development and population growth support sustained price appreciation. Regional properties outside Hobart offer the best combination of affordable entry prices and strong growth prospects.

Hobart's future growth is forecast to lag behind other Australian capitals but should deliver steady gains post-2024 as the market stabilizes. Properties in established Hobart suburbs may take longer to achieve significant capital gains but offer greater liquidity and stability.

The optimal holding period varies by location and property type, with regional properties potentially delivering strong returns in shorter timeframes due to rapid appreciation, while Hobart properties may require longer holds to achieve comparable percentage gains.

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

How do Tasmania's property taxes and costs compare with other states?

Cost Category	Tasmania	Comparison to Other States
Stamp Duty (First Home)	Waived up to $750,000	Most generous concession nationally
Ongoing Rates	Low to moderate	Below Sydney/Melbourne levels
Land Tax	Competitive rates	Similar to QLD/SA, below VIC/NSW
Property Maintenance	Lower than mainland	Reduced due to smaller market
Insurance Costs	Moderate	Mid-range nationally
Transaction Costs	Standard	Comparable to other states

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. Domain - House Price Report March 2020
3. BambooRoutes - Tasmania Real Estate Market
4. Mortgage Choice - Property Values in Tasmania
5. Your Mortgage - Median House Prices Australia
6. Australian Property Update - Housing Market Growth 2025
7. Australian Bureau of Statistics - Total Value of Dwellings
8. RealEstate.com.au - PropTrack Home Price Index