From lagging to lifting: Tasmania's housing market eyes a 2026 revival
Tasmania’s 10 best and worst property markets reveal how new infrastructure and economic shifts are reshaping the state, and where prices could head in 2026.
There’s plenty happening in Tasmania, including a prospective new AFL stadium, a multi-million dollar Treasury Building Complex redevelopment and five energy-related projects valued at least $1 billion each, such as Marinus Link and the Robbins Island Wind Farm.
The nation’s smallest state is attracting some big investments, with the infrastructure pipeline expected to bring in more than $30 billion over the next decade.
While mid-sized capitals like Perth, Brisbane and Adelaide took off over the past three years, Hobart and the state more broadly has seen its property market underperform.
Hobart’s current annual growth rate of 2.4 per cent is a marginal improvement but still far behind the likes of Darwin’s 15.4 per cent gains, Brisbane’s 10.8 per cent and Perth’s 9.4 per cent.
It is, however, massively more buoyant than the 12.7 per cent annual decline recorded in mid-June 2023.
There are also signs pointing towards a market recovery.
Every capital city has recorded listing reductions in the double digits, but none more than Hobart, which is down 33 per cent compared to the same period last year.
Hobart renters are struggling with rents that have easily outpaced inflation and wages growth, up 6.9 per cent over the year, but investors may look to increase that housing supply as they are drawn to the city’s vacancy rate of 0.4 per cent, the lowest in the country.
And as with all cities, there are markets within markets.
Cotality data provided exclusively to API Magazine shows house price movements over the past year range from Romaine’s 14.9 per cent increase to Bridport, which has a similar median value but fell 5.5 per cent.
TOP 10 - HOUSES
| Suburb Name | Median value | 1 year change | 5 year change |
|---|---|---|---|
| Romaine | $526,430 | 14.9% | 57.1% |
| Sheffield | $534,413 | 11.4% | 79.5% |
| Berriedale | $561,919 | 11.2% | 37.9% |
| Shorewell Park | $427,783 | 10.4% | 57.8% |
| Chigwell | $538,073 | 8.8% | 37.6% |
| Lauderdale | $864,547 | 8.7% | 32.2% |
| Kingston Beach | $878,401 | 7.9% | 42.3% |
| East Devonport | $446,510 | 7.9% | 65.2% |
| Sandford | $1,100,006 | 7.8% | 35.8% |
| Upper Burnie | $413,276 | 7.7% | 65.2% |
BOTTOM 10 - HOUSES
| Suburb Name | Median value | 1 year change | 5 year change |
|---|---|---|---|
| Bridport | $557,841 | -5.5% | 55.6% |
| Sandy Bay | $1,242,583 | -4.8% | 16.2% |
| Norwood | $623,821 | -3.0% | 40.5% |
| North Hobart | $903,664 | -2.7% | 27.4% |
| Battery Point | $1,341,535 | -2.0% | 3.7% |
| South Hobart | $892,201 | -1.2% | 17.5% |
| Campbell Town | $387,173 | -1.0% | 63.9% |
| Carlton | $615,069 | -0.8% | 46.3% |
| East Launceston | $860,648 | -0.8% | 33.2% |
| Invermay | $482,197 | -0.2% | 38.7% |
Source: Cotality.
The top five, and seven of the top ten, performing housing markets are in the affordable $500,000 or below bracket. Conversely, seven of the ten worst performers are pricier suburbs above $600,000.
Russell Yaxley, President of the Real Estate Institute of Tasmania, told API Magazine that even with a median price of $686,262 as of 1 November, buyers were feeling the affordability squeeze.
“The strength in sub-$500,000 suburbs reflects where genuine buyer demand exists, which is with first home buyers and also active investors at that price point.”
“Higher end markets are feeling the pinch from affordability constraints and tighter borrowing capacity.”
Eliza Owen, Head of Research, Cotality, said the focus on lower priced stock may be reflective of household finance conditions.
“High interest rates in the latter part of 2024, cost of living pressures and depleted savings forced buyers to more affordable pockets of the housing market.
“On a quarterly basis this trend held, despite household conditions gradually improving through 2025.
“The lower end of the market may also be more attractive to investors, where low-priced properties tend to have higher gross rent yields,” Ms Owen told API Magazine.
Unit markets’ ten best and worst
While the gains in the unit market fall short of the house price increases, the difference between the best and worst is also significant, ranging from Prospect Vale’s 8.6 per cent gain to Wynyard’s 6.6 per cent decline.
The unit market appears to be more stable than houses, with only seven suburbs going backwards over the course of 12 months.
“Affordability is a constant concern in Tasmania,” Mr Yaxley said.
“Many buyers are pivoting towards units as a more attainable entry point, which is helping to stabilise that segment relative to the house market.”
TOP 10 - UNITS
| Suburb Name | Median value | 1 year change | 5 year change |
|---|---|---|---|
| Prospect Vale | $447,999 | 8.6% | 58.5% |
| Blackmans Bay | $614,271 | 8.2% | 36.1% |
| Moonah | $485,332 | 7.3% | 29.3% |
| Trevallyn | $454,730 | 5.9% | 58.8% |
| Riverside | $438,426 | 5.5% | 44.5% |
| Claremont | $461,452 | 4.9% | 31.3% |
| Newnham | $363,790 | 4.7% | 49.4% |
| Sorell | $504,900 | 4.3% | 36.3% |
| Bellerive | $597,977 | 4.1% | 35.5% |
| Legana | $495,989 | 3.2% | 60.3% |
BOTTOM 10 - UNITS
| Suburb Name | Median value | 1 year change | 5 year change |
|---|---|---|---|
| Wynyard | $353,437 | -6.6% | 47.0% |
| Launceston | $492,496 | -5.6% | 28.3% |
| Devonport | $373,833 | -4.3% | 37.2% |
| Newstead | $424,136 | -1.4% | 37.2% |
| Battery Point | $819,740 | -1.2% | 14.4% |
| Lenah Valley | $534,219 | -0.4% | 18.3% |
| New Town | $470,477 | -0.3% | 11.1% |
| Ulverstone | $417,225 | 0.2% | 64.4% |
| Sandy Bay | $635,683 | 0.3% | 8.0% |
| Kingston | $566,614 | 0.5% | 33.6% |
Source: Cotality.
Tony Morrison, Chief Executive Officer, Harcourts Tasmania, told API Magazine that “first home buyers and investors are only just starting to come back into the market as interest rates have stabilised and started to drop.”
“This has kickstarted the lower end of the market.
“What usually happens is the higher price brackets start to follow this trend as first home sellers start to move up to become second home buyers.”
Ms Owen said the state’s low vacancy rates will prove a lure to property investors.
“Low vacancy rates will likely add to the case for investment in the state, especially where this seems to be driving strong rent growth of 6.2 per cent across the city in the past year.
“This is above national rent growth of 4.3 per cent in the past 12 months.
“Gross rent yields across the entire Hobart market are estimated to be 4.4 per cent city wide, and 4.8 per cent across the relatively cheap unit stock.”
The 2026 property market prospects
Much of the attention on Tasmania over the winter months was on the likelihood of the state having a team join the Australian Football League.
The Tasmania Football Club, nicknamed the Devils, is a professional Australian rules football club that hopes to compete from the 2028 AFL season onwards.
But everything hinges on the fate of the roofed, 23,000-seat stadium proposed for Macquarie Point.
The $1.13 billion project has met with strong opposition and in September Tasmania's Planning Commission recommended against it going ahead. It will ultimately be decided by Tasmanian parliamentarians, with a crucial vote in the upper house in December.
I imagine the northern suburbs of Hobart would attract slightly stronger growth and investment than other parts of the city in 2026.
- Eliza Owen, Cotality
The decision will likely have a huge impact on the property market.
“Hobart property has slowed, probably due to the fact that the Hobart market had been hot and one of the highest performing and highest growth capital cities for an extended period of time, so things had to eventually slow down,” Mr Morrison said.
“If you look back over the last five or six years Hobart has had enormous growth.
“If the AFL stadium finally goes ahead in Hobart we expect this will kickstart another upsurge in prices.”
He also saw the vacancy rate as a key market shaper, with the stadium again casting its long shadow.
“The low vacancy rate will push rental returns up, which will become even more appealing for interstate investors, especially if the stadium goes ahead.
“There will be lots of people wanting to get into the short term accommodation market to capitalise on the influx of tourists.”
The REIT president saw the market continuing to stabilise.
“Hobart’s market is steady, after many years of strong growth, it’s now consolidating, with affordability pressures and limited new stock keeping price movement modest compared to the mainland capitals,” Mr Yaxley said.
“A 0.4 per cent vacancy rate underscores extraordinary rental demand and signals opportunity for investors but the challenge is finding the right property with lower supply, rising costs and legislative pressures.”
Economic drivers, Hobart hotspots
The AFL stadium is not the only game in town.
The Treasury Complex has the potential to become a benchmark for civic renewal in Australia. Located between Hobart’s waterfront and CBD, the Treasury Complex is a landmark of architectural and institutional significance spanning approximately 8,220 sqm across a 5,691sqm site.
The expressions of interest process opened last week for what will be a transformative city project.
Other key areas of development are the Northern Cities Major Development Initiative to revitalise Launceston, Devonport, and Burnie, and the Derwent Entertainment Centre upgrade.
Despite the statewide developments, there are also myriad economic headwinds in the state.
The latest available demographic data indicates net interstate migration for Tasmania was minus 2,217 in the year to March. Even with overseas population offsetting outflows from the state, overall population growth is running well below the national rate, at 0.2 per cent in the past year (compared to 1.6 per cent nationally).
Ms Owen said there are broader structural challenges when it comes to the Tasmanian economy that have held back more robust population and income growth.
“Relatively low labour force participation rate, low jobs growth relative to other states and territories (averaging 1.8 per cent for the past five years compared to 3.2 per cent nationally), and relatively high levels of state government debt are creating a headwind for future economic investment.”
She did, however, identify some suburbs and areas that presenting investor and capital growth value into 2026 and beyond.
“I imagine the northern suburbs of Hobart would attract slightly stronger growth and investment than other parts of the city in 2026.
“The new Bridgewater Bridge completion is expected to improve travel times to the north, and could support demand for the suburb of Bridgewater itself, which is a relatively affordable market.
“As slow improvements in household finances and lower interest rates take effect, we could see some strength at the high end of the market again, and this was already somewhat evident in the south-west suburbs through the September quarter.”
