Confidence returns to Tasmania’s property market – John McGrath

Hobart’s property market, along with those of Launceston and Devonport, should finally experience some real recovery in 2026, following three difficult years. This recovery first began in 2025 and although moderate, will grow stronger this year, as confidence returns to the Apple Isle’s overall economy.

We take a good look at the positive details shaping Tasmania’s property market in our McGrath Report 2026. For example, also helping the state’s three largest metropolitan property markets is a notable tourism rebound and good public sector investment.

At the same time, Hobart still has some way to go to recover from its March 2022 peak, when median dwelling values reached $731,849 according to then CoreLogic’s Hedonic Home Value Index. This was largely due to a surge in interstate migration, especially from Melbourne.

Yet three years on, and Hobart’s property market is moving forward. Cotality’s first Home Value Index report for 2026 notes the capital city’s median house value is now $768,375 with apartments selling for a median of $566,069. This follows annual uplifts of 6.8% and 6.7% respectively. This is a far cry from Cotality’s December 2024 HVI report when the city’s median values dropped 0.5% to $651,043.

The city’s many new investors pocket gross rental yields of 4.3% for their new dwellings, after house rental prices rose 6.7% across the past year – the second highest capital city increase in the country after Darwin. Apartment rents’ 9.3% upward shift topped even Darwin to become the top figure in Australia.

It's true that Tasmania’s property values are still resulting in affordability challenges. But in good news for Hobart’s property market, dwelling values are low by national standards, so there’s a window of opportunity for buyers. The 1.7% increase in first home buyer loan commitments in the September 2025 quarter was the highest in the country, based on the Real Estate Institute of Australia’s Housing Affordability Report for this period.

Taking a closer look at what’s driving this upward shift, Tasmania continues to punch above its weight on key economic indicators such as employment. CommSec’s October 2025 State of the States report shows the Apple Isle has the strongest employment sector in the country when compared to the average decade level, with a jobless rate of 4% in September 2025. Tasmania also has the second highest job growth rate, after South Australia.

Record-breaking visitor numbers boosted the state’s economy in 2025, with Tourism Tasmania noting that in the year to September, visitor numbers to the Apple Isle were up 4.1% to 1.36 million – the first time they had surpassed pre-COVID levels.

Importantly, there’s the state’s investment in major infrastructure. Tasmania’s biggest transport infrastructure project, the $786 million Bridgewater Bridge in Hobart, opened in June 2025. Hobart Airport’s $200 million terminal expansion project is underway, with completion expected next year.

Hobart’s new Macquarie Point Stadium was also given the green light last month, with the 23,000-seat, multi-purpose setting to be the home of the state’s new AFL and cricket teams. It will also host major sporting and entertainment events. Work on the $1.13 billion stadium will begin this year with plans for it to open in 2029.

Infrastructure activity is also strong in Launceston and Devonport. In Launceston, the historic Albert Hall received a $20 million redevelopment in 2025. A $130 million redevelopment of the University of Tasmania (UTAS) Stadium began in September and, the relocation of the UTAS Newnham campus to Inveresk in 2023 and 2024 was the largest infrastructure project in Launceston’s history.

In Devonport, the city’s port is undergoing a major redevelopment, mainly to accommodate two new, larger Spirit of Tasmania vessels, in time for the 2026-27 summer season.

Launceston and Devonport are proving more accessible than Hobart for their lower property prices. Cotality’s Regional Market Update report in November 2025, which honed in on the country’s 50 largest non-capital areas, showed Launceston’s median dwelling value is now $581,091, after a 4.5% annual uplift. In Devonport, property values are standing at $505,670, following a 6.2% yearly change.

Check out my top suburb picks in Hobart, Launceston, and Devonport here.