Why Hobart Is Still a Smart Choice for Property Investment in 2025
Why Hobart Is Still a Smart Choice for Property Investment in 2025
Despite rising interest rates and shifting national trends, Hobart continues to attract savvy property investors in 2025. With strong rental demand, low vacancy rates, and consistent capital growth in key suburbs, the Tasmanian capital remains one of Australia’s most resilient investment markets.
Key Reasons to Invest in Hobart
1. Consistent Rental Demand
Hobart’s rental vacancy rate remains under 1%, among the lowest in the country. With limited housing supply and a growing population, demand for quality rentals continues to outstrip supply — keeping rental yields healthy and vacancy periods short.
2. High Gross Yields
In many suburbs, rental yields sit between 4.5%–5.5% for houses and can exceed 6% for units, well above national averages. This makes Hobart particularly appealing to yield-focused investors.
3. Relative Affordability
Compared to major cities like Sydney or Melbourne, Hobart offers a lower entry price point. The median house price (May 2025) is around $695,000, making it accessible for investors seeking positive cash flow or portfolio diversification.
4. Tight Market Conditions
Stock levels remain low in most areas, keeping prices stable even during slower national periods. Properties in well-positioned suburbs (like Moonah, Kingston, and Glenorchy) are moving quickly and attracting strong tenant interest.
5. Government Infrastructure Spending
Major investment in roads, public transport, and hospital upgrades is driving confidence. Areas close to these developments are expected to see further value increases over the next 3–5 years.
Top Suburbs for Investment in 2025
• Moonah: Strong rental returns, close to CBD, gentrifying rapidly
• Glenorchy: Affordable entry point, high rental demand, good growth trajectory
• Kingston: Consistent population growth and infrastructure development
• Claremont: Family-focused suburb with solid yields and good value potential
• New Norfolk: Emerging region with rural charm, offering affordability and yield
Investor Tip: Look Beyond the Headlines
While national headlines talk of market cooling, local conditions in Hobart remain fundamentally strong. It’s a classic case of micro-market dynamics — and investors who understand the local demand/supply balance are positioning themselves for long-term success.
What to Watch
• Interest rates: Further RBA moves may impact borrowing capacity, but demand from cash-ready investors remains strong.
• Rental legislation changes: Stay informed on tenancy laws in Tasmania to ensure compliance and avoid surprises.
• Dual occupancy and development potential: More investors are exploring subdivision or secondary dwelling opportunities to boost returns.
Final Word
If you’re looking for an investment market that offers strong returns, low vacancy, and long-term capital potential, Hobart continues to deliver in 2025. The key? Partnering with a local expert who understands the suburb-level opportunities and risks.
You can use the Loan Market Burrowing Calculator to see how much you can burrow here!
Thinking about investing in Hobart? I work with buyers and investors across Tasmania to help you find the right property, in the right location, at the right price. Reach out today!
Click Here!
