Hobart Housing Crisis Drives Property Prices Up Across Tasmania

Tasmania's housing market has undergone a seismic transformation in the past five years, with data now painting a stark picture of affordability collapse and urban planning challenges that extend far beyond Hobart's overheated property market.

Recent figures from the Real Estate Institute of Tasmania show median house prices across Greater Hobart have climbed to $745,000-a 67 per cent increase since 2021. In sought-after inner suburbs like South Hobart and Glebe, median values now exceed $1.1 million, pricing out first-home buyers who comprise just 18 per cent of purchasers, down from 32 per cent a decade ago.

The rental market tells an equally troubling story. The Tasmanian Housing Affordability Report, released by the Community Legal Centre in May, found median weekly rents in Hobart CBD and surrounding areas have increased 41 per cent since 2019. A two-bedroom apartment in Southbank now commands $480 weekly-beyond reach for 62 per cent of Tasmanian renters, according to state welfare agency data.

Yet urban planning approvals reveal a perplexing paradox. Development applications lodged with Hobart City Council show 340 new residential units approved in 2025, yet only 156 were completed. Department of State Growth figures indicate that across Greater Hobart, 28 per cent of approved developments remain stalled, many citing financing constraints and construction cost inflation exceeding 35 per cent since 2021.

Launceston and regional centres are experiencing secondary waves. Greater Launceston's median house price sits at $485,000-still affordable by southern standards-but has grown 44 per cent since 2021. Rental vacancy rates across regional Tasmania average 1.2 per cent, critically low by any measure.

The State Government's planning reforms, introduced in 2024, aimed to streamline approvals in urban renewal zones spanning North Hobart, West Hobart and parts of the Eastern Shore. Yet data suggests mixed results: applications processed 23 per cent faster on average, but actual construction commencement has lagged 18 months behind approval timelines.

Population growth-Tasmania added 18,500 residents in 2025 alone-continues outpacing housing supply. Demographer projections suggest the state needs 4,200 additional dwellings annually through 2031 to meet demand. Current completion rates sit at 2,900 annually.

Urban planners and housing advocates are now scrutinising whether current zoning frameworks can deliver. The numbers suggest Tasmania faces a critical window: accelerate supply soon, or watch affordability deteriorate further across the state's cities.

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