South Hobart

Opportunities in a changing market.

By Paul Reed Sales Executive, T.G. Newton

As we approach the second quarter of 2025, Hobart's real estate market is poised for notable developments influenced by a combination of economic indicators, housing policies, and demographic trends.

Economic Indicators

Tasmania's economy is projected to grow by 1.5% in the 2024-25 fiscal year, reflecting a steady economic environment conducive to property market stability. However, challenges such as high electricity costs continue to affect residents, with reports indicating that one in five Tasmanian households struggle to afford their electricity bills.

Additionally, the Nyrstar Hobart zinc smelter plans to reduce production by 25% starting in April, raising concerns about potential impacts on local employment and economic activity

Hobart Property Investment Outlook 2025

Hobart’s property market in 2025 is expected to see steady demand, supported by population growth, infrastructure projects, and a tightening rental market. With vacancy rates remaining low and rental prices continuing to rise, investors may find strong yields, particularly in high-demand areas. Limited new housing supply is also likely to drive competition for quality properties

However, challenges such as rising living costs and economic uncertainty, including energy prices and industry shifts, could impact affordability and buyer sentiment Investors should focus on well-located properties with strong rental appeal to capitalize on market resilience

Housing Supply and Demand

The housing crisis in Tasmania has intensified, with the social housing waitlist growing and rents increasing significantly The Tenants' Union reports that nearly five people are added to the waitlist each week, highlighting the pressing need for affordable housing solutions Despite government initiatives to build more homes, progress has been slow, exacerbating the supply-demand imbalance Market Forecast

After a period of stagnation, Hobart's property market is expected to experience renewed growth. KPMG's latest Residential Property Market Outlook report forecasts a 5.7% increase in house prices and a 5.3% rise in unit prices for Hobart in 2025. This anticipated growth is attributed to factors such as population increases, economic stability, and ongoing infrastructure projects. Rental Market

The rental market in Hobart remains tight, with low vacancy rates and rising rents indicating strong demand for housing. This trend presents opportunities for investors but poses challenges for tenants seeking affordable accommodation

Infrastructure Developments

Significant infrastructure projects, including the Macquarie Point Waterfront/Hobart Railyard Redevelopment ($300 million) and the Macquarie Wharf Redevelopment ($240 million), are set to reshape Hobart's waterfront These developments are expected to enhance the city's appeal and stimulate economic activity, potentially influencing property values in surrounding areas

Conclusion

Hobart's real estate market in the upcoming quarter is characterised by a blend of opportunities and challenges. While economic growth and infrastructure projects provide a positive outlook, issues such as housing affordability, energy costs, and industrial uncertainties necessitate careful consideration by investors and policymakers alike.

Sandy Bay IN REVIEW

Sandy Bay’s real estate market has maintained its reputation as one of Hobart’s most desirable and resilient property sectors Buyer demand remains strong, particularly for well-appointed family homes and premium waterfront properties, despite broader economic headwinds

Inventory remains tight, with limited highquality stock coming to market, which has helped sustain property values Downsizers and interstate buyers continue to drive competition, particularly in the $1.5M+ price bracket. Apartments and townhouses are also seeing increased interest, reflecting a shift towards low-maintenance, high-end living. Looking ahead, the market’s stability will depend on interest rate trends and broader economic conditions, but for now, Sandy Bay remains a blue-chip enclave with enduring appeal.

Highlight

Capturing a spectacular outlook of Hobart City, this grand residence offers spacious elevation showcasing world-class views of the Tasman Bridge - with its stunning floor-to-ceiling windows positioned to enhance the unobstructed city & harbor vista