Buying an Investment Property in Hobart: What You Need to Know
Hobart has been one of Australia’s most intriguing property markets in recent years, with its combination of stunning landscapes, strong rental demand, and relative affordability compared to mainland capitals. Whether you’re a first-time investor or looking to expand your portfolio, buying an investment property in Hobart requires careful consideration.
In this guide, we’ll break down the essentials to look for when purchasing an investment property in Tasmania’s capital.
1. Location, Location, Location
Just like in any property market, location is key when investing in Hobart. The city has experienced consistent growth, but certain suburbs tend to outperform others.
Top Suburbs to Consider
- Inner-city (Battery Point, Sandy Bay, North Hobart) – Premium areas with strong demand, but higher entry prices.
- Growth corridors (Moonah, New Town, Lenah Valley) – More affordable, with strong rental appeal.
- Emerging suburbs (Glenorchy, Kingston, Claremont) – Increasing demand due to affordability and infrastructure investment.
When evaluating a suburb, consider factors like proximity to schools, public transport, amenities, and employment hubs.
2. Rental Demand & Yield
The strength of an investment property lies in its rental yield and demand. Hobart has experienced low vacancy rates, making it an attractive market for investors.
- Gross rental yield in Hobart is generally strong, with many suburbs achieving yields of 4-6% or more.
- Properties close to universities (e.g., in Sandy Bay near the University of Tasmania) or employment hubs tend to have more consistent rental demand.
- Short-term rental opportunities (like Airbnb) can also be lucrative, given Hobart’s strong tourism market—but be mindful of regulations.
3. Capital Growth Potential
If you’re looking for long-term capital appreciation, consider suburbs that have shown steady price growth over time. Factors influencing capital growth include:
- Infrastructure investment (new roads, schools, public transport improvements)
- Gentrification (areas undergoing transformation with new cafes, restaurants, and developments)
- Limited land supply (Hobart’s geography naturally restricts expansion, which can drive up prices)
Historically, suburbs like West Hobart, Mount Stuart, and Bellerive have performed well in terms of capital growth.
4. Property Type & Tenant Appeal
Not all properties make good investments. The type of property you buy should align with local demand.
What Tenants in Hobart Look For:
✔ Houses vs. Apartments – Houses generally attract families and offer stronger long-term growth, while apartments can be attractive to young professionals and students.
✔ Low-maintenance properties– Tenants prefer modern, well-maintained homes with minimal upkeep required.
✔ Parking & outdoor space – Many renters in Hobart prioritize off-street parking and outdoor living areas.
If you’re targeting families, look for 3-4 bedroom houses in suburbs with good schools. If you’re appealing to young professionals or students, apartments close to the CBD might be a better choice.
Tip: Look at the historical rental growth in the area to assess the potential for steady income.
5. Affordability & Budgeting
Hobart’s property prices, while rising, are still more affordable compared to Melbourne and Sydney. However, you should factor in all costs before purchasing:
- Stamp duty (check the TAS government’s calculator here)
- Property management fees chat to our team today regarding our management fees)
- Council and water rates
- Insurance, including landlord's insurance
- Maintenance & potential renovations
- Always get pre-approved finance and ensure you’re not overleveraging.
Tip: Consult a financial advisor or mortgage broker to find the best loan structure for your goals.
Tip: Always budget for unexpected repairs to avoid financial stress.
6. Short-Term vs. Long-Term Investment Goals
Hobart’s investment opportunities vary depending on your timeline and strategy.
Long-term investors: Should focus on properties with strong capital growth potential and stable rental demand.
Short-term investors: May consider short-stay accommodation (e.g., Airbnb) to capitalize on Hobart’s tourism industry, but must comply with local regulations.
Tip: Ensure your investment aligns with your financial goals and risk tolerance.
7. Property Management & Maintenance
If you’re not planning to self-manage, choosing the right property manager is essential. A good property manager can:
✔ Screen tenants effectively
✔ Handle maintenance requests
✔ Ensure compliance with tenancy laws
Final Thoughts
Hobart’s property market offers strong rental yields, steady capital growth, and long-term investment potential. However, success depends on choosing the right location, property type, and investment strategy. Before making a decision, do your research, crunch the numbers, and seek expert advice if needed. Whether you’re aiming for rental income, capital growth, or a mix of both, a well-planned investment in Hobart could be a great addition to your portfolio.
Thinking of investing in Hobart? Let’s chat contact our Property Investment Advisors today!