Holiday Home Hotspots in Tasmania



Tasmania is Australia’s smallest state, and as an island it is often not sheltered from economic fluctuations in the same way as mainland Australia.  Reliant heavily on tourism and exports, external factors can impact Tasmania’s economy quite significantly, with the strong Australian dollar currently having an impact on this sensitive state.

As a consequence, property prices in Tasmania are not expected to rise considerably in the near future, but this means there is opportunity for long-term investors to find good properties at last year’s prices. Keeping the market up in the Apple Isle are the many tree changers who are moving here from the mainland to take advantage of the relaxed way of life.  Tasmania is becoming a retirement destination of choice for many baby-boomers. On the other side of the equation, many of the younger generation are leaving for opportunities in bigger cities, which is having an adverse impact on rental vacancy rates. For the astute long-term investor though, there are some good opportunities for both capital growth and rental returns in this beautiful state.



With less than 250,000 residents, the capital city of Tasmania is like a large country town.  Hobart has experienced flat growth in the property market recently, and the subdued conditions are  expected to continue in the coming year.  This has also impacted rental rates, making this town good for picking up a quality property for a bargain, but you will need to do so with a long-term view to realise its investment potential.

With prices flattening, and in some suburbs declining, there are good opportunities to pick up bargains for savvy investors. A 3 bedroom house in West Hobart can be purchased for $240,000, with a wide range of properties available to suit most budgets. This suburb was also recently selected as one of the top 100 suburbs in Australia by a national real estate investment magazine for its cosmopolitan nature and growing rental demand.

The Tasmanian government has also recently announced a multi-million dollar residential development just north of Hobart CBD.  Located on the Claremont Peninsula, this is expected to be a significant infrastructure project that will include 75 new homes in five residential towers, along with hotels, a marina and golf course.

North West:

The North West coast of Tasmania is attractive for its easy proximity to Melbourne through the Spirit of Tasmania that docks in Devonport.  Other areas in the region include Ulverstone, Burnie and Smithton, where good quality property can be found with reasonable rental returns. A large family home can be purchased in Devonport for $250,000 and rented for about $150 per night, providing reasonable returns. For a beachfront house, you may need to spend at least $400,000 but the lifestyle and view will no doubt be worth it.

South East:

The Derwent River Valley is conveniently located less than an hour from Hobart, and has recently been considered as a region to watch in Tasmania.  Some towns such as New Norfolk are also proving to have strong rental returns.  A 3 bedroom home can be found for as low as $180,000 and with holiday home rentals from $150 per night, the potential returns are certainly attractive.  Capital growth is also expected in this region, with it experiencing modest growth in recent years, compared to the flat market experienced in nearby Hobart.

North East:

The North Coast of Tasmania is one of those spectacular places to spend some time. It is fast becoming the tourist destination of choice, with great fishing, swimming and beaches. The seaside town of St Helen’s is considered to be one of these potential boom towns. Properties in this region can be greater than $500,000 for a large beachfront home, or around $250,000 for a two bedroom unit. Holiday home rental returns vary accordingly from $110 per night for a 2 bedroom cottage, to over $500 per night for a luxury residence.

Significant investment in the North Eastern town of Musselroe Bay is also raising demand in the region, with a new wind farm to be completed there in the next couple of years and at least 200 new jobs created. It is another area that is worth considering for good potential rental returns.

Whilst Tasmania’s property market has had its challenges, this state still remains one of the most beautiful in Australia. The quality of life for those seeking a slower pace is hard to ignore, coupled with fresh produce and a stunning coastline.  Property is still also reasonably priced in Tasmania making it worth a look.  If you are not sure whether Tasmania is right for you, why not visit for a few weeks to experience it for yourself.  Our publisher has a variety of holiday homes available for rent in the region.

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