Hobart and Tasmanian Property Market Outlook for 2026

As we head into 2026, economists indicate that Tasmania’s property market is being shaped by a mix of ongoing inflation, steady price growth and changing lending conditions. Hobart in particular is showing signs of renewed momentum after a quieter period, but the path forward is likely to be more "measured than dramatic".

Inflation and Interest Rates

The Reserve Bank of Australia has reported that inflation is "proving stubborn". In its November Statement on Monetary Policy, the RBA reported that inflation is predicted to remain above its 2 to 3 per cent target range until at least mid-2026.

Because inflation is not yet trending down, the likelihood of interest rate cuts has reduced. This means borrowers will see interest rates staying relatively high for longer than we have hoped for.

At this stage, most forecasts suggest interest rates are more likely to stay on hold through much of 2026. Some economists believe there could be one or two modest rate rises if inflation worsens, while others expect rates to remain steady unless there is a major economic shift.

For the Hobart market, this creates a balancing act. Potential higher borrowing costs can limit how much buyers can spend, but they also reduce the risk of a sudden price surge or sharp correction.

National Property Growth and Hobart’s Performance

Nationally, property prices are climbing again. Home values across Australia rose by around 6.1 per cent over the past year, pointing to a renewed growth phase.

Hobart has also returned to growth, although at a slower pace than some mainland capitals. Over the past year, Hobart dwelling values have increased by around 4 to 5 per cent, with some suburbs showing stronger growth than others.

Hobart is still relative affordable compared to larger cities and therefore does continue to attract interest, particularly from buyers seeking lifestyle and long-term value.

What Are Property Prices Expected to Do in 2026?

Looking ahead to 2026, most forecasts point to continued growth in Hobart and across Tasmania, but at a moderate and sustainable pace.

Major banks are generally forecasting price growth in Hobart of around 2 to 4 per cent over the year. Some more optimistic scenarios suggest prices could rise further if borrowing conditions ease and buyer confidence improves, although this is not the expectation.

Low housing supply, ongoing demand and strong rental conditions are all supporting prices. At the same time, affordability constraints and interest rate uncertainty are likely to keep growth in check.

What This Means for Buyers and Investors

For buyers, the current market still offers opportunity, but choice and timing matter more than they did a year ago. Competition is increasing, yet price growth remains steady rather than "overheated".

For investors, Hobart continues to benefit from strong rental demand and limited supply. While capital growth may be slower than in some mainland markets, consistent rental returns and long-term stability are still very appealing with buyers.

The Hobart and Tasmanian property markets are moving into 2026 with positive momentum, but without the extremes seen in previous boom cycles. Growth is happening, but it is more considered, shaped by inflation pressures and cautious lending conditions.