House values in Hobart have experienced substantial growth, particularly in eight suburbs, driven by factors such as affordability and recent interest rate cuts. According to data from PropTrack, Kingston Beach emerged as the standout performer, with a remarkable 32 percent increase in median sale price over the past year, bringing the typical price of a home in this area to $1.125 million. This makes Kingston Beach the only suburb in Tasmania among the top performers with a median price exceeding $1 million.
Following Kingston Beach, the northern suburb of Berriedale recorded a 20 percent increase during the interest rate-cutting cycle of 2025. Chigwell was noted for a 15 percent rise, while Mornington and Bridgewater saw growths of 14 percent and 12 percent, respectively. In the units market, Glenorchy topped the list with a median sale price increase of 12 percent, reaching $495,000, while Bellerive’s units also saw a healthy 11 percent increase to $630,000.
The Reserve Bank of Australia cut interest rates three times last year, which significantly impacted borrowing capacity and home prices. Angus Moore, executive manager of economics at REA Group, emphasized that while lower interest rates were a critical factor, affordability constraints, market momentum, and investor activity also played significant roles in driving prices upward. “What people can afford, which is a function of interest rates and incomes, is the key driver of home prices,” Moore stated.
Hobart’s top-performing suburbs predominantly consist of areas with median prices lower than the greater Hobart median. Moore noted that the trend indicates that more affordable homes are outperforming others in the current market. Russell Yaxley, president of the Real Estate Institute of Tasmania, highlighted that certain suburbs will always excel due to various factors including affordability, supply, and local amenities. He remarked, “It doesn’t surprise me that many of the strongest suburbs sit below the greater Hobart median, because affordability really matters in Tasmania right now.”
The demand for housing in Tasmania remains robust, fueled by individuals relocating for lifestyle and employment opportunities. Yaxley pointed out that first-time homebuyers currently have a favorable opportunity to enter the market, aided by various incentives. Investors are also active, especially in suburbs with attractive rental returns and low vacancy rates.
At a national level, data indicates that buyers are upgrading relatively quickly in areas where prices have risen sharply. Moore observed a significant increase in low loan-to-value ratio (LVR) borrowing, suggesting that many are upgrading homes with considerable equity. “Areas that have seen strong price growth have also seen a higher share of people selling relatively quickly, which could be consistent with people upgrading sooner than they had planned to,” he added.
Meanwhile, PropTrack’s latest Home Price Index indicates that regional Tasmania has reached its highest median home price on record. Hobart is approaching this milestone, being just 0.2 percent shy of its peak.
The following table summarizes the price growth for houses in Hobart’s top suburbs during the recent interest rate cut cycle:
Price Growth in Hobart’s Top Suburbs
| Suburb | Median Price | Annual Growth |
|---|---|---|
| Kingston Beach | $1,125,000 | 32% |
| Berriedale | $650,000 | 20% |
| Chigwell | $550,000 | 15% |
| Mornington | $630,000 | 14% |
| Bridgewater | $470,000 | 12% |
| Howrah | $808,000 | 11% |
| Austins Ferry | $670,000 | 11% |
| Claremont | $580,000 | 10% |
| Margate | $866,000 | 9% |
| Sorell | $720,000 | 9% |
As the housing market in Hobart continues to thrive, the interplay of affordability and demand will likely shape its future trajectory.
