Nuestar founder Michael Wilkins said Hobart city apartment rents have grown by 18 per cent in one year. Picture: Supplied
A spotlight has been shone on five Tassie hotspots where rents have grown by double-digits.
Over the 12 months to April, three Hobart suburbs and two regional areas recorded huge rental price growth led by Hobart city.
The Hotspotting and Nuestar report, The Rise and Rise of Apartments, showed an 18 per cent increase in Hobart rents in the year to April.
Blackmans Bay was up 12 per cent and New Town climbed 10 per cent higher.
Up north, Newnham rents pushed 15 per cent higher and in Legana they were up by 10 per cent.
With a shortage of supply and continuing low vacancy rates, apartment rent growth is expected to remain strong over the first half of 2026, the report said.
However, it noted that Hobart and Canberra were the only capital city markets where median house rents increased at a faster rate than median apartment rents.
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Queen’s Walk apartments, Hobart. Picture: Supplied.
Luxury apartments at the Ingomar in Patrick St, Hobart.
In greater Hobart, the median apartment rent is $517 per week, while houses are $629. Both were the cheapest among the capital city markets.
The annual rental change for apartments was a 3.9 per cent increase, while houses grew by 7.1 per cent.
Hotspotting founder Terry Ryder said rising rents and more affordable buy-in prices than the house market meant stronger returns for investors in the apartment market.
He also said that with the changes to allow future negative gearing only for new builds, apartment assets would be more in demand.
“As a result of the Budget changes, yields will become a higher priority for many investors and as this report shows, the higher yields are to be found in the apartment market,” Mr Ryder said.
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Hotspotting founder and property analyst Terry Ryder.
FOUR31 Elizabeth St, North Hobart. Picture: Chris Kidd
Real Estate Institute of Tasmania president Russell Yaxley said when a suburb’s rent increases by a double-digit percentage — like in Hobart and Blackmans Bay — that is a sign of rising demand.
Mr Yaxley said Hobart needs to increase this type of housing.
“Across Hobart we need to consider apartments, units, and townhouses more seriously as attractive housing options as they can be well suited to a range of buyers,” he said.
“It would be great in the near future to see apartments as the norm rather than not.
“Seeing a few new projects get out of the ground would create some momentum.”
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Real Estate Institute of Tasmania president Russell Yaxley. Picture: Supplied
Artist impression of the Macquarie Place apartments that were axed due to the cost of construction. Site is now a BYD car dealership.
Nuestar founder Michael Wilkins said apartments are not just an affordability play.
“In the right locations, they are a way to secure exposure to high-quality, high-demand markets earlier and at a lower entry point than houses,” he said.
The research found that across the greater capital city markets, there were 162 apartment markets with yields of 5 per cent or more compared to just 11 house markets.
Brighton was Hobart’s standout performer with a 5.5 per cent yield.
“The apartment market is gaining strength as a force for property investment and will continue to do so,” Mr Wilkins said.
New REIT figures show rents have increased by $40 per week in Hobart over the past year, $100 per week in Launceston and $50 per week on the North West Coast.
Vacancy rates have decreased from 1.9 per cent to 1.2 per cent in Hobart.
Last week, research by FoundIt forecast an increase in greater Hobart rents of $10-$13 per week within three months.
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