Greater Hobart\u2019s chronic shortage of affordable housing continues to act as a handbrake on growth, even as its economy begins to stabilise after a difficult two years, new KPMG research has revealed.<\/p>\n
And while the Enterprising Cities 2026 report points to a pipeline of future construction work at major hospital, airport, and stadium projects, KPMG Tasmanian chairman David Harradine said the capital\u2019s traditional affordability advantage over the mainland was rapidly disappearing.<\/p>\n
\u201cJust seven years ago, Hobart\u2019s house prices were 32 per cent cheaper than Melbourne\u2019s, but by the end of last year, that gap had narrowed significantly to just 14 per cent,\u201d Mr Harradine said.<\/p>\n
\u201cHobart has a lot to offer new residents, but if they cannot find somewhere to live that\u2019s affordable, they will simply look elsewhere.<\/p>\n
The consultancy giant\u2019s third annual study of Greater Hobart \u2013 comprising Hobart, Glenorchy, Kingborough, and Clarence local government areas \u2013 also showed the region\u2019s 3.9 dwelling approvals per 1000 residents were well below the national average of 7.0, with the 7000 new jobs forecast for the next five years down on a previous forecast of 10,000.<\/p>\n
Terry Rawnsley, a KPMG urban economist who led the report, said the city\u2019s pandemic-era boom, fuelled by an influx of interstate workers chasing lifestyle and affordability, had clearly run its course.<\/p>\n
Employment growth has fallen since its 2021 peak, unemployment has climbed to almost 5 per cent by the end of 2025, and population growth has increased by just 0.2 per cent each year since 2023, Mr Rawnsley said.<\/p>\n
\u201cHomeowners used to be able to cash out of Melbourne, move to Hobart, and pocket a couple hundred grand, but now you\u2019re struggling to find that happening,\u201d he told the Mercury.<\/p>\n
\u201cLocal businesses are still placing job ads to find boilermakers, nurses, and accountants.<\/p>\n
\u201cAnd while people might be interested in the job, they are saying \u2018I\u2019m looking at Hobart\u2019s housing and the vacancy rate is 0.5 per cent\u2019 or \u2018the rents are too high for me\u2019.<\/p>\n
\u201cFor a long time, Hobart has relied on the northern growth corridor for new housing, and that\u2019s still an important part of the story, but there\u2019s also sort of a need for more medium-density housing scattered around the city.\u201d<\/p>\n
The KPMG report – which drew on national labour force data, building approvals, population and business information \u2013 also contained positives for the Greater Hobart economy, with the number of businesses turning over more than $10 million rising from 238 to 244, and a modest 0.8 per cent uptick in employment growth in 2025.<\/p>\n
Mr Rawnsley said despite the Tasmanian capital\u2019s mixed report card, he was confident its economy could thrive if current housing challenges were properly addressed. <\/p>\n
\u201cIt is probably still going to be a bit of a grind over the next couple of years, but I think fundamentally there\u2019s still enough strengths about Hobart to keep ticking along if we get homes for people to live in,\u201d he said.<\/p>\n
\u201cHobart already has the capability to support large businesses and lifestyle benefits that can attract skilled workers.<\/p>\n
\u201cAffordable housing is the missing piece that is needed to reinvigorate the economy.\u201d<\/p>\n
Greater Hobart 2025 economic snapshot<\/p>\n
Workforce participation rate 63.7 per cent<\/p>\n
131,000 workers (employment growth of 0.8 per cent)<\/p>\n
255,500 total population (growth of 0.2 per cent)<\/p>\n
Dwelling approvals: 990<\/p>\n