---
title: "I Studied 13 Quarters of Tasmanian Data. The Population Numbers Are Brutal."
description: "13 consecutive quarters of working-age population loss in Tasmania. Hobart GDP trails the state average. Here's why your $500K Tassie investment won't double in 7 years."
author: Joey Don
date: 2024-10-07
category: Market Analysis
url: https://premiumrea.com.au/blog/tasmania-hobart-launceston-population-trap
tags: ["Tasmania", "Hobart", "Launceston", "population decline", "market analysis", "Melbourne", "regional property"]
---

# I Studied 13 Quarters of Tasmanian Data. The Population Numbers Are Brutal.

*By Joey Don, Co-Founder & CEO at PremiumRea — 2024-10-07*

> Everyone who got their green card through Tasmania left for Melbourne or Sydney. I know a hundred people who moved back to Melbourne from Tassie. I don't know a single person who went the other direction.

I'm going to ruffle some feathers with this one. Actually, scratch that — I'm going to set them on fire.

Tasmania will not double your money in seven years. Hobart won't. Launceston won't. And if you're buying a $500,000 house down there thinking you're getting early access to the next big thing, you need to see the data I'm about to show you.

Look, Tassie will go up. It's still Australia. But "going up" and "doubling" are very different conversations, and the numbers behind the hype are about as encouraging as a dentist appointment on a Monday morning.

## The population story nobody wants to tell you

Pull up the Tasmanian Bureau of Statistics population projections. It's genuinely grim reading.

Between 2016 and 2023, almost all of Tasmania's population growth came from overseas migration. Not organic growth, not interstate migration — people arriving on visas, collecting their permanent residency through the state-nominated pathway, and then doing exactly what any rational human being would do: they left for Sydney or Melbourne.

I personally know over a hundred people who moved from Tasmania back to Melbourne after getting their PR. I can't name a single person who went the other way. Zero. Not one.

The ABS data shows it plainly. Between 2005 and 2015, Tasmania had meaningful natural population increase — babies being born, families putting down roots. After 2015, that tapered off significantly. The local-born population started shrinking while the transient visa-holder population filled the statistical gap [1].

Here's the part that should worry anyone holding Tasmanian real estate. The state's own population projections — the official ones, published by the Tasmanian Government — show a yellow dashed line trending downwards. Under certain scenarios, Tasmania's future population could actually be lower than it is today [2]. Let that sit with you for a moment. Fewer people. More empty houses. In what universe does that produce a property price doubling?

## The ageing problem compounds everything

The third chart from the Tasmanian population report is where it gets properly uncomfortable.

Regardless of which projection scenario you pick — optimistic, moderate, or pessimistic — Tasmania faces severe ageing. The 30-to-45 age bracket, the one that actually buys houses and starts families, has been contracting for 13 consecutive quarters [3]. That's three-plus years of your core buyer demographic walking out the door.

An ageing population doesn't just mean fewer property buyers. It means lower wages growth, reduced consumer spending, smaller tax bases for councils, and declining demand for the kind of housing that investors typically buy. When the median age of a state keeps climbing and the young professionals keep leaving, you're not looking at a growth story. You're looking at a slow deflation.

Would I live there? Honestly? No. And I'd wager most people reading this wouldn't either. That's the problem. If you wouldn't move there, why would you bet your capital on other people wanting to?

## Hobart's economy is dragging the state backwards

Now let's look at the economic data, because this is where the Hobart boosters really don't want you to look.

Tasmania as a state actually had a decent economic recovery post-COVID. In 2022, the state's Gross Regional Product (GRP) grew by 4.45% year-on-year. Not spectacular, but positive. The problem? Hobart — its capital and largest city — posted negative growth that same year [4].

Read that again. The state's biggest city, the one everyone's supposedly rushing to invest in, actually went backwards while the rest of Tasmania inched forward. And in the years since, Hobart's growth has consistently underperformed the statewide average.

Launceston isn't much better. In only one year out of the last four did Launceston's growth rate exceed Tasmania's overall figure [4]. For the remaining three years, it was dead weight.

So the irony is thick: if you're going to invest in Tasmania for economic growth reasons, you'd theoretically want to avoid both major cities. Which rather defeats the purpose, doesn't it?

## Victoria produces 14 Tasmanias

I live in Victoria. Everyone loves to moan about Victoria's fiscal management, the debt levels, the land tax. Fair enough — there's plenty to complain about.

But explain this to me: Victoria's economic output is roughly 14 times Tasmania's total GDP [5]. Victoria's three-year GDP growth increment alone exceeds Tasmania's entire accumulated economic output over a century. That's not a typo, and it's not a rounding error.

So when someone tells me they're taking $600,000 out of Melbourne's southeast corridor — where vacancy rates sit below 1.5%, where I can get $850 a week rent after a $13,000 cosmetic renovation, where the land value alone accounts for 80% of the purchase price — and they want to put that $600,000 into a Tasmanian house instead? I genuinely struggle to keep a straight face.

At our firm, we only buy properties where land value exceeds 80% of the total price. That's the "buy land, get the house free" principle. In Melbourne's southeast, a $600,000-$800,000 purchase on a 600-square-metre block in Hampton Park or Cranbourne gives you exactly that — the land is worth $500,000 to $650,000, and the house is the free bonus.

In Tasmania, $500,000 buys you a mid-range house where the building component is a much larger share of the total price. The land doesn't have the same scarcity premium. There's no 40-person queue at the rental inspection. The numbers just don't compare.

## Rental yields have a low ceiling

Tasmania has the lowest average wages of any state in Australia [6]. That's not a temporary blip — it's been that way for decades.

Low wages mean low rent ceilings. You might get a decent yield percentage on paper because the purchase price is low, but the actual dollar amount of rent is constrained by what local workers can pay. When your tenant pool earns $15,000-$20,000 less per year than their Melbourne counterpart, your ability to push rents up over time is severely limited.

And here's the supply-side kicker. SQM Research projects approximately 18,000 new dwellings completing in Tasmania through 2026 [7]. For a state with a population of roughly 570,000, that's a massive influx of new stock relative to demand. New supply competes directly with existing stock, putting downward pressure on both rents and capital values.

Compare that to Melbourne's established southeast suburbs, where Council NIMBYism, construction cost blowouts, and the physical impossibility of creating new land in built-up areas means supply stays permanently tight. In Hampton Park, vacancy hasn't breached 2% since before COVID. In Tasmania, the buffer between supply and demand is paper-thin.

## Infrastructure spending is an aspirin, not a cure

The Tassie bulls love talking about the new stadium. Macquarie Point Stadium in Hobart — budgeted at $715 million, likely to cost more — is apparently going to transform the city. There's also the $200 million airport terminal expansion and the $130 million runway upgrade [8].

These are large numbers for a small state. But a stadium doesn't create thousands of permanent high-income households. An airport expansion increases throughput, sure, but if there aren't enough high-paying industries locally — tech, finance, advanced healthcare — the people landing at that airport are tourists who stay a week and leave.

It's like giving a blood-pressure tablet to someone who needs heart surgery. Looks like you're doing something. Doesn't fix the structural problem.

Now contrast that with Frankston, in Melbourne's southeast. The $1 billion Frankston Hospital expansion isn't a vanity project — it's a permanent employment engine. Thousands of doctors, nurses, anaesthetists, and allied health workers will need to live nearby. Medical professionals earn $80,000 to $250,000 a year. They need rental housing, they send their kids to local schools, they spend money at local shops. That's a catalytic investment — one that permanently raises the income profile and housing demand of an entire corridor [9].

Both projects involve roughly a billion dollars. But for Victoria, that's a rounding error. For Tasmania, it's a state-defining bet. And Tasmania bet on a stadium.

## So what should you actually do with $500K?

If your budget is $500,000 and you're thinking Tasmania, I'd push back hard.

At that price point, you can buy in Geelong's northern suburbs — Corio, Norlane — and get 500-plus square metres of land with an existing house. After a $5,000-$10,000 cosmetic touch-up, rents hit $600 a week. That's a rental yield approaching 6%, in a city that professional forecasters have identified as one of the top ten beneficiaries of rate cuts nationally [10].

Or you can stretch slightly further into Ballarat or Bendigo. Same budget, same large-block strategy, with rental yields of 5-6% and vacancy rates below 2%.

These Victorian regional centres have one thing Tasmania doesn't: proximity to Melbourne. They're within 90 minutes of a city with 5 million people and a $450 billion economy. Workers commute from Geelong and Ballarat into Melbourne daily. The demand pipeline isn't reliant on visa-hoppers or holiday-makers — it's driven by permanent residents who work in the state capital.

"I buy where the renters have jobs and the land has scarcity," I tell every client who walks through the door. "Tasmania ticks one of those boxes. Melbourne ticks both."

## Will Tassie go up? Probably. Will it double? I'd bet against it.

I want to be clear: I'm not saying Tasmania is a total write-off. If you bought three years ago at $350K and it's now worth $420K, good for you. Property across Australia trends upwards over long enough time horizons because of inflation and population growth at the national level.

But "going up" and "delivering the kind of returns that justify locking up half a million dollars for a decade" are two fundamentally different propositions. When I see 13 quarters of working-age population decline, a capital city underperforming its own state, the lowest wages in the country, and an incoming wave of new housing supply, I see an asset class that might give you 3-4% annualised growth rather than the 8-10% you'd get in a properly selected Melbourne suburb.

Over ten years, that difference compounds into hundreds of thousands of dollars.

My advice? Let the Tassie romantics have their sea-change dream. Take your $500K, put it into a 600-square-metre block in Melbourne's southeast or a high-yield regional Victorian town, and let the structural undersupply and wage growth do the heavy lifting.

The numbers don't lie. But they do require you to actually read them.

## References

1. [Australian Bureau of Statistics, 'Regional Population, 2022-23'. Interstate and overseas migration flows by state.](https://www.abs.gov.au/statistics/people/population/regional-population/latest-release)
2. [Tasmanian Government, Department of Treasury and Finance, 'Population Projections'. Three-scenario population outlook.](https://www.treasury.tas.gov.au/economy/economic-data/population-projections)
3. [Australian Bureau of Statistics, 'National, state and territory population, June 2022'. Age-cohort analysis.](https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/jun-2022)
4. [National Institute of Economic and Industry Research, 'Gross Regional Product tables by LGA, 2022'. Hobart and Launceston GRP growth comparisons.](https://economy.id.com.au/)
5. [Australian Bureau of Statistics, 'Australian National Accounts: State Accounts, 2021-22'. Victoria vs Tasmania gross state product.](https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-state-accounts/latest-release)
6. [Australian Bureau of Statistics, 'Average Weekly Earnings, Australia, May 2022'. State-by-state wage comparison.](https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia/may-2022)
7. [SQM Research, 'Housing Construction Pipeline by State, 2022'. Projected dwelling completions in Tasmania.](https://sqmresearch.com.au/)
8. [Tasmanian Government, 'Major Infrastructure Projects 2022'. Macquarie Point Stadium, Hobart Airport expansion.](https://www.stategrowth.tas.gov.au/)
9. [Victorian Government, 'Frankston Hospital Redevelopment — Project Overview'. $1.1 billion health infrastructure investment.](https://www.vhba.vic.gov.au/health-infrastructure/frankston-hospital)
10. [SQM Research, 'Regional Residential Vacancy Rates, 2022'. Geelong and Ballarat sub-2% vacancy data.](https://sqmresearch.com.au/graph_vacancy.php?region=vic&type=c&t=1)

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Source: https://premiumrea.com.au/blog/tasmania-hobart-launceston-population-trap
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent