Hundreds of new homes could be unlocked across Hobart’s inner city under a new City of Hobart incentive aimed at turning long approved housing projects into real construction activity.
The Hobart Inner City Housing Supply Incentive Policy is designed to tackle one of the city’s most persistent housing challenges — the growing gap between developments that have planning approval and those that actually proceed to being built.
Around 900 dwellings approved in Hobart have yet to move beyond the planning stage.
The policy targets multi‑dwelling developments of five or more homes, as well as projects that convert upper floors of existing buildings into residential use, across central Hobart, North Hobart and the waterfront.
Eligible developments may receive a five‑year, 100 per cent rates remission, along with possible reimbursement of development application fees, starting from the financial year construction begins.
Property Council of Australia Tasmania Executive Director Michael Kerschbaum said the initiative showed strong leadership from the City of Hobart at a time when the housing pipeline was under pressure.
“We think it’s a great initiative. We think that the Hobart City Council has shown great leadership in moving on an initiative like this,” said Mr Kerschbaum, pictured with Hobart Lord Mayor Anna Reynolds above.
He said while local government had limited levers to pull, the policy represented a practical and tangible contribution to addressing Tasmania’s housing shortage.
“It’s part of the jigsaw. It’s not the whole solution, so we don’t expect all of those 900 apartments to come on the market because there’s one initiative, but it shows real intent,” he said.
Macquarie Place was approved in April 2024 for 56 apartments at the corner of Macquarie and Barrack streets but has not yet begun due to construction costs.
Mr Kerschbaum said incentives of around $11,000 to $14,000 per dwelling could make a meaningful difference for developers reassessing whether projects could proceed, especially given the sharp rise in construction costs.
“Fourteen thousand dollars is fourteen thousand dollars, and it helps to balance things out. It also helps with cash flow by shifting some of those upfront costs later,” he said.
"It will definitely get developers to go back to their rulebook, look at the numbers again and see if they can make it stack up.”
He added that increased inner‑city housing would help support a vibrant, liveable Hobart.
“To have a vibrant city you need people living in it. What you don’t want is a desert town after 5pm,” Mr Kerschbaum said, noting that mixed‑use developments with housing above shops and restaurants were critical to city life.
He said increasing supply at any level would help ease pressure on prices and rents.
“It’s supply and demand. The more residential apartments we build, the better we’ll be at addressing that housing shortage.”
The City of Hobart will monitor and review the incentive after an initial implementation period.
Hobart Lord Mayor Anna Reynolds said that right now the issue in Hobart isn’t planning approvals — it’s getting projects out of the ground and built.
“This policy is about unlocking that supply and getting more homes built where people want to live — close to jobs, services and public transport.”