Hobart's property market experienced a growth spurt in the last three months, with house prices in the Tasmanian capital posting a bigger quarterly rise than all other capital cities.
Figures from CoreLogic on Tuesday showed Hobart's dwelling prices rose 5.8 per cent in three months to January, while the next fastest growth was 2.7 per cent in Sydney and 2.4 per cent in Melbourne.
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Over a year, Hobart had the third fastest house price of all capitals, with a 7.8 per cent rise, behind Sydney's 16 per cent increase and Melbourne's 11.8 per cent rise.
The figures published on Tuesday also showed the property market across most parts of the country made a strong start to 2017, despite low numbers of listings during the holiday season, with the average capital city price rising by 0.7 per cent.
The increase in Hobart prices has occurred amid signs of improvement in the island state's economy.
CommSec's recent State of the State's report said Tasmania had jumped from seventh to fourth place among the state economies, helped by higher population growth and stronger mortgage lending by banks.
CoreLogic's head of research, Tim Lawless also said affordability was a factor in Hobart's strengthening housing market.
![When it comes to property, Hobart is the cheapest capital city in Australia.](/web/20170202080743im_/http://www.smh.com.au/content/dam/images/g/s/q/j/t/w/image.related.articleLeadwide.620x349.gu2rp9.png/1485907255361.jpg)
It has the cheapest housing of all Australian capital cities by some margin, with a typical house price of $391,300, and a median unit price of $304,300, according to CoreLogic.
In comparison, the median price for a Sydney dwelling is $850,000 and $640,000 in Melbourne.
"While the growth trend in smaller cities such as Hobart can show higher levels of volatility, clearly the Hobart housing market is now well into its growth cycle," Mr Lawless said.
"Strong housing market conditions are being driven by positive affordability of housing, as well as improving economic conditions and stronger migration trends."
Over a longer time frame, however, Hobart is one of the worst performing real estate markets in the country.
Since the global financial crisis, Hobart prices have lifted by only 9.5 per cent, compared with 99.4 per cent in Sydney, 85 per cent in Melbourne, according to CoreLogic.