Real estate agents say they've seen "fierce competition" in the market in Launceston in recent time.
Flanagan Residential property consultant Shelley Spencer said she has seen an increase in demand and interest in listings.
"I had one property listed in West Launceston for offers over $475,000," Ms Spencer said.
"It sold for $550,000 in three days, after eight offers - and that's the trend that we're seeing and expect to continue to see in the next twelve months."
Ms Spencer said it is particularly difficult for first home buyers and young people to get their foot in the property market.
"The situation is that the stock level in real estate is down, so anything that comes on the market has that fierce competition which pushes the price up due to the fact there simply isn't enough stock to meet the demand," she said.
"Coupled with the low-interest rate environment, people who are cash rich see property as a better investment, which makes it even harder with people continuously missing out."
Hoping to start to ease the pressure on the market, a new future residential development has been released in the Launceston CBD.
Saint Lofts, designed and developed by S Group, offers inner-city apartments targeted towards the "entry level" market.
S Group director Sam Haberle said interest in the development proved the strength of demand in the market.
"If you're looking at stock at the moment, there really just isn't anything around for entry-level purchasers, and whenever something comes around it's snapped up almost instantly," Mr Haberle said.
"We took these apartments to the market for between $300,000 and $350,000 which with the price boom is entry level, and they've been incredibly popular.
"We sold seven within the first two weeks, and it's looking like we'll have sold another two by the end of the week."
Mr Haberle said interest had been mixed in the properties, with purchasers including retirees, investors and first home buyers. He said he wanted to promote people moving into Launceston, rather than outer suburbs.
"Looking holistically at Launceston, we're seeing a lot of urban sprawl with new subdivisions, and pushing at those outer suburbs is creating issues like more traffic congestion on roads," he said.
"We have such a vibrant city, and we want to bring people here, create more buzz.
"The more people we have, the more food and beverage offerings we get and the more retail stores move in, and that's to everyone's benefit."