The bank said the mix of unsatisfied demand for affordable housing and a growing population was a key economic and social issue for the state.

"The continuing rapid increase in house values is placing added pressure on Tasmanians seeking a home, with Hobart recording the strongest price increase of all state capitals in the March quarter of 7.6 per cent," MyState managing director and chief executive Melos Sulicich said.

"According to the CoreLogic April Housing Market Update, the increases are not confined to Hobart, with Meander Valley/West Tamar recording a rise of 7.8 per cent, the North-East 7.7 per cent, Devonport 7.5 per cent and Burnie /Ulverstone 7.4 per cent.

"Launceston house value rose by 5.8 per cent for the quarter.

"It now takes Tasmanians on average 8.4 years to save the 20 per cent deposit for a home loan, only just behind the time required in Sydney (11.4) and Melbourne (9.8).

"With property values nationally predicted to rise by 15 per cent this year and Tasmania leading the nation, positive government action is required."

In comments accompanying the bank's latest Tasmanian Economic Update report, Mr Sulicich said Premier Peter Gutwein had agreed during the election campaign increasing affordable housing was a key issue.

Mr Sulicich said the Liberals had promised an extra $315 million for social and affordable housing and homelessness initiatives, and to increase the First Home Owner Grant from $20,000 to $30,000 until June 30, 2022.

"These are positive initiatives, and we urge the state government to ramp up the investment as a matter of urgency, as well as consider extending the First Home Owners Grant scheme beyond 2022," Mr Sulicich said.

The report said a positive economic rebound and an improved budget bottom line should allow the state government to address social and economic challenges identified during the campaign.