Not long ago, Hobart was an end-of-the-world sort of town that seemed achingly far from anywhere – and particularly far from culture. It was not the kind of place where you would find people queuing for a museum, out dancing on a Friday night, dining on imaginative, cosmopolitan food or quaffing top-notch local wines. Hobart was rather stolidly staid: a nice place to visit for its gorgeous natural setting, but not the place for much creativity or culture.

But today, Tasmania's capital is downright cool. Think of a city with one of the world’s best museums of modern art, eclectic festivals of arts and music, and bountiful art house cinema and theatre. Think of a place that is a smorgasbord for discerning epicureans with home-grown fine wines. Think also of hip places to stay: a dockside art hotel that was once a jam factory or a colonial mansion gone contemporary.

Australia’s eclectic museum

MONA, the new and daring Museum of Old and New Art, has had perhaps the most influence on Hobart’s new hipster image. The eclectic museum housed in an avant-garde edifice on the banks of the River Derwent has been wowing the international art world since its opening in 2011. Exhibiting the collection of gambling millionaire David Walsh, this is the largest private collection in Australia and contains both big and unknown names. MONA is in no way about art snobbery: it is raw, sometimes shocking and unpretentiously cool. With top restaurant The Source, which gets creative with the best of local produce, as well as the onsite MooBrew microbrewery and Moorilla winery, MONA is a whole hip world unto itself. To completely immerse yourself, stay at the architecturally fabulous and art-saturated MONA Pavilions, located on the edge of the River Derwent.

A city of makers

MONA is in some ways emblematic of many things Hobart has become. Still proud of its working-class roots, Hobart is creative, unselfconscious, down-to-earth, large “G” Green and small “l” liberal. Community is important here, and if you have a good idea, the city is small enough to make a mark. All this means that Hobart’s new cool is all about making – making art, music or food that is one off, unique, perhaps organic and definitely handcraftedly-hip.

Hobart’s colonial sandstone warehouse strip, Salamanca, and the city-side docks are a great place to experience this creativity in concentration. At the huge Saturday market, you can browse through an eclectic mix of handmade offerings. Buy some Summer Kitchen organic sourdough bread made in the village of Ranelagh, south of Hobart, to devour with some famous Bruny Island cheese (try the especially delicious one-day-old olive oil marinated cow’s cheese). Then among the convict-hewn sandstone, search for handmade treasures in shops like The Maker (unique clothes and jewellery), Norman & Dann (handcrafted chocolates), ending with an off-beat exhibition at the Salamanca Arts Centre. If you are in Salamanca in the evening, meet local music makers at Rektango, a Hobart institution of music – funk, reggae, soul, blues, rock – dancing and convivial vibes in a rock-hewn courtyard just behind Salamanca Place.

Down at the dockside (where fast catamarans will take you 16km upriver to MONA), it is all waterside dining with views over the working fishing port, Antarctic icebreakers and tall ships. Stroll through here to the artsy precinct of Hunter Street, home to the Henry Jones Art Hotel, set in historic industrial buildings that were once a jam factory. As well as being downtown’s coolest place to stay, the Henry Jones is also an extensive exhibition space for Tasmanian art. There is more Tassy creativity on display at the nearby waterfront Tasmanian School of Art, where the Plimsoll Gallery showcases innovative local, national and international contemporary art and design.

City revival

Hobart’s city centre was long a little dull, and while it can still feel like a ghost town after dark, a fantastic selection of funky shops, restaurant and cafes make it worth exploring.

Dive into Tasmania’s best bookshop, Fullers on Collins Street, for your holiday reading, then indulge in macaroons and tea in their cafe with its perfect panorama of 1,271m-high Mount Wellington looming over the city.

Love & Clutter on Murray Street is one of those stores where you want to browse for hours and buy everything. They sell a wonderful mix of unique clothes, jewellery, bags and toys – effortlessly offbeat treasures for both little people and big.

Sidecar, just north of the city centre, is one of Hobart’s newest and coolest hangouts, where the city’s beautiful people come for an innovative menu of tapas for both lunch and dinner. Try the pan-fried mushrooms with toasted pumpkin seeds from the Huon Valley in Tasmania’s south, or scrumptious wagyu hotdogs from beef in the island’s northwest. There is also a perfectly chosen international wine list as accompaniment.

Garagistes, just next door, is the hands-down hippest restaurant in town. At shared tables in a trendy warehouse conversion, head chef Luke Burgess (who had posts at Tetsuya’s in Sydney and Noma in Copenhagen) serves up a surprising artistry of dishes: roast saddle of aged lamb with kunzea, fried saltbush, grilled lettuce and milk curd or wood-grilled king tiger prawns with eel dashi shiitake, puffed wild rice and basil. The creative food is accompanied by a globe-roaming natural wine list.

Go north

To round off the tour of Hobart’s new cool, head to North Hobart, the city’s most eclectic and most culturally diverse suburb where newfangled street art meets working-class grunge, and just about anything goes. The Republic Bar has long been an institution for drinks and live music on the main Elizabeth Street strip, which is jam-packed with restaurants, from Thai to Turkish. For eclectic art, visit the Bett Gallery, which exhibits and sells some of the country’s finest young talent. And do not miss the State Cinema. You could pop in just for a coffee or to browse the bookshop, but better, take in an alternative or foreign film in one of the six intimate cinemas at this classy art house spot.

Festival time

For a city of its size (population just 210,000) Hobart has a magnificent constellation of festivals. The coolest of these has to be MONA FOMA – MONA-led alternative music performances (mostly free) held in converted warehouses by the docks every January. It is a mix of classical, blues-grunge and cutting-edge experimental, with past performers including Nick Cave and the Bad Seeds, Grinderman and Philip Glass. The festival is curated by American Brian Ritchie (of Violent Femmes fame) who now calls Hobart home.

Contrast this with the four day Festival of Voices – held every July, the dead of winter. Either listen to a wonderful variety of voices – from choral to jazz to gospel – or sculpt your own voice at workshops and even add it to the festival choir that crescendos around a vast bonfire into the darkest nights of the year.

If theatre is what you are after, plan your trip for Ten Days on the Island, a celebration of island culture that sees performers (from Tasmania to Iceland to Hawaii) create theatre that is so perfectly alternative-creative and effortlessly down-to-earth-cool that it has found its natural home in the new, hip Hobart.