Tasmania’s tourism boom has triggered an unprecedented surge in activity from international developers who are now ditching the mainland in favour of Hobart.

The growth has been two-fold; with a sudden increase of hotels planned for the city’s millions of domestic and international visitors, as well as developers’ bullish appetite for residential sites.

Chief executive of Knight Frank Tasmania, Scott Newton, said the current demand for Hobart development sites was unprecedented.

“Hobart has generally lagged the national market but we’re certainly seeing change unfold and there’s been a catch-up take place,” he said.

This month Singaporean billionaire developer Fragrance Group released updated plans for a 210-metre skyscraper in the centre of the city.

It would be nearly three times the height of the city’s current tallest building, the 74-metre-tall Wrest Point Hotel Casino.

The tower is one of four Hobart hotels Fragrance Group have submitted plans for, along with the recently opened 296-room Ibis Styles hotel on Macquarie Street.

Other large projects in the works include the expansion of hospital redevelopment in the CBD, relocation of Tasmania University and an expansion of Hobart Airport to facilitate direct international flights.

Economist and vice-chancellor’s fellow at the University of Tasmania, Saul Eslake, said Tasmania’s economy will undoubtedly benefit from the jobs created by an oncoming construction boom.

“History tells us that with Hobart’s economy there has been big periods of optimism before that haven’t lasted, but this time around, in the absence of an increase to the exchange rate, things look to be promising.

“There hasn’t been significant hotel development in Hobart for the last 15 years and now with an increase of tourists and a low exchange rate there is clearly demand. Tasmania is attracting a certain type of tourist that prefers a more upmarket hotel and visits to wineries and arts festivals. ”

According to Tourism Tasmania the state had more than 1.24 million visitors during the 2016 calendar year – up 7 per cent from 1.15 million in 2015.

Hobart now has the country’s third-best performing CBD hotel market behind Sydney and Melbourne, according to hotel analysts STR and Deloitte.

This year Marriott International announced it would build Hobart’s first five-star hotel since 2004.

The 198-room luxury hotel will be part of the $150 million redevelopment of Parliament Square, a 15,000-square-metre site backed by Citta Property Group.

Another international firm, Hyatt Hotels, has also announced plans to build a $40 million hotel in the city, set to open in 2019.

LJ Hooker Hobart director and principal Mark Devine said that following Chinese President Xi Jingping’s visit to Tasmania in 2014 there was an immediate increase in inquiries from Chinese and Singaporean property developers.

“Also many people are visiting Tasmania due to MONA and people might decide to buy a home here as an investment or might come back and look more seriously at opportunities here,” he said.

Mr Devine also said that after years of undersupply followed by a surge in house prices the conditions have been ripe for a boom in apartment development.

“There’s not enough stock about so the timing is pretty good to be doing those sorts of projects,” he said.

“Hobart is seen as still an emerging market where perhaps there’s better viability for projects.”

In the past 12 months Hobart house prices grew faster than every other capital city in Australia – up 15.2 per cent to a median of $405,000, according to Domain Group data.

Apartment price growth has been significant – increasing 7.7 per cent over the 12 months to June, to a median of $310,854.

It’s not just overseas firms interested in Hobart; Melbourne-based Small Giants Developments firm has lodged plans for a 30-apartment “sustainable living complex” called The Commons.