Hobart is not only Australia's second oldest city, but it is also the country's smallest.

Located on south coast of the island state of Tasmania, Hobart is home to just 129,000 people.

However, it is this fact that is the key to the riverside city's charm, offering a relaxing and provincial alternative to the hustle and bustle of the mainland cities.

The 1,234-metre high Mount Wellington offer a magnificent backdrop to Hobart's compact centre, while the Georgian and Victorian buildings convey a real sense of history.

It was established in 1804 at the mouth of the Derwent River, just one year after Tasmania's first settlement at nearby Risdon Cove.

Hobart soon developed from a collection of tents and huts into a busy harbour - one of the deepest in the world - and was proclaimed a city in 1842.

The Derwent River estuary was vital to the development of Hobart Town, as it was known until 1881, and many merchants made their fortunes from the whaling trade, ship-building and exporting products like corn and merino wool.

Its historical centre can still be seen at Salamanca Place, where cobble stone lanes and sandstone warehouses convey the area's sense of colonial heritage.

As well as picturesque waterways and quaint buildings, Hobart also has plenty of rich and fertile countryside to offer.

Half of Southern Tasmania is part of the Southwest National Park, the state's largest national reserve and just 80km from Hobart is Mount Field National Park with waterfalls, deep gorges and a large variety of unique flora and fauna to explore.

Apart from when the cricket is in town, the other occasion of the year Hobart really comes to life is during the famous Sydney to Hobart yacht race.

For the rest of the year though, Australia's southern-most capital may not be the life and soul of the party, but its easygoing atmosphere provincial feel is more than enough to win most visitors over.