Hobart is the capital and most populous city of the Australian island state of Tasmania. With a population of approximately 225,000, it is the second least populated Australian capital city. Founded in 1804 as a penal colony, Hobart is Australia's second oldest capital city after Sydney, New South Wales. The modern history of Hobart dates to its foundation as a British colony in 1804. Prior to British settlement, the area had been occupied for possibly as long as 35,000 years, by the semi-nomadic Mouheneener tribe, a sub-group of the Nuennone, or South-East tribe. The descendants of the indigenous Tasmanians now refer to themselves as 'Palawa'.
Since its foundation as a colonial outpost, the city has grown from the mouth of Sullivans Cove to stretch in a generally north-south direction along both banks of the Derwent River, from 22 km inland from the estuary at Storm Bay to the point where the river reverts to fresh water at Bridgewater. Hobart has experienced both booms and busts over its history.