‘Devastating’: Hobart rent crisis is bad, it’s about to get worse

Hobart rents could surge by 6-10 per cent. Picture Supplied

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In 10 years, Hobart renters face the prospect of paying almost $40,000 per year to keep a roof over their head.

For median house renters, this is over $9000 more than they pay today, taking rents from $580 to $760 per week.

The increase for unit renters is forecast to surge by almost $8000 to $33,384 per year by 2035 — $490 to $642.

Greater Hobart’s cheapest rental listing is a one-bedroom studio in Battery Point for $240 per week. The most expensive, asking $2250 per week, is a three-bedroom rooftop apartment in the city.

If the forecast came to fruition, the studio would cost $314 and thee three-bedder $2948.

The analysis was based on a varied Consumer Price Index (CPI) forecast, easing from 3.6 per cent in 2026, as predicted by SQM Research, to 2.6 per cent by 2029.

This approach accounted for the past decade’s unusual economic conditions, with skewed migration rates through the pandemic.

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SQM Research managing director Louis Christopher.

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SQM Research managing director Louis Christopher is forecasting a 2-4 per cent increase in rents across Australia’s capitals in the next year.

Other cities could be much higher, including Hobart, which is tipped for a 6-10 per cent increase.

But the figures are not likely to hold at that level, with SQM anticipating 180,000 new dwellings to be completed nationwide in 2026.

Mr Christopher said tenants would be better off buying a home if they could afford it.

“If you have the opportunity to get in as a first-home buyer you should seriously look at it,” he said.

“The way it’s gone for tenants who have turned into first-home buyers has been better than those who remained as tenants, and I don’t see that changing any time soon.”

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No.608/62 Patrick St, Hobart is greater Hobart’s most expensive rental listing today, asking $2250 per week. Nest Property. Picture: realestate.com.au

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No.608/62 Patrick St, Hobart.

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Shelter Tasmania acting chief executive, Dr Lauren McGrow, said Tasmanian renters are already struggling.

Dr McGrow said Hobart is moderately unaffordable right now, so any increase in rental prices will be “hard” and “devastating for many”.

“The current vacancy rate of less than 1 per cent indicates that the housing crisis across Tasmania has not abated,” she said.

“Many renters are locked out of Hobart now, and have already reached the upper limit of what they can afford.

“People are going without essentials just to pay the rent.”

Shelter Tas acting CEO Lauren McGrow.

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A Property Investors Council of Australia 2025 members’ survey with about 900 responses, found that 65 per cent of landlords said they had passed on less than 10 per cent of the added costs they had faced in the past year.

Not including interest, almost 270 indicated their costs had increased 11-20 per cent, while 160 encountered a 21-40 per cent increase in their costs.

PICA chair Ben Kingsley said landlords should be looking to boost rental returns by 4-5 per cent as they try to recoup rising costs.

“If the yield drops low, and you aren’t getting a capital growth return, then you will move on from that asset,” Mr Kingsley said.

No.55 Main Rd, Sorell seeking $575 per week. Kate Storey Realty. Picture: realestate.com.au

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No.10 Terrina St, Lauderdale asking $580 per week. Peterswald. Picture: realestate.com.au

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Socialist housing advocate Jordan van den Lamb said tenant households were already struggling to survive, with many choosing between rent and food or medicine.

He fears increases could be worse than SQM’s forecasts.

“You can see the household size of people who don’t own their home is increasing, so we are getting cramping of living spaces for renters as people have to rely on living with other people to be able to afford the place they rent,” he said.

No.29 Tingira Rd, Blackmans Bay for $585 per week. Raine & Horne. Picture: realestate.com.au

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Shelter Tasmania is calling for action on the rental issue from all levels of government.

“We need to increase the new supply of social and affordable houses for those on low incomes, such as pensioners and students, and for moderate income earners like nurses and teachers,” Dr McGrow said.

“We need to provide a 20 per cent uplift in funding for homelessness services, which are stretched beyond capacity.”