Hobart’s rental crisis is getting worse, says FoundIt’s Kent Lardner. Picture: Supplied
Hobart renters were already doing it tough, and now their housing challenge is worsening.
New data has shone a light on the city’s shrinking rental pool, with 153 beds lost in Hobart in the year to May and a further 166 beds gone from the rest of Tasmania.
The FoundIt research showed Hobart Inner had lost the largest number of beds (68), and 25 former rental properties were listed for sale.
Over the year in this area, house rents increased by $70 per week while unit prices grew by $50.
Report author and FoundIt head of research Kent Lardner said the pressure was sharpest in a few suburbs.
He said that for house renters, the steepest annual rises were in Sandy Bay (up $100 per week), Mount Nelson-Dynnyrne ($80), and New Town ($70).
For unit renters, Mount Nelson-Dynnyrne rents grew by $70 per week, Hobart ($60), and New Town ($55).
“First-home buyers hoping the sell-off opens a window will find little relief: median house prices across those suburbs sit around $881,000 to $1.34m, and units around $460,000 to $680,000,” he said.
“The households being squeezed out of leases here are, in most cases, well short of affording to buy.”
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Up to $100 per week has been added to the cost of renting in Hobart. Picture: Supplied
The next worst-hit areas were Hobart’s North West region, including Austins Ferry, Moonah and New Norfolk, where 32 beds were lost and 11 ex-rentals were listed for sale.
Rents rose in this region by $65 per week for houses and $30 for units.
In the North East corner of the city — including Howrah, Tranmere, South Arm, Geilston Bay — 21 bedrooms were lost as eight former rentals were listed for sale.
Prices increased here, too, by $35 per week for houses and $25 per week for units.
Mr Lardner said that rental supply across much of the country had already been declining prior to the federal budget announcements and warned this trend was set to worsen in the months ahead.
He noted that while investment property sales had fallen compared to previous years, the pace at which new rental stock was entering the market had also slowed as prospective investors continued to exit.
“There will always be some landlords who need to sell because of divorce, death, retirement, or other reasons — that hasn’t changed — the difference is that fewer new rentals are being cycled back into the market,” he said.
“Now, especially in established areas, if a rental is sold, it’s not being replaced.”
RENT: A three-bedroom home at No.17 Amanda Cres, Sandy Bay is seek a renter at $1300 per week. Picture: realestate.com.au
RENT: This two-bedroom home is listed at $500 per week, No.1/3 Inglis St, New Town. Picture: realestate.com.au
This loss of rental stock will drive up rents, he said.
“There will be many suburbs where the rental stock may become so tight that many tenants will be pushed out of their area simply by there not being enough rental homes,” he said.
“Those homes that are available will be taken by the tenants with the deepest pockets.”
Mr Lardner added that this trend would worsen in the coming months because investor sales and purchases over the past month likely reflected decisions made before the budget.
“We haven’t even seen the tip of the iceberg,” he said.
FoundIt’s research comes as it was recently revealed that Hobart had become more expensive for renters than Melbourne.
Meanwhile, SQM Research figures put Hobart’s vacancy rate at 0.6 per cent, stating that rental supply “remains extremely limited”. Hobart is the second-tightest market behind only Darwin.
Ray White Group chief economist, Nerida Conisbee. Picture: Supplied
Ray White research shows Hobart’s rental listings are down by 9.7 per cent annually and down by 0.3 per cent monthly.
Ray White Group chief economist Nerida Conisbee said the latest data shows a clear split opening up in the housing market: more homes for sale, but fewer homes available to rent.
She said while this is not yet evidence of the full impact of the federal budget or the proposed negative gearing changes, it does show the market conditions those changes are landing in with renters facing an “availability problem”.
Ms Conisbee said the Budget was designed to encourage more established homes to move from investor ownership into owner-occupation.
“In that sense, more homes coming to the sales market is what the policy is trying to achieve: more choice for buyers and less investor competition for established properties,” she said.
“The risk is the rental side of that shift. If more homes go to owner-occupiers, fewer remain available to rent.
“That is problematic given rental availability was already falling before the Budget changes had time to flow through.”
– with Aidan Devine
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