Report – SGS Economics & Planning, November 2022
Rental Affordability Index
Excerpt – Greater Hobart
The average rental household in Greater Hobart has a gross income of $84,613 per annum. High rents, relative to household incomes, mean that Greater Hobart is the least affordable metropolitan area in Australia and has been since 2019.
Despite a brief improvement during 2020, upon the onset of the COVID-19 pandemic, Hobart is now nearly at its least affordable level across the period measured by the RAI (reached in 2019). With a score of 102, the average rental household in Hobart is close to being in rental stress (below a RAI score of 100), paying 29 per cent of their total income if renting at the median rate. Since 2016, the median rental rate in Hobart has grown by 60 per cent (consistent across dwelling sizes). It is now 11 per cent higher than the Melbourne median, despite the average rental household income being 18 per cent lower.
These rapidly growing rents are likely driven by an inadequate supply of rental housing, as evidenced by the consistent unavailability of bond lodgement data in many areas of Hobart (shown as grey in the RAI map, particularly for smaller dwellings). The onset of the COVID-19 pandemic resulted in significantly improved affordability in several parts of the city, from Central Hobart to Lindisfarne. However, these gains were short lived. By June 2022, the RAI score returned to pre-pandemic lows. Almost all parts of Greater Hobart are considered Moderately Unaffordable or Unaffordable, with affordability decreasing significantly from Mount Nelson to Glenorchy over the past year. Broadly, there appears to be a fluctuating affordability trend across Hobart since 2017.
Rest of Tasmania
The average rental household in regional Tasmania has a gross income of $70,855 per annum. Regional Tasmania has a RAI score of 108, which represents a large decline in affordability, to a historic low, over the last year (from a score of 120, a 9 per cent decrease). The average rental household faces paying around 28 per cent of their income if renting a dwelling at the median rate, which is nearing the definition of rental stress.
Despite rising incomes, affordability has worsened in most parts of regional Tasmania. Suburbs of Launceston such as Kings Meadows and the town of Perth have declined significantly, now being considered Unaffordable with a RAI score below 100. Regional towns such as Burnie and Tomahawk have shifted from Acceptable to Moderately Unaffordable over the past year, while east coast from Triabunna to Swansea have seen a similar trend.
Read the full report here:
Media release – TasCOSS, 29 November 2022
Immediate action needed to support Tasmanians experiencing housing stress
As Tasmania’s levels of housing stress continue to worsen and the new Rental Affordability Index rating shows Greater Hobart is the least affordable capital city to rent in Australia, TasCOSS is calling for the introduction of short-term rental measures to support Tasmanians experiencing homelessness and housing stress.
TasCOSS CEO Ms Adrienne Picone said the Rental Affordability Index revealed that over the past five years the gap between income and rent has been widening and if this trend continues, the average rental household in Hobart will be in housing stress.
“While we welcome the Tasmanian Government’s commitment to build 10,000 more social and affordable homes over the next 10 years, while these houses are being built we need short- and medium-term measures to support and improve housing outcomes for Tasmanians,” Ms Picone said.
“One immediate measure the Tasmanian Government could take to assist renters to stay in the private market is to cap annual rent increases to CPI until rental vacancy rates reach 3% as well as introduce an empty homes levy.
“Empty homes levies in other parts of the world have been shown to significantly boost the supply of rental properties. In such a tight rental market, every new available home counts.
“We also echo calls from Shelter Tasmania for limits to be placed on short-stay accommodation, so that whole homes stay in the private rental sector rather than the short-stay sector.”
Ms Picone said for those Tasmanians who are managing to keep a roof over their heads, a comprehensive review of the Residential Tenancy Act is needed, which includes a review of minimum standards, so they are not spending more than they need to on energy bills.
“We also need to give tenants longer-term security so they don’t exit tenancies into homelessness,” she said.
“This is partly to acknowledge that renting will be the norm, not a short-term option, for an increasing number of Tasmanians with home ownership out of reach. We must therefore work towards improving security of tenure for renters as an urgent policy objective.
“To make a real and immediate impact however, we continue to call on the Federal Government to do the right thing and provide a 50% increase to the Commonwealth Rent Assistance payment, which targets help to low income Tasmanians trying to survive in the private rental market, alongside an extension of the National Rental Affordability Scheme (NRAS).”
Ella Haddad MP, Shadow Housing Minister, 29 November 2022
Tasmanian renters continue to suffer under Liberals
The release today of the Rental Affordability Index has further highlighted the dire situation for renters in Tasmania.
Low wages and high rent increases have led to Hobart being the least affordable metropolitan area in Australia, a trend that has been consistent since 2019.
The median rental rate in Hobart has grown by 60 per cent since 2016. It is now 11 per cent higher than the Melbourne median, despite average household incomes being 18 per cent lower in Tasmania.
Clearly Jeremy Rockliff’s insufficient wage offers to public sector workers are adding to the strain facing Tasmanians.
This has led to almost all of Greater Hobart’s regions being considered moderately unaffordable or unaffordable.
The data is not much better for regional Tasmania, with the report showing a large decline in affordability over the last year alone.
The Liberals have neglected the housing portfolio for nearly a decade.
Instead of obsessing over building a $750 million stadium in Hobart, Jeremy Rockliff and Housing Minister Guy Barnett should get their priorities right and finally delivering the housing Tasmanians need.
Mike seabrook
December 1, 2022 at 02:03
Have a look at the monthly statistical report re population growth. Look at immigrant numbers. Look also at building approvals statistics, and look at the number of completed subdivisions on which no houses were commenced, and why these do not point to rental vacancies being reported tight.
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Lachlan Stewart
December 10, 2022 at 12:19
The Tasmanian state government should end its plans to build a stadium at Macquarie Point, and plan instead for a mixed-use development as there could easily be hundreds of homes of various sizes built there. Our government could then offer to rent or sell these homes below market rate to in-demand workers, such as health and education staff, to entice them to move to Tasmania.
We have a shortage of key workers, and we desperately need more. Workers won’t move here for the lower salaries which are coupled with more expensive (or non-existent) housing.
Blocking immigration isn’t really a solution, because immigrants are filling these vacancies.