‘Shocking’: Only NSW worse than Tas for affordable rental homes
These cities were once among the cheapest in Australia, now they have become the most expensive.
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In some income brackets, renting a home is impossible.
PropTrack’s new Rental Affordability Index has put a spotlight on the strain in the rental sector.
The data shows a Tasmanian household earning a median income — equivalent to about $79,000 — could afford just one in five advertised rental properties.
This is the smallest share in the nation.
And while Tasmania’s overall lack of affordability is “only just” behind NSW currently, it was worse as recently as the 2019-2020 to 2022-2023 financial years.
At that time, Tasmania was the least affordable rental state in Australia. This was the only time that NSW was not the most unaffordable state.
It is a substantial change from the 2010s when Tasmania was among Australia’s most affordable rental states.
Report authors and PropTrack senior economists, Angus Moore and Paul Ryan, describe Tasmania’s rental affordability as “extremely challenging”.
Mr Moore said surging rents throughout Tasmania during the pandemic and in the three years prior was a major factor in the erosion of affordability.
“Affordability is at its worst level in at least 17 years, when our records began,” he said.
“To see Tasmania was, for years, the least affordable state in Australia is shocking.
“It is a lower income state, with increasing demand from buyers and renters in recent years, and the housing market has not been able to keep up.”
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When spending 25 per cent or less of gross income on rent, Mr Moore said a typical median Tasmanian household can today afford just 20 per cent of rentals. And that is an improvement over 2023 when it was just 15 per cent.
“At the upper end, for higher income earners in the 70th percentile, affordability in Tasmania is better than in NSW,” he said.
“But it is particularly challenging for lower to middle income earners.
“In the 30th income percentile, about $53,000, households could afford just 1 per cent of rentals — effectively zero.
“This is where support is vital, such as Commonwealth Rent Assistance.”
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Tenants in parts of Sydney are shelling out $20 more per day than they were at this time last year – just for a roof over their heads.
PropTrack data revealed an explosive change in the rental crisis, with rents ballooning in rapid time due to soaring population growth and a further deterioration in vacancies.
The figures showed median rents climbed by more than $150 per week in close to 100 city suburbs over the past year. A further 280 of Sydney’s circa 700 suburbs recorded average rises of $80-$150 per week.
A $150 per week rise or more effectively meant tenants paying the new rent needed to channel at least $20 more each day into their housing cost than a year ago – or at least $7800 more a year.
READ More about the rental situation in NSW
DOMINO EFFECT OF TASMANIA’S HIGH RENTS
Ray White Hobart property manager and business development manager, Tenille Nossiter, said the report’s findings were not a surprise, with Tasmania being ranked as one of the least affordable places for housing in Australia, and especially when considering the proportion of income that households can allocate to rent.
“Affordability challenges can have significant social and economic impacts, affecting various aspects of people’s lives,” Miss Nossiter said.
“Properties with weekly rental prices under $500 per week generate a lot of interest and are leasing relatively quickly.
“But properties advertised for $600-plus tend to stay on the market longer. For an average two-adult family, they would be allocating their entire income to rent alone.”
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When rents rise too high for a household, Miss Nossiter said tough choices might have to be made.
“When individuals or families face challenges like affording rent in a particular area, it’s common for them to explore alternative housing options,” she said.
“They might move to areas with lower rent, share houses, move back in with family, or consider alternative accommodation such as caravans.”
PropTrack’s report showed that between the March quarter of 2020 and December 2023, Hobart’s median advertised rent increased by $50 per week. In regional Tasmania, the increase was $100.
Mr Moore said affordability in Tasmania has been worsening since about 2017, unlike much of the country.
“Tassie is unique in that affordability has improved slightly in 2023-2024 compared to FY23, although I would stress that it still remains very challenging,” he said.
“Hobart rents were down by about 5 per cent annually in the back half of last year, and while the vacancy rate is tight, it’s not as tight as it recently was.
“These are small signs that the heat has come out of the market just a little bit.
“However, the only way to sustainably find relief over the long term is to build more rental homes where people want to live.”
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Originally published as ‘Shocking’: Only NSW worse than Tas for affordable rental homes
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