Sharp rise in house prices more evidence that hot housing market is squeezing out too many

NEWS that six southern Tasmanian suburbs recorded median house price growth of more than 30 per cent during the past year is really quite something and an indicator of just how hot our property market has been.

NEWS that six southern Tasmanian suburbs recorded median house price growth of more than 30 per cent during the past year is really quite something and an indicator of just how hot our property market has been.

And as Real Estate Institute of Tasmania president Tony Collidge points out today, much of it can be put down to a classic supply and demand equation. Add to that the interest from investors, with rental returns sky-high — and there is no sign of the market cooling down.

This is good and bad news. It’s good news for anyone who already owns a property. And property prices should never be talked down. They are a sign of a growing economy. That’s a good thing.

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But we should not forget they also make it harder for anyone looking to get into the property market for the first time, or people looking for rentals.

As the Mercury has been reporting, this rapid rise in property prices, coupled with an unregulated short-term accommodation rental market (such as through website Airbnb), has left Hobart in the middle of a rental crisis.

Vacancy rates are the lowest experienced in an Australian capital city and working families are being priced out of the market — or are having to resort to quite literally living in tents.

This rental crisis has become the single biggest issue facing our community, at least in terms of demanding an urgent response.

And yet when the Treasurer Peter Gutwein and the Shadow Treasurer Scott Bacon were asked during Monday’s Mercury/TCCI debate about the rental crisis, neither were willing to confront it head on with any urgency.

Mr Bacon said there simply was no short-term fix. Mr Gutwein chose to put a positive spin on the matter — saying that “while it is a challenge, it is a positive outcome of Tasmania not being a mendicant bottom-of-the-barrel Australian state in respect of the growth of our economy”.

Mr Gutwein talked about the Liberals plan to spend $125 million over five years on more affordable housing, cuts to stamp duty for those wanting to buy a first home, the $20,000 first-home builders’ grant, tax relief for retirees downsizing and a proposed three-year land tax holiday for properties going into the rental market.

Mr Bacon talked about Labor’s plan to spend $106 million on 900 new public homes and the need to construct the Hobart light rail so land either side of it could be rezoned for medium and high density — and affordable — housing.

Now that’s all fine and together the policies from both sides would likely go a long way to addressing the crisis in the medium term.

But the reluctance from both sides to talk about the elephant in the room — the rampant rise of an unregulated short-term accommodation market — suggests they have more to lose politically from addressing it than to gain by giving real assistance to those in need right now. And when we have families living in tents in our suburbs, that is a real shame.

Responsibility for all editorial comment is taken by The Editor, Chris Jones, Level 1, 2 Salamanca Square, Hobart, TAS, 7000