Talking Point: Booming market a boon for owners, bad news for renters

RICHARD ECCLESTON; Hundreds of houses used for Airbnb are being lost from residential supply

A FEW days after the March state election Premier Will Hodgman acknowledged the growing number of Tasmanians struggling to find affordable housing.

Five months have now passed and we’ve seen a housing summit, the appointment of a new housing minister and a range of new policies.

There are few quick fixes, with most of the evidence suggesting better housing outcomes can only be achieved by a sustained and co-ordinated policy response.

But, despite it being a long game, it is important to take stock of what has been achieved and what else needs to be done. Today we at the Institute for the Study of Social Change at the University of Tasmania have released a Tasmanian Housing Update, which finds that the housing market (and Hobart’s in particular) remains strong despite evidence that the rate of price growth is slowing.

This is good news for homeowners and investors, but is a real concern for Tasmanians in the private rental market.

As leases are renewed, thousands of households in Hobart’s private rental market could be paying an extra $5000 a year in rent relative to a couple of years ago, with major impacts on household budgets and the wider economy. A number of factors have contributed to the crisis in Hobart’s rental market.

The way in which our population is growing, driven by migration rather than natural increase, is particularly housing intensive and varies significantly between regions.

Increased migration and population growth is good for both our community and economy, but it is clear that we need to do much better when it comes to planning our future housing needs.

Our latest analysis of the impact of the short-stay accommodation sector on Tasmania’s rental market finds that since February the number of Airbnb listings has continued to increase.

With little sign of demand for short-stay accommodation waning, we believe the time has come for more focused and effective regulation, especially in inner Hobart where we conservatively estimate that 430 homes have been lost from long-term residential supply.

In particular, the research into the sector led by my colleague, university housing researcher Dr Julia Verdouw, has found the “sharing economy” is becoming less about sharing, and more about operating multiple commercial properties, especially in Hobart.

Those Airbnb listings most likely to indicate commercial activity (including when the host operates two or more Airbnb properties and when entire properties have high availability) are at an all-time high across Tasmania, with such activity concentrated in greater Hobart.

To quote Julia, “The risk is that more long-term residential housing stock will be converted to short-stay accommodation”, as demand for this style of accommodation in Hobart shows no sign of waning.

This pattern is now familiar around the world.

Governments that initially embraced peer-to-peer businesses are now introducing regulations to strike a better balance between the interests of the short-stay accommodation sector and the housing needs of the wider community.

The Hodgman Government should be congratulated for making tentative steps in this direction but needs to go further by enabling local government to develop community-specific approaches to short-stay regulation. We also assess the Affordable Housing Strategy and find that while it has delivered approximately 500 new homes since 2015, the social housing system remains under pressure.

While the waiting list for social and community housing has been stable at about 3000 over the past two years, the wait time for priority applicants has increased from less than 40 weeks to more than 60 weeks. Overall, despite a concerted response to the housing crisis, many significant challenges remain.

Improving the supply of affordable and suitable homes to meet our long-term housing needs will require a concerted effort and a good deal more planning and investment than has occurred in the past. Above all, implementing effective strategies to address our housing challenges will require leadership and a willingness to take political risks.

Professor Richard Eccleston is director of the Institute for the Study of Social Change at the University of Tasmania.

The Institute’s Tasmanian Housing Update, August 2018 is available at www.utas.edu.au/social-change