‘Going hungry’: Rent increase forecast puts spotlight on Hobart’s crisis

This city’s renters are set to be hit harder than most if expected rent rises come to fruition.

TASMANIAN renters will be pushed into financial stress if this forecast is realised.

New Suburbtrends research has revealed how much rents will change in the coming year, with most areas to become more expensive — especially for unit renters.

Divided into ABS Statistical Area Level 2 (SA2) groupings, the report revealed a swath of areas where rents are forecast to climb by a double-digit percentage.

In the units sector, the Waratah region would be the hardest hit. Rent today is $360 per week, but a 66 per cent increase would take it to $598 by December.

This region covers 26 suburbs. A search on realestate.com.au this week showed there was only one rental property on the market, a three-bedroom Myalla home for $420 per week.

Suburbtrends rental house forecast ranged from a 7 per cent reduction in rental prices in the Southern Midlands up to a 13 per cent increase on the West Coast.

Houses in the West Coast, Smithton, Cygnet, Latrobe and Miandetta SA2s are predicted to increase by between $29 and $42.

Six unit SA2 areas are forecast to grow by over $100 per week, from $114 in Westbury up to $238 in Waratah.

Suburbtrends founder Kent Lardner.

Suburbtrends founder Kent Lardner said an increase of a few dollars every week can be enough to push a renter to allocate 30 per cent or more of their income towards their rent — the cut-off line considered to be rental stress.

“This can create a leakage in the local economy. When people have little disposable income, it has an effect on the retailers, pubs, restaurants and markets in their area,” he said.

Mr Lardner is expecting a “significant increases” in Hobart unit rents of about 14 per cent compared to an incremental increase in house rents of 1 per cent.

“With units being relatively affordable for household incomes, rental asks have so much room to grow,” he said. “And Hobart does not have a large enough supply of units to meet growing demand.”

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Rural listing No.419 Myalla Rd, Myalla is the only rental in its SA2 region, it is asking $420 per week via One Agency.

Pattie Chugg, chief executive of Shelter Tas — peak body for housing and homelessness in Tasmania — said any increases in the cost of renting are extremely concerning.

“The forecasts in this report are alarming,” she said.

TasCOSS acting chief executive Charlie Burton agreed, saying Tasmanian renters are trying to make ends meet amid rent increases that have outpaced inflation and wage growth.

Dr Burton said Tasmania is one of the least affordable places to rent in the country.

“Families tell us they are going hungry or eating food of low nutritional value, avoiding seeing the doctor and going into debt to afford essentials, including energy and school supplies,” he said.

Doctor Charlie Burton. Picture: Nikki Davis-Jones

Ms Chugg said conditions in the Tasmanian private rental market remain extremely challenging, with data showing that since 2016, the median rental rate in Hobart has grown by 60 per cent.

“For some years now, housing hardship has been pushing further up the income scale. Even if rents stabilise at current levels in Tasmania, the private rental market remains tight and competitive, and too expensive for too many of the over 40,000 Tasmanian households who rent their homes,” she said.

“This report is extremely bad news for renters, if the forecasts come true.”

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Ms Chugg said Tasmanian incomes are lower than the national average, so increasing rents can have a “devastating impact”.

“Even with an average income of $86,000, a household renting at the median rent is dangerously close to rental stress, paying 29 per cent of their income in rent,” she said.

“People on low incomes, such as pensioners, those on income support or part-time workers, have it the worst, living in dire housing stress and too often facing the threat of homelessness.

“Regional communities that used to offer some respite now have surging, inescapable rents.”

Shelter Tasmania’s Pattie Chugg. Picture: Sam Rosewarne

Ms Chugg said housing and homelessness services are “overwhelmed” with requests for help and often can’t keep up with demand.

She said the biggest reason for Tasmanians to be facing homelessness is that they cannot afford or find a home to rent.

“With accelerated cost-of-living pressures, and an affordable housing crisis, it is vital to ensure investment in social and affordable housing,” she said.

“Tasmanian needs a level of at least 10 per cent of dwellings to be affordable and social rentals. The current level is about 6.2 per cent. We call on the Tasmanian Government to support this target.”

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Dr Burton said TasCOSS continues to call for greater action to protect households in a “failed housing market”.

“This includes a temporary limit on the amount rents can increase each year, tighter regulation of short-stay accommodation to prevent entire homes leaving the long-term rental market, and an immediate review of the Residential Tenancy Act to give more certainty and rights to the many thousands of Tasmanians who will be renting for the long-term, if not permanently, due to being locked out of homeownership,” he said.

With four bedrooms, three bathrooms and a riverfront position, No.25 Corinth St, Howrah is available via Knight Frank for $1000 per week.

Mr Lardner said while investor numbers have decreased, Hobart remains a solid place to invest in property, which can add to the available rental pool.

“There are higher yields to be found elsewhere, but these things can change quickly,” he said. “Will increasing rents entice investors back to the market this year?”

Meanwhile, new PropTrack data shows Hobarts rental vacancy rate fell 0.33 percentage points to 1 per cent in January.

Across the quarter, the rate was down 0.25ppt, which was the largest decline in Australia.

Regional Tasmania’s vacancy rate is 0.97 per cent, up 0.12ppt annually.

LJ Hooker has No.1/3 Hazel St, Blackmans Bay available to rent for $670 per week.

Economist Anne Flaherty described rental availability as “deteriorating further”.

“Tenants are facing stiff competition,” she said.

Hobart’s median house rent is $550 per week, about the same as Adelaide and Melbourne, per PropTrack. Units sit at $460.

In regional Tasmania, house rents are $450 and units $375.

Renting a unit in Hobart is forecast to rise by 14 per cent, per Suburbtrends.

Harcourts Hobart property portfolio manager Eboni Vickery said there are ways that renters can help themselves secure a home.

“We recommend applying for the property as soon as possible, and ensuring that the application is fully completed,” she said.

“All required documentation and information should be presented in the initial application, including any additional occupants over the age of 18.

“Ensuring that a renter’s references know we are going to make contact with them and that clear and accurate information is provided are keys to success.”