Regional rent increases ‘enormously tough’ for families

With rents pushing sky-high, there is one spot in Tassie where people can buy a home and save a few bucks.

Jarrad Bevan

@JarradBevan

3 min read

August 14, 2024 - 5:00AM

Queenstown is not your typical Tassie suburb.

Property

Don't miss out on the headlines from Property. Followed categories will be added to My News.

THIS West Coast town offers something that no other regional suburb does.

Mortgage Choice analysis of PropTrack data has revealed that Queenstown is Tassie’s only suburb where buying a home costs less than renting.

For 135 suburbs — houses and units — the brokerage’s lending team applied a Big 4 bank average interest rate of 6.69 per cent to a 30-year loan with an 80 per cent loan to value ratio.

They found a typical Queenstown renter will pay $1343 per month, while a homebuyer will need $983 for their loan.

This result comes on the back of extremely high price growth in the coastal suburb.

At this time last year, the Mercury revealed that the mining town had recorded top five nationwide home value growth, 207 per cent over the past decade.

MORE: ‘Clearly unusual’: Tas West Coast house values climb 200%

$80k: West Coast home won’t break the bank, but …

Queenstown. Picture: Peter Mathew

Empire Hotel, Queenstown.

Mortgage Choice chief executive Anthony Waldron said the data showed a number of areas around regional Australia where a loan was more affordable than rent.

“If you’ve been saving, you may be better off buying your own property and exiting the rental market,” he said.

“With your own property, you’re building on your financial position and paying off your own asset, rather than your landlord’s mortgage.”

Anthony Waldron, CEO of Mortgage Choice.

For Queenstown local and Harcourts property representative, Rodney Triffett, these figures were not surprising.

“It has been this way for some time,” he said.

“When I purchased a property with my partner in 2018, our rent was $115 per week but the mortgage was only $90.”

Like any suburb, Mr Triffett said Queenstown was not immune to market changes.

“With the way our market has grown, a typical home will rent for about $350 per week,” he said.

“There are about a dozen Queenstown rentals listed today, which is in line with average winter stock levels.”

No.23 Denison St, Queenstown is asking $370 per week for a four-bedroom house. Picture: realestate.com.au

This two-bedroom home at No.10 King St, Queenstown is available for rent for $280 per week. Picture: realestate.com.au

In separate PropTrack data, the West Coast topped a table of eight regional SA3 areas for the largest change in median advertised weekly rents for houses since the start of Covid.

The West Coast recorded a 48 per cent increase, bringing its median weekly rent to $340 per week.

PropTrack senior economist Paul Ryan said an increase of this size was “enormously tough” on a family’s household budget.

“Renters, particularly low income renters, will find it hard to keep up. That money has to come from somewhere,” he said.

“Few would have hundreds per week spare to add to their rent.”

Senior economist at PropTrack, Paul Ryan.

The research showed rents in the North East have grown by 43 per cent to $400 per week; Devonport is up 39 per cent to $430; and Burnie-Ulverstone is up 38 per cent to $400.

By comparison, Hobart house rents are up, but by about half of what regional areas have recorded. Hobart houses have increased to $550 per week, up 17 per cent over the same time frame.

Mr Ryan said the more affordable parts of cities and regional areas are the ones that are performing the best for sale price growth.

The West Coast again leads here, with 97 per cent home value growth since March 2020 and 14 per cent growth over the past 12 months.

But its median sale price is $370,000, the cheapest of the eight regions in the dataset by far, and $100,000 less than the next least expensive area, Burnie-Ulverstone.