Monday, December 10, 2018

Short lets, tourism and trendiness making Hobart unaffordable

Hobart is Australia’s least affordable capital for tenants, with the gap widening between incomes and rents, a new report has found.

A surge in properties becoming short-term rentals, coupled with  Hobart’s unprecedented real estate boom and tourism growth, is combining with low incomes to make it the least affordable capital according to The Rental Affordability Index (RAI).

The RAI is an indicator of the price of rents nationwide relative to household incomes, based on new rental agreements.

The biannual study, published by National Shelter Community Sector Banking and SGS Economics and Planning, shows tenants in Hobart spending 29 percent of their wages on rent, followed by Sydney renters on 27 percent, then Adelaide, Brisbane, Melbourne, Canberra and Perth.

“Rents in Tasmania are now on par with the rest of Australia, however average Tasmanian households earn over $300 a week less than mainland households,” SGS partner Ellen Witte told ABC News.

“With over 8,000 low-income households already in housing stress, rental unaffordability is now rising up the income ladder, increasingly impacting average working families.”

Airbnb’s Australian head of public policy, Brent Thomas, says the short-let industry is being scapegoated over the city’s lack of affordable rentals, instead blaming “massive amounts of people moving in here to Tasmania and not enough housing being built, more university places being opened up and not enough houses being built”.

“I think there’s a supply issue which is overwhelmingly being driven by other macro factors,” he argued at an inquiry earlier this year.

“What concerns us is when our hosts are unreasonably scapegoated for a problem that has much, much bigger drivers.”

Cameron Kusher, head of research at property analysts CoreLogic, told said there were a few factors involved in Hobart’s rising rents.

“A lot of people want to move to Hobart and I suspect there has been a removal of pre-existing rental stock into the short-term accommodation sector, which is a trend we see all over the country,” he said.

“There is a lot of demand for housing in the city but not much being built, which results in an escalation of rental costs.”

The combination of rising rent and low income growth had created “unprecedented hardship” for those seeking affordable accommodation, according to Shelter Tasmania’s Pattie Chugg.

“Rental affordability in Tasmania has fallen to its lowest point since the index began in 2015,” she said.

People in Hobart earn on average $30,000 less per year than Sydney residents, but the gap in the cost of rents between the cities has narrowed.

The report found that people on welfare simply could not afford to rent in most capital cities anymore, with one of the most vulnerable groups are single old-aged pensioners.

The University of Tasmania has announced it has bought a city hotel to help ease the shortage of affordable accommodation for its students.

About Kate Jackson

Kate Jackson
Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: [email protected]

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