Rental affordability has crashed nationwide, with tenants in many cities and regions faced with prolonged periods of rapidly rising rents.
The latest Rental Affordability Index (RAI) released on Tuesday shows rents escalating faster than household incomes across the country.
Hobart is the county’s least affordable city to rent a home in, with experts telling The New Daily that lack of supply is pushing up prices.
A grim outlook for would-be-renters
Laura, who did not want her last name published, wasn’t expecting her move from Melbourne to Hobart to be such a painful ordeal.
After landing a new job in the Apple Isle, she decided to secure a rental before relocating in August.
Laura spent weeks trawling websites trying to find something in her price range.
When she had no luck, she resorted to a Facebook group that put prospective renters directly in touch with home owners. She eventually locked in a place to rent.
“You can’t even go through the traditional means to find a place,” Laura told TND.
“It’s super anxiety-inducing. I mean, if you don’t find a place, the alternative is Airbnb or staying with people you know and eventually outstaying your welcome.”
Since 2016, the median rental rate in Hobart has grown by 60 per cent (consistent across dwelling sizes). It is now 11 per cent higher than the Melbourne median, despite the average rental household income being 18 per cent lower.
Robbie Yeoland, department manager at real estate company Knight Frank, told TND that several issues are driving up the cost of rentals in Hobart.
“It’s not just a lack of social housing,” she said, adding Airbnb was also a big problem.
“After COVID, we’ve had a lot of migrants coming into the state, which puts pressure on the rental market because we don’t have a lot of available stock.”
The RAI report says that investors have pushed out would-be home owners across the nation, so more households with middle to higher incomes are renting for longer.
Ms Yeoland said that pressure on supply increases prices because of market competition, leading desperate renters to offer extra cash to secure a property.
“People are frustrated at the number of applications they have to make before being successful,” she said.
The rental crisis isn’t limited to Hobart.
The RAI reveals that regional areas have been the hardest hit.
The worst affected states are Queensland, Tasmania, and Western Australia.
The regional areas of Queensland and Tasmania are now at their most unaffordable in the period measured by the RAI.
“More and more regional households are struggling to pay their rent and key workers are unable to access housing, especially in the regional areas of Queensland, Tasmania, NSW and Western Australia,” report lead author and SGS partner Ellen Witte said.
Capital cities
Rental affordability across Sydney has steadily declined in the past year following a period of improvement since 2017 – particularly during 2020 after the onset of the COVID-19 pandemic.
Affordability in Melbourne has begun to decline after the decade-best improvement that was achieved in 2021.
And in Brisbane, after four years of improvement between 2015 and 2019, rental affordability has declined over the past two years.
Data shows that 42 per cent of all low-income renter households are in rental stress, compared to 35 per cent in 2008.
And in some inner-city areas, apartments are sitting vacant as an investment. For investors, vacant properties are often held for long-term capital gains. This reduces the availability of rental properties to households.
Solutions urged
The Labor federal government is being urged to put negative gearing and capital gains tax discount reforms back on the agenda to ease Australia’s housing crisis.
With his hometown of Hobart having the least affordable rents in the country, independent MP Andrew Wilkie said it was time to reform taxes that unfairly benefited property investors.
“It is still the case that investment property owners and investors have an unfair advantage over people who are just wanting to put a roof over the head of themselves and their family,” he said.
National Shelter chief executive Emma Greenhalgh said governments needed to take action to help low-income Australians secure a roof over their heads, including boosting Commonwealth Rental Assistance and other government income supports such as JobSeeker.
Ms Greenhalgh also said a rental cap should be considered, along with removing no-grounds evictions and building 25,000 social and affordable homes annually.
Mr Wilkie supported some of these measures and said stronger regulations on short-term holiday rentals were needed.
Brotherhood of St Laurence research director Professor Shelley Mallett said declining housing affordability threatens the viability of essential services.
“Key workers in fields such as education and healthcare find it difficult to rent in communities they serve.”
– with AAP
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