Crisis incoming: $13 added to weekly rents

FoundIt head of research Kent Lardner expects Hobart rents to rise significantly and quickly. Picture: Supplied

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Hobart renters are set to be hit with hikes up to six-and-a-half times higher than the federal government’s modelling, new research shows.

The Treasury estimated that Budget tax reforms, such as restricting negative gearing, would add just $2 to rents.

FoundIt head of research Kent Lardner said the idea of a $2 rent rise is “pure fantasy”, with his figures showing an average forecast in the $12-13 per week range in the coming three months.

In some areas, this would be a larger increase than the market recorded over the past six months.

“And that is the conservative, momentum-only read before the Budget effects fully land,” he said.

“We went looking for the good-news story. No matter how we unpack the data, it isn’t there.

“Every one of the 183 capital-city house markets is forecast to rise. Not one comes in under $2 a week.”

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No.669 Primrose Sands Rd, Primrose Sands, $500 per week. Picture: realestate.com.au

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No.32 Fifth Ave, New Norfolk, $530 per week. Picture: realestate.com.au

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FoundIt’s forecast expects $13 per week to be added to rents in Inner Hobart, including South Hobart, New Town, Dynnyrne, Lenah Valley, West Hobart and Sandy Bay.

Between $11 and $12 increases are expected across the rest of greater Hobart, and in Sorell and Dodges Ferry, too.

Brighton suburbs such as Bridgewater, Gagebrook, Pontville, Old Beach and Otago will rise by $10, the report said.

Harcourts agent Sarah Woolley said if the forecast came to fruition, it would have significant impacts on housing affordability.

Mrs Woolley said household budgets are already stretched to their limits.

“Housing is an essential expense, not a luxury, so swift market changes create enormous financial stress for tenants and those looking to find their next rental home,” she said.

Sarah Woolley, Harcourts Kingborough & Harcourts Huon Valley real estate agent. Picture: Supplied

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Mrs Woolley said Hobart rental prices are already maxing out household budgets.

She said the idyllic 30 per cent rent-to-income ratio is becoming less and less realistic.

“In some cases, it is impossible for renters on current incomes,” she said.

“The increase in rents hasn’t matched the increase in salaries over the years, so households are having to diversify their options to make secure housing affordable again.

“This can mean a pivot towards shared housing, intergenerational living and adult children staying home with parents for longer.

“Renters are already under pressure from how expensive our market has become.

“The answer can’t be ‘move further out’ as this brings in other complications such as a lack of public transport options, proximity to schools, access to services and essential amenities.”

No.30 Fisher Dr, Herdsmans Cove, $540 per week. Picture: realestate.com.au

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FoundIt said the figures masked an even deeper affordability crisis.

“Median-income households are increasingly not in the house rental market at all,” the report noted.

“The median is a floor, not a typical renter’s experience. Houses are stepping out of reach of the median household entirely and on a current trajectory that only gets worse.”

Meanwhile, the latest Market Insight report from realestate.com.au also sounded alarm bells for renters on the back of the government’s tax overhaul.

“By restricting negative gearing and the capital gains discount to new builds, new rental supply may not be added where it is needed most,” REA Group senior economist Angus Moore said.

“This could see more rental accommodation added in outer growth areas that are further from jobs, universities, and other amenities renters typically look for.”

PropTrack March quarter rental figures revealed that it is more expensive to rent a house in Hobart than Melbourne by $40 per week.

Shelter Tas chief executive Pattie Chugg said Tasmanians seeking housing and homelessness support have increased by 41 per cent in the last year alone.