ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Hobart Holds Firm as Least Affordable for Renters

77ce7358-ce67-416c-8027-c2da5f9ab6f5

For the second year running, Hobart is the least affordable city to rent in Australia, and Adelaide has overtaken Sydney as the second-least affordable capital, a new report has found.

The Rental Affordability Index is an indicator of the price of rents relative to household incomes based on new rental agreements.

It is released annually by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence.

A score of 100 and below on the index shows that households on average incomes would be required to spend at least 30 per cent of their income on rent.

Greater Hobart is the only capital city where rental affordability has dropped below this critical threshold, falling to a rental affordability index score of 93 in June 2019 and putting the city’s rents in the “unaffordable” category.

▲ The Rental Affordability Index (RAI) is an indicator of the price of rents relative to household incomes based on new rental agreements. Image: Getty Images
▲ The Rental Affordability Index (RAI) is an indicator of the price of rents relative to household incomes based on new rental agreements. Image: Getty Images


According to the report, the median rental household in Greater Hobart has a gross income of $64,500 per annum, with high rents, relative to household incomes, making it the least affordable metropolitan area in Australia.

The main drivers behind Hobart’s continued nosedive are seen as low incomes and an inadequate supply of rental housing, with SGS Economics and Planning partner Ellen Witte calling for urgent government intervention.

“Hobart is in the midst of a rental crisis, the worst in the country,” Witte said.

“There is a lack of new supply, while stock is being lost to the short-term holiday accommodation market.

“The Tasmanian Residential Tenancy Act needs to be reviewed like Victoria has done.”

In March, Tasmania’s Minister of Housing Roger Jaensch released a progress report on the state’s Housing Summit Action Plan, outlining a range of measures being taken to address supply issues in Hobart and around the state.

minister of housing Roger Jaensch
▲ Tasmania's Minister of Housing Roger Jaensch. Image: Simon Sturzaker


Measures already in place include the Housing Land Supply Act 2018, a new process which will see more houses delivered faster through a new fast-track zoning process of surplus government land, aimed at increasing the supply of social and affordable housing.

The first of these sites have been approved in Rokeby, Devonport, and West Moonah.

Adelaide’s ranking as the nation’s second-least affordable capital city—overtaking last year’s runner-up, Greater Sydney—has been attributed to slow income growth compared to other capital cities and rising rents.

And while affordability in some Australian cities, including Sydney, has improved marginally, the situation remains untenable for tenants on Newstart regardless of postcode: in every capital city, they are spending at least 77 per cent of their income on rent.

Community Sector Banking head of relations James Barron said that rental stress is affecting the majority of very low-income Australian households.

“People on Newstart are being hit particularly hard, being pushed to the outer fringes of our cities and away from opportunities for training and employment.

“Even in cities with higher than average incomes and better than average rental affordability, the plight of low-income renters continues to deteriorate.”

ADVERTISEMENT
TOP STORIES
CONTRIBUTE TO THE CONVERSATION
Show Comments
advertise with us
The Urban Developer is Australia’s largest, most engaged and fastest growing community of property developers and urban development professionals. Connect your business with business and reach out to our partnerships team today.
Article originally posted at: https://theurbandeveloper.com/articles/hobart-remains-least-affordable-city