Cheap rentals flatline, $400pw options near record low

AFFORDABILITY used to be Hobart’s advantage, but this is no longer the case — especially for renters on a tight budget.
House for sale in the city downtown

Only one in 10 Hobart rentals are priced under $400 per week. Picture: Supplied

PropTrack’s latest Market Insight report shows vanishing options for renters looking for a home for less than $400 per week.

Comparing April this year with March 2020, the percentage of Hobart homes in this price range was just 10.9 per cent of the market — and that’s just 0.2 per cent from the city’s record low, set one month earlier. At the start of the pandemic, about one in three homes were available at this sub-$400 price bracket (32.4 per cent).

Regional Tasmania recorded a similar-sized reduction in affordable options, shifting from 75.2 per cent in 2020 to 39 per cent of the market in 2024.

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Hobart and regional Tasmania have recorded a huge reduction in sub-$400 per week rental listings since 2020.

PropTrack senior economist Eleanor Creagh said strong demand and limited supply have created exceptionally challenging conditions for renters.

She said this was particularly problematic for lower-income households for whom almost no rental properties are affordable.

“Rentals under $400 remain scarce,” she said.

Ms Creagh said the rental market is in “crisis condition”, not just in Hobart but throughout Australia.

“The persistent shortage in the supply of rentals places downward pressure on rental vacancies,” she said.

“As a result of low vacancies, there has been upward pressure on rental prices, which means the share of affordable $400 per week or less properties has declined.

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PropTrack senior economist Eleanor Creagh.

“For low income households, there are almost no properties that are affordable. This highlights the need for rental support and assistance.

“Many households are likely to be spending more of their income on rent, increasing financial stress, and highlighting the critical need for an increase in the supply of affordable and social housing.

“There is no easy fix for easing rental pressures, but increasing the pool of rentals is a sustainable long-term approach — but that takes time.”

Real Estate Institute of Tasmania figures show a three-bedroom Hobart house in 2020 cost $460 per week to rent. In the March quarter of this year, the price was $550.

Over the same period, Launceston increased from $350 to $480, and the North West from $300 to $415 per week.

Real Estate Sign For Rent

A three-bedroom house is $90 per week more expensive now than in 2020, per REIT.

Meanwhile, in the National Australia Bank’s latest Quarterly Property Survey, Tasmania was among the states forecast to see rental price growth: “The average survey forecast for rents in the next 12 months is positive in all states, and growth is expected to accelerate in VIC, QLD, SA, and TAS”.

The survey’s average rental forecast for Tasmania is a 1.4 per cent increase in the next year and 1.9 per cent in two years.

NAB is also forecasting 0.8 per cent dwelling price growth in Hobart in 2024 and 2.4 per cent in 2025.