Property market surge deepens housing crisis

THE Tasmanian Government must create more affordable housing or risk stifling the state’s economic surge and worsening the living conditions of low-income earners.

The TCCI Tasmania Report suggests it will be important for the government to ensure adequate provision of affordable housing into the future or the strong economic growth the state was enjoying would continue to negatively affect low-income earners.

Bank of us CEO Paul Ranson said the Tasmanian property market was countering downturns across much of Australia.

Residential property values rose by 10.5 per cent over 12 months to October.

“Tasmania’s property market is currently reflecting stronger ‘underlying’ demand driven by faster population growth and greater confidence on the part of local buyers,” Mr Ranson said.

“Since investors represent a smaller proportion of the property market in Tasmania than other states, some of the factors contributing to the softer conditions in mainland markets are likely to weigh less heavily in Tasmania.”

But the upswing in the market has continued to push up rents, particularly in Hobart.

Hobart’s rental vacancy rate averaged just 1.5 per cent over the year to the September quarter this year.

The report says the significant tightening of the rental accommodation market, particularly in Hobart, partly reflects more rapid growth in demand for rental housing as a result of population growth.

Immigration to Tasmania is at its fastest since 2004, with many from Victoria and aged 20 to 30.

Overseas migration to Tasmania is higher than at any time in the past 38 years, led by the doubling of international students in three years.

“Hobart is the least affordable capital city in Australia,” Mr Ranson said. “Conversion of part of the rental housing stock to short-stay tourism accommodation appears to have exacerbated this problem.”

The latest Rental Affordability Index shows Hobart’s most vulnerable households are spending nearly 50 per cent of their income on rent.