Covid drives down rents

Affordability report reveals ‘great relief for tenants’

HOBART rents are falling the fastest of any capital city in the country, according to a new report.

The ANZ-CoreLogic Housing Affordability report focusing on the rental market shows Hobart joined Sydney and Melbourne in having suburbs with the largest value declines.

Among the top 20 suburbs across the capital cities for rental declines, 11 were in Sydney, five were in Melbourne, and five were in Hobart.

Rent values across Hobart had the steepest rate of decline of the capital markets from March to June, falling 2.3 per cent over the period.

The biggest decline was in Battery Point, where rents fell 5.6 per cent, followed by South Hobart and Lenah Valley, both 4.8 per cent.

Rents declined 4.7 per cent in North Hobart, New Town, Hobart and Sandy Bay, 4 per cent in West Hobart, 2.6 per cent in Kingston and 2 per cent in Bellerive.

The report said of the decline for Hobart, where rental markets have been the most unaffordable of the capital cities since December 2018, the compounding effects of COVID-19 could be “a great relief for tenants”.

The report said there would be “opportunities” for investors in markets including Hobart “where Airbnb stock may be reverted back to the shortterm rental market”.

The report said the pandemic and its associated economic shock would have longlasting impacts on housing affordability.

However in her introduction to the report CoreLogic head of research Eliza Owen said the pandemic alone was not enough to have a longterm impact on housing affordability in Hobart.

“For relatively unaffordable markets like Hobart, broadbased affordability measures should be considered for longer term improvements in affordability, rather than relying on a global pandemic to reduce demand,” she said.

Hobart continued to have by far the highest proportion of income required to service rent, at 34 per cent.

In contrast, Tasmania’s housing sales market is travelling steadily.

According to the Real Estate Institute of Tasmania, Hobart house sales jumped by 20.8 per cent in a month as restrictions eased. Launceston experienced a more modest 5.6 per cent increase in sales, while a 17.2 per cent fall was recorded in the North-West.