City rent pressure to grow

Bleak view for struggle street

THE cost of renting a house in Hobart fell slightly in 2020, but is expected to rise again.

CoreLogic’s Rental Review for the December 2020 quarter shows the median rent for a house in Tasmania’s capital sits at $460 a week, down 1.2 per cent on 2019.

However, prices started to increase again towards the end of the year, going up by 2.1 per cent between September and December alone.

It now costs 36.5 per cent more, about

$165 a week, to rent a house in Hobart than it did a decade ago, the report shows.

And it is cheaper to rent a house in Melbourne, Perth, Brisbane and Adelaide than Tasmania’s capital. Canberra is now the most expensive market with a median rent of $586 a week, followed by Sydney and Darwin.

Welfare advocates say Hobart is still the least affordable city to rent in the nation because of the percentage of the average weekly wage needed to pay for housing.

CoreLogic said regional markets outperformed capital cities in the past three months of 2020.

“COVID-19 not only disrupted how we live, but also reshaped housing demand as accommodation preferences swung towards lower density options,” CoreLogic’s research director Tim Lawless said. “Higher density housing markets have seen less demand during the pandemic; a trend that has been amplified by stalled overseas migration and remote working opportunities luring residents further afield.

“Whether this trend has some longevity is yet to be seen, but international borders are likely to remain closed for some time yet, and for many, remote working conditions have proved to be productive.”

Australia’s dwelling market recorded its largest monthly increase in rental rates since 2010 in December – up 0.6 per cent over the month.

The rental snapshot follows a new year jump in Hobart’s median house price.

Figures showed the median house price at the start of January sat at $590,000, up $20,000 from December 2020.

Real Estate Institute of Tasmania president Mandy Welling said the jump was likely driven by recent sales over the $1m mark rather than an overall increase in home values.

But a lack of housing supply will force prices up, she said.