Housing market stress

What’s needed to relieve pressure post-COVID

ONGOING, targeted income protection and reducing Tasmania’s reliance on a limited number of industries for jobs will be key to mitigating the impacts on the state’s housing market post-COVID, says a new report.

The Australian Housing and Urban Research Institute released its latest report on Thursday, which examines the COVID-19 impacts on regional housing markets and communities, focusing on Tasmania as a case study of a regional economy.

The report was compiled by a team of researchers from the University of Tasmania, including lead author, Julia Verdouw. It found regional housing markets so far have experienced few serious consequences as a result of the pandemic and Tasmania’s housing market was already experiencing substantial affordability pressures beforehand.

The five major capital cities’ combined property prices index decreased by 1.45 per cent while the combined rest of state regions increased by 3.77 per cent by the end of November 2020.

The report said specific recovery policy interventions for Tasmania should include: ONGOING, targeted income protection for households overexposed to job loss and housing stress. DIVERSIFICATION of employment opportunities to reduce over-reliance on specific employment industries.

NATIONAL leadership to address housing supply gaps and market failure, including largescale investment in secure, affordable housing for lowincome Tasmanians, and targeted support for households in housing stress.

“Government strategies to stimulate employment in local economies and establish strategic and targeted income protection measures for vulnerable groups will both need to be a high priority in underpinning regional housing stability,” Dr Verdouw said.

“The pandemic gave us an opportunity to see how much capacity our Australian and state governments have to work well together when they need to and there’s the political will.”

The report found Tasmania’s economy relied “disproportionately” on industries such as tourism, arts and culture and higher education – all industries which had been particularly affected by COVID-19. It also found JobKeeper and other income supplements had buffered the effects of job and income losses and the full wind back of these supports would “expose people to housing risk.” Demand for housing in regional areas such as Tasmania was “most likely due to regional living being perceived as ‘safer’ than cities in a pandemic.”

“This is putting upward pressure on dwelling prices while lowering vacancy rates and reducing affordability in regional Australia,” said Dr Verdouw.