Rush of mainland buyers to Tasmania's real estate market 'still to come'

Rents in Tasmania have gone up by 30 per cent over a decade.
Rents in Tasmania have gone up by 30 per cent over a decade.

It's perhaps never been better in Tasmania to be a homeowner but if you are a renter, it has perhaps never been worse.

The median price for a house in Tasmania was $510,000, according to the most recent quarterly report from the Real Estate Institute of Tasmania.

The median was $510,000 in Hobart, $356,110 in Launceston, and $305,500 in the North-West.

The median rent for a Tasmanian home was $415.

It was $550 in Hobart, $335 in Burnie, $340 in Devonport, and $390 in Launceston.

Of the four locations, Launceston had the highest rent increase for the quarter compared to 12 months beforehand with a 18.2 per cent rise.

Winding the clock back six years, the median house price in Tasmania was $320,000 at the end of 2015.

The median was $290,000 in Launceston and $260,000 in the North-West.

The median asking price for a rental across the state was $290.

The median was $405 in Hobart, $250 in Burnie, $260 in Devonport, and $285 in Launceston.

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Tenants Union of Tasmania principal solicitor Ben Bartl said there had been a steady increase in inquiries to the office this year.

He said tenants were typically stuck wearing high rents because there was little choice for them in the market.

"In most cases, tenants don't feel that they can stand up for their rights and say that a proposed rent increase is unreasonable," Mr Bartl said.

"Tasmania is not a good place to be at the moment if you are a renter."

FEARS FOR THE FUTURE

More than 1600 households across Tasmania will be affected by the expiration of National Rental Affordability Scheme agreements, including 300 households this year.

Seventy-six year old pensioner Eileen Craigen has been renting a unit which is part of the scheme in Newnham for the past nine years.

Her unit will soon be listed on the market and she has little idea what will happen once it is sold.

Under the scheme, she pays $371 a fortnight in rent from her fortnightly pension of $1050.

A similar unit close to her has been put on the market, advertising a weekly rental yield of $360 - a price she would be unable to afford.

"This is all I've got at 76 years of age," Ms Craigen said.

"I never thought I'd be in this position at this stage of my life. It's a shock to the system."

Mr Bartl said there were already 4144 applicants on the state's social housing waiting list.

This had increased from 3425 in June 2020.

"Expressed in another way, there has been a 21 per cent increase in one year," Mr Bartl said. "There are another 900 people who will lose their NRAS homes over the following two years which means the waiting list is likely to rise."

He said during the state election, the government promised to build 3500 new social housing properties by 2027: "But we are now in 2021," he said.

"We have this drip of social housing when what we need is a flood of social housing.

The waiting list for social housing has increased by 20 per cent over 12 months.

The waiting list for social housing has increased by 20 per cent over 12 months.

PARALELLS WITH 2003 BOOM

Harcourts Burnie property consultant Andrew de Bomford said he was dealing with the most enquiries he'd ever had from Sydneysiders of his 20-year career.

"And I'm seeing a lot of people from Hobart looking to invest because they can't get in down there," he said.

Mr de Bomford said it was difficult to keep up with the amount of email enquiries on properties - a number of these asking for a contract without having even viewed the property.

"I don't think we've seen the mainland rush yet," he said.

"Once the borders go down and people can travel, I think then we'll see it.

"We're hearing it all the time that people have a five-year plan and they want to get into the market down here because they can afford to do it.

"Mind you, prices are getting out of hand and they are going up at a rate of knots.

"I was around during the 2003 boom and that was mainland-driven."

Mr de Bomford said a majority of listings were put on the market with an offers over tag as it was difficult to put a definitive price on a property.

"A majority of properties that we are selling end up in competition with multiple offers and going 10, 20, 30, 40, 50, 60 or 70,000 above," he said.

"I think we should therefore be pushing towards an auction market because it's fairer for the buyers and gives them more time to get through the property."

RENTAL STOCK SQUEEZE

Five University of Tasmania academics penned a paper for the Australian Housing and Urban Research Institute this year titled on regional housing recovery from the COVID-19 pandemic.

It noted rent in the state had increased by at least 30 per cent over the past decade.

The paper concluded regional markets were experiencing increased demand which had put upward pressure on prices and reduced affordability.

"These housing market circumstances may have been pre-existing and were exacerbated by the COVID-19 crisis," it said.

"Data also indicates there has been a slowing of investor activity; mostly likely reflecting lower investor confidence in the wake of fewer incentives to invest in property; increased numbers of tenants who owe arrears, policy which has protected tenants, and lower migrant housing demand."

The paper said landlords had felt the burden of COVID-19 emergency measures designed to protect tenants.

"These circumstances have decreased incentives for investment, in a market and policy context that heavily relies on private rentals to accommodate low-income households," it said.

In a survey of landlords had asked whether they intended to hold their investment property over the next 12 months, 9 per cent of respondents said they intended to sell.

With rental vacancy rates already at an all-time low in the state, Tasmanian Residential Rental Property Owners Association president Louise Elliot said it would be bad news for tenants should this amount of landlords sell up.

She said this would mean 3600 rentals would be sold, and 82.5 per cent of these sales went to owner-occupiers in line with trends, then 2970 rentals would be removed from the market.