Tasmanians grapple with higher rents

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Households in Hobart are facing moderately unaffordable rents as Tasmania’s capital city topples Sydney as the least affordable city to rent in the country, according to the latest release of the Rental Affordability Index (RAI). 

“[Hobart] is in a housing gridlock,” Ellen Witte, a partner at SGS Economics and Planning said.

Witte said that rental affordability in Hobart further declined over the winter. As a result, the average-income household is now spending 30% of its income on rent, which subsequently makes saving for a deposit on a mortgage difficult.

The RAI, which is released biannually by National Shelter, Community Sector Banking, SGS Economics & Planning and the Brotherhood of St Laurence, is an indicator of the price of rents relative to household incomes based on new rental agreements.

An RAI of 100 and below reflect that households would be required to spend up to 30% of their income on rent, while an RAI of 100-120 indicates that households are facing moderately unaffordable rents. 

Greater Hobart hit an RAI of 101 in June 2018. This means that median rents in metropolitan Hobart are now unaffordable, even to median-income rental households.

National Shelter Executive Officer Adrian Pisarski said that the market conditions remains poor, with little or no improvement for low- and moderate-income renters in the capitals, and shows poor affordability in the regions.

“It is clear to National Shelter we need a national housing strategy to help improve the dire situation far too many renters across Australia experience,” he said. 

“Compared to improvement in purchase affordability, renters are doing it tough. While we have many housing markets in Australia, none of them are positive for renters. We need a multi-party commitment to improve rental affordability over the long term.”  

Other Australian cities, including Sydney, saw improvements in rental affordability. In many cases, however, the gains did not reach low-income households.

“Looking beneath the headline figures, rental stress is affecting the majority of very low-income households in Australia. Pensioners and single parents are hit particularly hard.”,” said Andrew Cairns, CEO of Community Sector Banking.
Conny Lenneberg, executive director of the Brotherhood of St Laurence, had a similar sentiment, noting the struggles many Aussies have to go through to achieve a decent home. 

“High rents are pushing unemployed people on very low Newstart payments into deeper poverty,” she said. “Jobseekers are forced out to the urban fringes of our cities to find suitable accommodation, but that places them far from jobs and public transport connections. Housing-cost pressures mean some renters on Centrelink are being pushed into homelessness. We need to raise Newstart and its very modest rental supplement as a priority.”

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