Hobart rental market now earmarked as ‘unaffordable’
Hobart has become Australia’s most expensive city to rent in, according to new data, which revealed that the average household in the Tasmanian capital is spending at least 30 per cent of their income on housing costs.
The data comes from the Rental Affordability Index (RAI), which is an annual indicator of the price of rents relative to household incomes and is based on new rental agreements.
Released by the National Shelter, Community Sector Banking, SGS Economics and Planning and the Brotherhood of St Laurence, a score of 100 and below on the RAI shows households on average incomes would be required to spend at least 30 per cent of their income on rent.
The index revealed that Greater Hobart is the only capital city where rental affordability has dropped below the critical threshold of 100, having fallen to an RAI score of 93 in June 2019.
This puts the city into the “unaffordable” category.
Commenting on the finding, Ellen Witte, partner at SGS Economics and Planning, said, “Hobart is in the midst of a rental crisis, the worst in the country.”
She said rents have been increasing by 10 per cent per annum over the last three years.
“No matter how hard you work, you won’t be able to keep up with price rises like this. The market is failing and there is an urgent need for the government to intervene,” she continued.
Ms Witte noted a lack of new supply, while stock is also being lost to the short-term holiday accommodation market.
“The rights of renters are weak, and the Tasmanian Residential Tenancy Act needs to be reviewed like Victoria has done.”
The second least affordable capital city for renters is Greater Adelaide.
Its score of 113 surpassed Sydney’s score of 119.
According to the RAI, a score of 100-120 indicates households are facing moderately unaffordable rents.
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