The latest Rental Affordability Index shows that rental affordability in Hobart has fallen to its lowest level since the Index began in 2015, with the trend spreading across the State. The upward trend shown by the Index reinforces the need for better long range planning for our State’s housing needs and increasing the supply of public and community housing. Read more…
The latest Rental Affordability Index shows that rental affordability in Hobart has fallen to its lowest level since the Index began in 2015, with the trend spreading across the State. The upward trend shown by the Index reinforces the need for better long range planning for our State’s housing needs and increasing the supply of public and community housing.
The RAI reveals the reality of renting across Tasmania by monitoring the proportion of income spent on rent and is sponsored by National Shelter, Community Sector Banking, the Brotherhood of St Laurence and SGS Economics and Planning.
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Shelter Tas media release: Hobart least affordable capital city in Australia, latest Rental Affordability Index confirms
National Shelter media release: Hobart nosedives to Australia’s least affordable capital to rent, with income growth failing to meet soaring prices
Media Release Wednesday 23rd May 2018
Tasmania’s peak body for housing and homelessness continues to be concerned at the escalating levels of unaffordable rents, highlighted by the latest Rental Affordability Index (RAI) produced by SGS Economics & Planning.
“Rental affordability in Tasmania has fallen to its lowest point since the Index began in 2015. Hobart now outstrips Sydney as the least affordable capital in Australia with Tasmanian incomes failing to keep pace with soaring rental prices. The combination of rising rent and low income growth has created unprecedented hardship for many people seeking to find an affordable home”, Shelter Tas Executive Officer, Pattie Chugg said.
The RAI reveals the reality of renting across Tasmania, as it is the only index of its kind that compares household incomes with the cost of renting. The index is showing an increasing trend of rental stress across the state, where the households on the lowest 40% of incomes pay 30% or more of their income in rent.
“Rents in Tasmania are now on par with the rest of Australia, however average Tasmanian households earn over $300 a week less than mainland households. With over 8,000 low income households already in housing stress, rental unaffordability is now rising up the income ladder, increasingly impacting average working families”, Ellen Witte, Partner at SGS Economics and Planning said.
“The results for Hobart are a real wake-up call. There has been a single-minded focus by State Government on population growth, but a complete lack of vision of where this growth needs to go and how all households are going to be accommodated. Renting households, many of them working families, are now paying the price”, Ms Witte said.
The situation in greater Hobart has deteriorated over the past year, with even the average household now on the brink of housing stress, paying 29% of their income on rent. The problem isn’t confined to Hobart, as the decline in affordability for average households is increasingly felt in both Launceston and regional towns in the South like New Norfolk, Geeveston, Huonville and Cygnet.
“While the impact on average households is concerning, it is masking the grim reality that those on low incomes are facing an increasing risk of homelessness across Tasmania”, Ms Chugg said.
In regional North and North West Tasmania, rental homes in Devonport and Burnie are moderately unaffordable for low income Tasmanians such as single pensioners and single working parents on benefits. Across Tasmania, low income earners are being forced out, further away from jobs with poor transport options, or into severely overcrowded dwellings, entrenching their disadvantage.
“In such a competitive and unaffordable rental market, many low income earners must make impossible choices between essentials such as food and heating or having a home. Single parent working families, young people and aged and disability pensioners are the worst affected, paying up to 80% of their income on rent”, Ms Chugg said.
The lack of affordable and safe housing is the biggest cause of homelessness, and we know that homelessness is increasing. On any given night 1,622 Tasmanians have no place to call home. We know that young people are disproportionately affected by homelessness, making up 52% of homelessness services’ clients. We can and must do better”, Ms Chugg said.
“A strong economy must be built upon foundation of secure homes for all Tasmanians, however the rental affordability crisis is pushing out vital workers like those in tourism and hospitality from areas where they are needed the most. We must also plan ahead for our housing needs with an integrated approach to overall population growth and State economic development”, Ms Witte said.
“There are multiple policy levers at the Government’s disposal to address the housing crisis and work together with the development sector, for instance in regard to build-to-rent. Fact is, increasingly more households rent for the long term, as they can no longer afford to purchase a home, so there is a need to ensure renting is a sustainable, secure and affordable living option”, Ms Witte said.
“Tasmania’s deepening shortage of affordable and social housing has serious implications for the Tasmanian community as a whole as it undermines our economy’s ability to attract and retain a skilled workforce, and directly impacts our community’s health, education and overall wellbeing”, Ms Witte said.
“The benefits of our growing economy must be shared. With the State budget just around the corner, Shelter Tasmania repeats its call for the $60m in stamp duty windfall from the booming property market to be invested in new social housing. Tasmania needs at least 150 new public an community housing dwellings each year, which is the best way to guarantee that housing will stay affordable in the long term”, Ms Chugg said.
About the Rental Affordability Index:
National Shelter, Community Sector Banking, SGS Economics & Planning and Brotherhood of St. Laurence have released the Rental Affordability Index (RAI) biannually since 2015. The RAI is an easy to understand indicator of the price of rents relative to household incomes based on new rental agreements.
An interactive map of the RAI at the small geographical area level can be found at the following website:
About Shelter Tasmania:
Shelter Tasmania is the peak body for housing and homelessness. For further information on Shelter Tasmania’s priorities for the State Budget, please see the submission on our website.
For more information and comment, contact:
Shelter Tas, Executive Officer
M: 0419 536 100
SGS Economics and Planning, Senior Associate
M: 0421 372 940
Hobart has nosedived to become Australia’s least affordable capital city to rent, with income growth failing to meet soaring rents, according to the May Rental Affordability Index (RAI).
With an RAI of 102 in the December quarter, greater Hobart is now the least affordable capital city in Australia – knocking Sydney from its perch. Rents in Hobart are now unaffordable to even average income households. Read more…
Shelter Tas appreciates the opportunity to comment on the Draft Residential Housing and Supply Bill 2018 and supports the proposition of releasing suitable parcels of Crown Land for the
development of affordable housing. As the peak body for housing and homelessness in Tasmania we applaud the Government’s commitment to ongoing engagement with the sector on these initiatives.
We are encouraged that legislation in support of the development of affordable housing is being proposed. While the Bill applies only to Crown Land, it highlights the relevance of the planning system to the supply of housing and affordable housing. Across Australia progressive approaches to addressing housing needs are being pursued through planning systems. This initiative provides an opportunity for Tasmania to also begin to modernise its planning system to help deliver much needed affordable housing. It is also a feature of the National Housing and Homelessness Agreement currently under negotiation. We therefore repeat our call in previous submissions to the reform of Tasmania’s planning system to make it clear that planning matters should include providing for housing diversity, social mix and housing affordability. Read more…
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