REIA says state's housing affordability improving, rentals worsening

Housing affordability might have improved in Tasmania in the September quarter, but rental affordability has declined following positive signs in the previous quarter.

A new report from Adelaide Bank and the Real Estate Institute of Australia has found that the proportion of income needed to meet home loan repayments decreased to 23.3 per cent, equating to a 0.6 per cent decrease on the June quarter and a 0.5 per cent decrease on the September quarter in 2016.

Real Estate Institute of Tasmania president Tony Collidge said this could largely be attributed to sales occurring in the North, driven by cheaper house prices.

“The properties [in the North] that they’re buying are at a significantly lower price than in Hobart,” he said.

“That would mean that the loan amounts that have been taken to buy those properties would actually bring the whole average down.”

A total of 386 Tasmanians purchased their first home in the quarter, too.

While this was an increase of 1.6 per cent on the previous quarter, it represented a decrease of 3.3 per cent when compared to the September quarter last year.

A more sobering figure was the decline in rental affordability in the state.

The proportion of income needed to meet median rents increased to 26.3 per cent, which was an increase of 0.5 per cent over the quarter and an increase of 2.3 per cent on 2016’s September quarter.

Mr Collidge said this was due to a shortage of houses in Hobart.

“Hobart at the moment is somewhere between 3000 and 5000 homes short of meeting market, rental and affordable housing demand,” he said.

“That’s putting huge pressure on rents, it’s putting huge pressure on house prices because the number of properties for sale are down by about 60 per cent on what they were two years ago.

“To me, the election that’s coming up shortly has really got to focus on how we can quickly solve this problem. We can’t afford to sit back and wait.”

Shelter Tasmania executive officer Pattie Chugg said the report’s findings around the rental market in Tasmania were “disturbing”.

“The more that households have to pay on rent, the less they have to put towards essential items, which leaves people with very cruel choices around paying for rent, transport, food and other basics,” she said.