A disability pensioner unable to work due to illness will be forced back into the workforce to make ends meet after his rent skyrocketed in the wake of a booming property market.
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Larry*, who has rented at Riverside for the past seven years, was told just before Christmas his rent would increase by $180 a fortnight, an eye-watering figure he has never seen before.
"It made for a pretty sad Christmas....I have never experienced this level of an increase before in all my years renting," Larry said.
The rental market is being squeezed by booming property prices, which have been driven partly by the pandemic, with ex-pats and mainlanders flocking to Tasmania for its lifestyle, community and relatively COVID-free status (in comparison to mainland states).
A Real Estate Institute Industry of Tasmania quarterly study showed median house prices in Tasmania had jumped to $600,000.
Larry said when he contacted his real estate regarding the increase, the real estate agents told him that the price was going up due to the burgeoning property market. He said it had been a stressful couple of months.
"It has kept me up at night," he said.
Larry said he was hurt and disappointed in the communication he'd received from the real estate after requesting to have the amount reviewed.
"I will have to try and absorb it as much as I can, but I can't really see the light at the end of the tunnel....I think I will have to rely on handouts from places like City Mission," he said.
"It doesn't make you feel good, knowing that you will need to rely on charities, but it's the only way I can see that I will be able to make it stretch."
Larry's son stays at his house a few days a week, which means he requires a two-bedroom home.
"I have looked around at other properties, but there's nothing cheaper, unless you go to a one-bedroom, but I can't do that, my son stays with me and my parents also sometimes stay with me," he said.
Tenants Union spokesman Ben Bartl said rental stress was a prevalent problem, with the average renter under severe stress.
"Prices have pushed up so the average renter is spending 30 per cent of their income on rent. It means that they are more often than not choosing whether to keep the air-conditioning running in summer, or buying the groceries, or paying the rent that week," he said.
Mr Bartl said the long-term rental market had been squeezed in the past by short-stay accommodation, but now it was property prices.
"We are seeing more ex-pat Tasmanians and interstate people buying houses, which is taking supply away from the long-term rental," Mr Bartl said.
Housing Minister Michael Ferguson said the government had a holistic approach to the housing crisis and provided support in incentives. It was also in the process of building new homes to supply the market every year.
"Our record investment of $615 million into social and affordable housing, and homelessness initiatives means that we will build an extra 2000 new homes by 2027," he said.
"That's on top of the 1500 already being built over the next three years, bringing the total to 3500 new homes by 2027 to help our most vulnerable. As the government which has the highest level of investment in housing, we will certainly continue to consider any evidence-based measure that will assist in increasing housing supply or improving housing affordability."
However, Mr Bartl said a solution needed to look beyond constructing new houses and providing financial incentives.
"The problem with incentives, like the First Home Buyers Grant, is that it just pushes prices up. If people are getting an extra $20,000 for their home, then houses just go up by $20,000," he said.
"Building houses takes a long time, it takes time to get approvals, and it's exacerbated by the shortage of builders and building materials."
Larry's rental increase comes into effect next month, and the stress was eating him away, but he was resigned to the fact he would have to scrape to make ends meet.
"I don't think anything will change unless we have a change of government."
Larry will be forced to return to the workforce, despite his GP advising against it, to help make up the shortfall in his budget due to the rental increase. He has suffered from a stress-related condition and was forced out of the workforce due to his illness. His GP advised against working, but Larry has no other choice.
"I have got approval to work 10 hours a week, so I have just signed up to a job agency to find something for me to do," he said.
Housing Minister Michael Ferguson said the government was doing all it could to assist in terms of rental stress and the property market. Support includes the Home Share Program, HomeBuilder, the First Home Owners Grant, along with stamp duty and land tax concessions.
An ancilliary dwelling grant scheme is available to home owners to construct a granny flat on their property that must be used for renters for at least two years.
*Name changed for privacy reasons.
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Caitlin Jarvis
I have worked in the Tasmanian digital/print media for 11 years, spanning two newsrooms. I have developed a keen interest in agricultural, development and education news, as well as issues-based long-form journalism. Contact me at caitlin.jarvis@examiner.com.au
I have worked in the Tasmanian digital/print media for 11 years, spanning two newsrooms. I have developed a keen interest in agricultural, development and education news, as well as issues-based long-form journalism. Contact me at caitlin.jarvis@examiner.com.au
