Hobart rental prices are stable or growing

A growing number of Hobart suburbs are recording price increases.

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Hobart renters will be set a tough challenge when looking for a home that costs less now than it did at the start of the year.

The latest PropTrack rental figures show houses in only three greater Hobart suburbs cost less in May than they did in February.

Old Beach rents dipped by 5 per cent, Hobart city by 3 per cent and West Hobart by 1 per cent. In Old Beach this change was worth $10, in Hobart $33, and in West Hobart $25.

Of the 34 suburbs where house rents were analysed, 16 had growth figures and 15 had no change. For units, there were twice as many growth suburbs (13) than areas with a 0 per cent change (6).

In the unit corner of the market, just two suburbs recorded decreases in the median rental price — Rokeby and Kingston.

Both areas were down by 2 per cent over the three-month period. However, both saw growth between 2-4 per cent on a year-on-year comparison.

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Securing a rental house for under $500 per week is becoming harder and harder.

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The largest change in unit prices by percentage was in Moonah, which became $30 per week more expensive by growing 7 per cent. Battery Point rental asks increased by 5 per cent, while Lenah Valley and Bellerive grew by 4 per cent.

The largest quarterly change was in Chigwell houses, moving up from $480 per week to $510, a 6 per cent uptick. Blackmans Bay, Dodges Ferry, Mornington and Midway Point all grew by 4-5 per cent.

The most expensive suburbs were houses in Battery Paint ($705), Sandy Bay ($673), Lenah Valley ($623), West Hobart ($620) and Blackmans Bay ($615).

Eleanor Creagh, REA Group senior economist.

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REA Group senior economist Eleanor Creagh said broadly Hobart was experiencing more upward pressure on rents than regional Tasmania.

“In Hobart, more than half of suburbs recorded an increase over the quarter to May,” she said.

“Outside the capital, conditions remain a little more subdued. Half of regional Tasmanian suburbs had flat or falling rents.

“People in regional areas might find a slightly easier path than those in the tighter and potentially more challenging Hobart rental market.”

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SQM Research figures show a tightening vacancy rate in May.

Last year there were 377 vacancies in Hobart, at a 1.3 per cent rate, but this year the number has slipped to just 177 and a 0.6 per cent vacancy rate.

0.6 per cent is the second-tightest rental vacancy rate in Australia behind only Darwin at 0.5.

A healthy rate is considered to be 3 per cent, which Hobart has not recorded since it reached exactly 3 per cent in April 2012.

Peterswald business development manager, Dani Shields, described greater Hobart’s vacancy rate as “significantly lower than the national average”.

Ms Shields said this was an indication of the shortfall of rental properties relative to demand and a competitive market for tenants.

She said it was “very” challenging to find a house for under $500 in Hobart.

“Over the last 10 years, finding a rental property for under $500 per week in Hobart has become increasingly difficult,” Ms Shields said.

Dani Shields, Peterswald business development manager.

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“While there are some properties currently available at this price point, they are limited and often consist of smaller units or properties located further out.

“The shortage of affordable rentals means tenants often face strong competition, with properties being snapped up within a matter of days.

“This makes it difficult for individuals and families to secure budget-friendly housing in Hobart.”

While the overall shortage of rentals affects most of greater Hobart, Ms Shields said it often comes down more to the type and quality of the property rather than a single location that needs more rentals.

She said well-presented homes in good, clean condition attract strong interest wherever they are.

“However, we have consistently seen particularly high numbers of inquiries on properties in Sandy Bay, Bellerive and Hobart’s northern suburbs reflecting strong demand in these suburbs for quality rental homes,” she said.

Ms Creagh said rental market conditions in Hobart might favour investors.

She said broadly activity had improved over the past 18 months with new investor loans close to highs not seen in nearly a decade.

“Relatively tight rental markets are one factor that encourages this pick up in investor activity,” she said.

“With interest rates moving lower, and expected to move lower again throughout the year, it could bolster investor activity.

“Home values have been softer in Hobart than other capitals in recent years, and the combination of relatively low property prices and rising rents could see Hobart become increasingly appealing to investors.”