Hobart Property Management Company Says: Rental Home Shortage Crisis in Tasmania

Historically low rental home shortage in Hobart, Tasmania is creating turmoil for both owners and tenants, says top property management company.

Hobart, Australia – January 31, 2018 /NewsNetwork/ —

When does too much of a good thing become a bad situation? With the upswing in the property market in Tasmania’s small capital city projected to continue into a third year, rental property experts like Baxton Property Management in Hobart are starting to see cracks in the wall of the rental market there caused by a shortage of rental supply, and soaring property prices for those trying to add to the rental stock pool.

Vicious circle in Rental Property Market

Baxton CEO Kellee Pennicott said a shortage of rental accommodation was causing vacancy levels to drop to all-time lows. At the same time, investors were chasing higher rental yields based on both the demand caused be a steady influx of new residents seeking accommodation and the soaring property prices in Greater Hobart. This was driving rents right through the few remaining rental roofs and the rental market was losing its balance. Pennicott said in the absence of sufficient new rental property development, there appeared to be no immediate solution.

Rental Vacancy Level Hits a Low

The Hobart area saw its rental vacancy level hit a low of 0.3% in December 2017. And to top it all, Pennicott said there were now rumblings in the rental market that investors who grabbed the chance to buy investment properties during the local property boom were dissatisfied with the rental yields that they are getting, largely because of the price they had to pay to acquire it.

“It now appears some of those recent investors are getting ready to flip the properties they bought in the past two years,” she said. “If this happens it will severely impact on the already struggling rental market.”

Which means: Rental vacancy level in Hobart even tighter going into 2018

Hobart Rentals Net Third Highest Yields in 2017

Meanwhile most property market analysts continue to look at Hobart as being one of the hottest property markets in Australia, seeing it continue its boom well into 2018, before possibly cooling down a bit the following year.

In the December quarter last year, Hobart notched the third highest rental yield of any state capital in Australia It recorded a 5.34 percent yield for that period, turning in results that were only lower than the ACT capital city, Canberra’s 5.80, and Darwin’s 6.67. All three were way above Sydney’s 3.08, and Melbourne at 3.20., which had the lowest rental yields.

Boosted by the high demand, owners have pushed up the average weekly rent for all houses in Hobart by 22.1% in the last three years, with 2017 accounting for 9.3% of that rise. The greatest demand has been for three-bedroomed houses, resulting in the weekly rent rising in the past three years by close on 30 percent. Again 2017 saw the biggest hike, with rent increasing by about 15%. Tenants who faced rents of about $300 a week at the start of the three year period are now facing a median price of around $400, with rents in some of the more prized areas getting close to $600 for one week, according to the latest figures.

Rise in Property Prices

Like rents, house prices in Hobart have risen astronomically in Hobart in the past years, showing increases of around 25% in some sought-after areas. Also fuelled by a shortage of supply in the least populated Australian capital, house prices of $1million are no longer an oddity in the Hobart area, and the few still available to be added to the market, are changing hands within a few days or weeks of being listed. This hike in the price of the properties had added pressure on new property investors to raise the rent to achieve their required rental yield, according to Pennicott.

In another development, the size of the pool of available houses to purchase was also being drained as a result of the rental demand. Some owners were deciding not to sell their properties, despite the high prices attainable. Instead they were contributing to the shortage of traditional rentals by adding to their income in alternative ways. This was giving rise to a surge in couch renting, or making use of the Airbnb network.

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With 100 years of collective experience in the property management sector, Baxton in Hobart has been become attuned to the changes that occur in both the investment property market and the support services that function alongside them. She said property management has become a more essential service than ever for Hobart owners and tenants caught in the rental maelstrom who are looking for a more stable income or accommodation.

Contact Info:
Name: Baxton Media
Email: media@baxton.me
Organization: Baxton Property Management Sandy Bay 7005
Address: 147 Sandy Bay Road , Hobart, Tasmania 7005, Australia
Phone: +61-3-6220-1900

For more information, please visit https://pm7005.baxton.me

Source: NewsNetwork

Release ID: 292888