HOBART rents are falling the fastest of any capital city in the country, according to a new report.
The ANZ-CoreLogic Housing Affordability report focusing on the rental market shows Hobart joined Sydney and Melbourne in having suburbs with the largest value declines.
Among the top 21 suburbs across the capital cities for rental declines, 11 were in Sydney, five were in Melbourne, and five were suburbs of Hobart.
Rent values across Hobart had the steepest rate of decline of the capital markets from March to June, falling 2.3 per cent over the period.
The biggest decline was in Battery Point, where rents fell 5.6 per cent, followed by South Hobart and Lenah Valley, both 4.8 per cent.
Rents fell 4.7 per cent in North Hobart, New Town, Hobart and Sandy Bay, 4 per cent in West Hobart, 2.6 per cent in Kingston and 2 per cent in Bellerive.
A mortgage is cheaper than renting in many greater Hobart regions
The report said of the decline for Hobart, where rental markets have been the most unaffordable of the capital cities since December 2018, the compounding effects of COVID-19 could be “a great relief for tenants”.
However, the report said there would be “opportunities” for investors in markets including Hobart “where Airbnb stock may be reverted back to the short-term rental market”.
The report said the pandemic and its associated economic shock would have long-lasting effects on housing affordability.
Battery Point and Sandy Bay were two of the Hobart suburbs with significant falls in rents form March to June.
However in her introduction to the report, CoreLogic head of research Eliza Owen said the pandemic alone was not enough to have a long-term effect on housing affordability in Hobart.
”For relatively unaffordable markets like Hobart, broad-based affordability measures should be considered for longer term improvements in affordability, rather than relying a global pandemic to reduce demand,” the report said.
Hobart continued to have by far the highest proportion of income required to service rent, at 34 per cent.
In contrast, Tasmania’s housing sales market is travelling steadily, with only a small drop in houses sold and an increase in values during May.
According to the Real Estate Institute of Tasmania, Hobart house sales jumped by 20.8 per cent in the month from April to May as shutdown restrictions eased. Launceston experienced a more modest 5.6 per cent increase in sales, while a 17.2 per cent fall was recorded in the North-West.
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