Hobart, still booming because of an influx of people drawn to the Tasmanian capital by lower property prices and a more relaxed lifestyle, is running even lower on vacant rental accommodation going into 2018. The vacancy rate has hovered around the 1 to 2 percent mark since the newcomers started to expand the pool of tenants looking for rental accommodation, says Baxton Property Management in Hobart. But by December 2017 it had hit a low of 0.3% after starting 2017 at around 2 percent.
For the past couple of years, local residents have snapped up the opportunity to open their homes as rental accommodation, and others have reaped the rewards of interest shown in the island state’s comparatively low property prices by local, mainland and international investment buyers. But the rental stock available is not proving to be enough for those looking to rent.
More Residents and Not Enough Rentals
Hobart, the second oldest city and smallest capital in Australia, has a long tradition of tenancy. Over a third of its properties were already available to tenants in 2011, according to that year’s census. This put available rental accommodation at 6 percent higher than the overall Australian statistic for rental stock back then. But that was before the island state, and Hobart in particular, started to experience an influx of new residents and a resultant boom in the property market. While many of the properties bought by investors continued to be available as rentals, and some new rental opportunities were created, not all of them ended up as rental stock.
The problem for tenants is that only 6,795 properties were available to rent in 2011. And according to the 2016 Census that number swelled only by 201 in the five year interim. Meanwhile, thanks to the boom, the population of Hobart grew by almost 32,000 people in the same period, to reach its current population of 232,000.
Effects on the Rental Market
Rise in Rents: This has left Hobart running very low on available accommodation, and brought with it a considerable rise in rental rates in Hobart. The average weekly rent for all houses in the capital has risen by 22.1% in the last three years, 9.3% of that in 2017. Three-bedroomed houses have been under the greatest demand, pushing the expected weekly rent up by close on 30 percent in the past three years, with half of that rise occurring in the past year. The asking price for a three-bedroomed house in Hobart, which hovered around 300 AUD until the start of 2015 is now topping the 400 AUD mark according to the first figures for January 2018. This latest increase is possibly allied to the influx of students prior to the start of the new academic year at the University of Tasmania in February. And these figure still compare very well with rental rates in other Australian capitals.
Increased competition: With available accommodation at a premium, any vacant rentals elicit a huge response, with long queues of potential tenants forming at viewings in the hope of landing the lease.
Low vacancy levels have placed extra pressure on tenants desperate to find a home, and increased the size of the pool of possible tenants available for landlords. Baxton Property Management in Hobart urges both tenants and landlords to be even more cautious than usual regarding their leases. For tenants, this means making sure that any agreement signed covers the rights and obligations of both parties involved as outlined in the Residential Tenancy Act of 1997. And any extra issues discussed verbally must be included in the agreement.
As far as rental property owners go, Baxton warns that what might seem like a treasure chest of choice does not lessen the need for thorough screenings before choosing a tenant, as should make the wrong choice, it is not possible to evict a tenant in Tasmania without a valid reason even if replacing the tenant seems easy.
Professional rental agents and property management experts like Baxton Property Management have the experience and knowledge to act in the best interests of both property owners and their tenants. For more information, contact Baxton online.
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