Pressure rising as rents climb higher in Hobart
Compared to the other capital cities, Hobart recorded the second-highest quarterly growth in March rental prices, according to REA Group's Market Insight report.
The data showed that median advertised rental home prices in Hobart — houses and units combined — grew 4.8 per cent over the March quarter to reach $550 per week.
This was miles ahead of the combined capital city growth figure, 1.6 per cent, and just behind market-leading Darwin at 5 per cent.
Despite the increase, Hobart remains the least expensive capital city to rent in.
Research by REA Group senior economist Anne Flaherty found that the speed of rental growth has accelerated in the first three months of 2025, reversing the trend of slowing growth seen late last year.
MORE: Kylie Kwong's brother's Tassie paradise up for auction
Hone your backhand at home: Landmark to fetch top dollar
Just three properties': Aus rental crisis hits new breaking point
Ms Flaherty said unit rents in Hobart increased by 2.1 per cent over the March quarter to $490 per week, while house rents were up 4.5 per cent over the same period to sit at $585 per week.
She said regional Tasmania's rental prices lifted just 1.1 per cent over the quarter, yet remain 4.7 per cent above March 2024 levels at $450 per week.
Unit rent growth in regional Tasmania held flat over the March quarter sitting at $400 a week, while house rents grew 2.2 per cent over the same period to reach $460 per week, the economist said.
'Looking ahead, the more modest pace of rent growth seen over the past 12 months is expected to continue throughout the rest of this year,' Ms Flaherty said.
Meanwhile, separate research shows that rent hikes are outpacing inflation.
New figures from Money.com.au reveal national rents have surged more than 14 per cent over the past two years, with further increases expected.
The last time rents grew this steeply was during the global financial crisis, but this time the pressures are even more complex — record migration, ultra-low vacancy rates and a shortfall in housing supply are fuelling a surge that's catching millions in its wake.
The website's property expert, Mansour Soltani, said renters were now facing a very different economic reality to mortgage holders.
'Inflation is easing and the RBA is moving closer to rate cuts, but renters are being left behind,' Mr Soltani said. 'There's a growing divide between homeowners who are set to see some relief, and renters who are still copping steep price increases.'
MORE: Historic Salamanca building seeks multimillion-dollar sale
Right by the river, one of Hobart's finest homes for sale
Money.com.au analysis shows rents rising 7.3 per cent in 2023 and a further 6.4 per cent in 2024 — far outpacing the overall CPI rate of 6.6 per cent. If current conditions persist, rents could jump another 18 per cent by 2030.
Last month, a REA Group report into rental affordability put a spotlight on the struggles faced by Tasmanians. It found that a typical household income allowed people to rent only one in five properties listed on realestate.com.au.
Tasmania was named the third-least affordable state for renters.
Angus Moore, REA Group's executive manager of economics, said the challenge is even tougher for those in lower income brackets, with the report finding just 1 per cent of homes would be affordable.
'It highlights the importance of Commonwealth Rent Assistance support for lower-income renters,' he said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
14 hours ago
- Perth Now
The piece of data that could decide next rate decision
Traders, economists and mortgage holders will be locked into the Australian Bureau of Statistics website this week for a piece of data that could determine whether the Reserve Bank cuts interest rates next month. Minutes from the RBA board's last meeting confirmed the central bank was holding out for more signs inflation was on track before cutting again, highlighting the importance of Wednesday's quarterly consumer price index. AMP chief economist Shane Oliver believes an annualised result of 2.8 per cent or below for the RBA's preferred trimmed mean measure would clear the way for another rate cut in its August 11-12 meeting. But anything higher and we could be in for another hold. Dr Oliver predicts the trimmed mean will come in at 2.6 per cent year-on-year, down from the 2.9 per cent figure in the March quarter and close to the midpoint of the RBA's 2-3 per cent target range. "Expect solid increases in prices for clothing, health and travel with a modest rise in new dwelling costs offset by softness in transport and petrol prices, communication, education and insurance," he wrote in a research note. "However, as the RBA has noted, some of the components in the recent monthly CPI suggest upside risk to the trimmed mean inflation." The market consensus is for a rise of 2.7 per cent, which would be higher than the RBA's forecast of 2.6 per cent. Even higher than that and it could cause the market to rethink its near certain odds of an August rate cut. "The money market sees a 98 per cent chance of an August rate cut, which is probably a bit too high," Dr Oliver said. "We would put it at around 80 per cent." On Thursday, economists will gorge on a feast of data as the ABS releases retail trade, building approvals and international trade price figures. The retail print is the last the bureau will produce before it switches over to a more comprehensive measure of consumption, the monthly household spending indicator. "Appropriately, monthly sales look set for one 'last hurrah' with the June update expected to see a robust one per cent gain - the best monthly result since Jan 2024," said economists from Westpac. But the gain mainly reflects a bounce back from soft sales in previous months, they said, as consumers struggle to gain momentum following the loss of purchasing power during the post-pandemic inflation spike. Property analytics firm Cotality will update its home value index on Friday, with prices expected to continue to be propelled upwards as falling interest rates boost buyer demand. Investors on Wall Street are meanwhile optimistic the US will soon reach a trade deal with the European Union. Indices notched record high closes on Friday ahead of European Commission President Ursula von der Leyen's meeting with Donald Trump in Scotland on Sunday. The S&P 500 climbed 0.40 per cent to end the session at 6,388.64 points. The Nasdaq gained 0.24 per cent to 21,108.32 points and the Dow Jones Industrial Average rose 0.47 per cent to 44,901.92 points. Australian share futures were down 5.0 points, or 0.05 per cent, to 8,360. The benchmark S&P/ASX200 index on Friday dropped 42.5 points, or 0.49 per cent, to 8,666.9, while the broader All Ordinaries was down 45.1 points, or 0.5 per cent, to 8,934.3.
Perth Now
2 days ago
- Perth Now
Warning ‘nervous' RBA could hold rates
A big four bank is warning mortgage holders a 'nervous' RBA could hold interest rates again in August as it looks to kill off inflation. Westpac chief economist Luci Ellis says Tuesday's release of minutes of the Reserve Bank's July meeting and the governor's keynote speech on Thursday reaffirm a rate cut in August is not a lock. 'The monetary policy board clearly remains nervous about inflation and some members want to see actual data to support their expectation that it is still declining towards 2.5 per cent, the midpoint of the RBA's 2-3 per cent target range,' Ms Ellis wrote in an economic note on Friday. 'For this reason, we cannot lock in the cash rate cut in August just yet.' Despite warning a cut is not a guarantee, Ms Ellis did concede the most likely outcome was a rate reduction in August. Homeowners are warned a rate cut in August is not guaranteed. NewsWire / Nicholas Eagar Credit: NewsWire Traders have priced in an August rate cut as a near certainty and all 29 market economists surveyed by Bloomberg say the official cash rate will be reduced by 25 basis points. The market in total expects 75 basis points worth of cuts by March 2026, bringing the official cash rate down from 3.85 to 3.10 per cent. While economists have been factoring in falling inflation and rising unemployment as a sign to cut, Ms Ellis said they shouldn't be pricing it as a certainty. 'Monetary board members who are still nervous about supply constraints and tight labour markets will want to tread slowly,' Ms Ellis said. In her speech to the Anika Foundation on Thursday, RBA governor Michele Bullock said the board would take a measured and gradual approach to future rate cuts. Ms Bullock pointed out year-end trimmed mean – which shows the underlying inflation rate by stripping out the more volatile parts of the economy, including fuel and energy prices – came in at just under 3 per cent for the first time since 2021. 'The monthly CPI Indicator data, which are volatile, suggest that the fall may not be quite as much as we forecast back in May,' she said. 'We still think it will show inflation declining slowly towards 2.5 per cent, but we are looking for data to support this expectation.' ANZ also came out with a warning saying the next round of CPI data – to be released next Wednesday – could derail an interest rate cut. ANZ said there is a key quarterly inflation figure to watch. Christian Gilles / NewsWire Credit: News Corp Australia ANZ economists say the central bank will be comfortable cutting should the quarterly trimmed mean figures come in at 0.6 per cent or 2.7 per cent for the year. But if the number comes in at 0.8 per cent or higher or an annualised rate of 3 per cent they say a cut is unlikely. Ms Bullock also said the labour market remained tight and the uptick in unemployment from 4.1 to 4.3 per cent in June was not a surprise to the central bank. Asked if seeing the June unemployment figures, which came out after the RBA's board meeting, would have swayed the board's decision Ms Bullock said: 'I don't think so'. 'The monthly numbers pop up and down … Our quarterly forecast for the unemployment rate to drift up to 4.2 per cent in the June quarter is pretty much on the mark,' Ms Bullock said. Ms Bullock also said economists overreacted to the figure and it wasn't the 'shock' they were calling it. 'Some of the coverage of the latest data suggested this was a shock – but the outcome for the June quarter was in line with the forecast we released in May,' she said. She said the board wanted to see a gradual easing in labour market conditions, that has so far been most evident in fewer job vacancies, reductions in hours worked and declining rates of voluntary job switching.
West Australian
4 days ago
- West Australian
‘No magic wand': RBA explains what they are looking for ahead of next rate call
A tight labour market blocked a rate cut in July, but the RBA boss says Australians won't have to choose between a job and rate relief. In her speech at the Anika Foundation Fundraising lunch on Thursday, RBA governor Michele Bullock revealed what the central bank will be looking for when it meets in August to discuss the cash rate. She said the board was not looking for outright mass job losses, but a gradual easing in labour market conditions that has so far been most evident in fewer job vacancies, reductions in hours worked and declining rates of voluntary job switching. 'These shifts aren't without their challenges, but they all tend to be less disruptive than outright job losses,' she said. Pointing to last week's ABS labour market data, she said the spike in job losses, from 4.1 to 4.3 per cent, was not the silver bullet for future rate cuts that experts forecast. 'Some of the coverage of the latest data suggested this was a shock – but the outcome for the June quarter was in line with the forecast we released in May,' she said. She explained looking only at labour market movements, there were more outright job losses than the RBA had forecast, but other measures such as the vacancy rates were in line with previous central bank predictions. 'More broadly, leading indicators are not pointing to further significant increases in the unemployment rate in the near term,' she said. Ms Bullock said while the board's remit was to balance employment with price stability, the central bank wasn't necessarily looking for job losses. 'I should note the RBA can't wave a magic wand and control how adjustments in the labour market play out. Interest rates are too blunt an instrument for that.' 'Losing a job can be one of the most stressful events in someone's life, and it can have far-reaching implications for families and communities,' she said. Ms Bullock's speech reinforces the message from the minutes of the RBA's monetary policy board meeting, released on Wednesday, where the central bank revealed a tight labour market was the key blocker of further rate cuts. 'Recent monthly CPI indicator data – which can be volatile and does not cover all items in the CPI – were broadly consistent with this expectation,' the RBA board said. But with more Australians currently in work, the RBA was wary the strong employment figures could lead to an increase in inflation. 'The labour market was assessed to have remained tight, with measures of labour utilisation little changed over the prior year,' it said. 'Growth in private demand had begun to recover, but was still subdued.' A cautious RBA monetary board held the official cash rate at 3.85 per cent following its July meeting, with the shock move defying expert commentators and predictions from the money markets. The board voted 6-3 in favour of the hold. 'A minority of members judged that there was a case to lower the cash rate target at this meeting,' the board said. 'These members placed more weight on downside risks to the economic outlook – stemming from a likely slowing in growth abroad and from the subdued pace of GDP growth in Australia.' The RBA monetary policy board will next meet on August 12, with money markets widely forecasting a rate cut.
