Regional rental price hike ‘here to stay’, as COVID-19 tree-changers snap up properties

 In Home News Section, Uncategorized

Bec Brown didn’t think it would come to this, but she and her four kids are moving into her dad’s “man cave”.

In a couple of weeks’ time, the family will be sleeping in swags on the concrete floor of her parents’ shed — just in time for Christmas.

Ms Brown is finding herself in the midst of the “acute regional rental crisis” that has expanded beyond metropolitan areas, where some tenants are paying about $400 per week depending on the region.

“It’s ridiculous how fast and how quickly [the prices] have gone up,” she said.

“I mean, they’ve gone up by hundreds of dollars, not just $10, $20.”

It’s not that she can’t pay — there just aren’t any rentals to apply for.

Born and bred in the Huon Valley, Ms Brown wants to live in the area — but as it stands there are few suitable houses available, and each prospect attracts dozens of other desperate tenants.

“There’s just nothing. I mean, every day I’m checking the real estate website,” she said.

“I thought, just in case, I’ll start looking now … the first time around it took me three months and I applied for 76 houses.

“It’s even harder now, there’s not even as many houses to apply for. It could take up to six months, even longer.”

Just weeks out from having to vacate her current $460-per-week rental, time is scarce to find something suitable.

Hence the move into her dad’s shed.

“I don’t want to be here too long. It’s not ideal, there’s no toilet here. We’re going to have to hire a portaloo,” she said.

“We’re going to have to use the showers and the washing machines and things up at the local car wash area.

“[The kids] don’t like it, but at the same time they know there’s nothing else I can do.”

‘This is effectively the new normal’

Industry experts say relatively cheap regional market prices are no longer, making it increasingly difficult for people to find a rental or buy a property.

CoreLogic head of research Eliza Owen said regional rental prices across the country had seen a “really strong increase” since the start of the pandemic in March.

“Some of these areas have seen a very strong growth rate off the back of relative affordability, but also potentially more people moving to the regions during the onset of COVID-19,” she said.

“Sometimes these increases in regional rents can actually reflect the spillover of demand, when capital cities become too expensive.”

The prices of units for rent have gone up the most in regional Western Australia, Tasmania and Northern Territory — respectively by 6.9 per cent, 5.6 per cent and 5.3 per cent.

In some parts of regional Tasmania, such as the Huon Valley and the Tasman Peninsula, rental prices have increased by 30 per cent since 2016, the Tenants’ Union of Tasmania said.

“The acute housing crisis in Hobart is now extending to the regions,” principal solicitor Ben Bartl said.

“A lot of landlords and real estate agents are serving rent increase notices.”

But the Real Estate Institute of Tasmania (REIT) CEO Mark Berry said the current market was “here to stay”.

“This is effectively the new normal,” he said.

“I don’t think there’s going to be a magic bullet that’s going to occur overnight and all of a sudden property rents will drop by $100 per week.

“The people who are sitting back, waiting for a drop in prices — it’s not going to occur.”

‘We might move back to the mainland’

Tasmania’s housing supply has been outstripped by demand in recent years, and the REIT said the situation had been exacerbated by an influx of sea and tree-changers.

Mr Berry said people were moving to regional areas “effectively for the lifestyle that it provides”.

“What COVID has demonstrated is that people can work remotely, with the use of technology they’re able to work from home,” he said.

Narelle and Nathan Chester relocated to the Huon Valley from Adelaide at the first opportunity, when the initial lockdown restrictions started to lift.

“It’s become a very popular destination for people to move to from the mainland — like us, obviously,” Ms Chester said.

Back in July, there were just two viable options available in the Huon Valley, that matched the needs of the family of four.

The Chesters felt the pressure to take one for a higher-than-expected price because 10 other parties were eyeing it, too.

“Our original budget was $400 a week because we were paying about that in Adelaide — and for something fairly equivalent to that,” Mr Chester said.

“So, to find out it was $475 was a bit of a shock for the budget.”

With “a lot of people” moving into regional areas, this is the place the Chesters want to invest.

“We’re looking to buy in the local area here. That’s a very competitive market too,” Mr Chester said.

The REIT said the volume of properties for sale had declined significantly, from an average of 16,000-18,000 to less than 10,000 across Tasmania.

“We have almost a record low number of properties for sale across the state,” Mr Berry said.

The Chesters are hopeful they can buy before their current lease runs out, because they don’t like their chances of finding another rental.

“We might have to move back to the mainland like everyone else,” Mr Chester said.

By Katri Uibu (Original ABC Article)