‘Devastating’: Hobart’s rental crisis is bad, it’s about to get worse – realestate.com.au

Ten years from now, Hobart renters will face the prospect of having to pay almost $40,000 a year to keep a roof over their heads.

For average residential tenants, this is more than €9,000 more than they pay today, with rents ranging from €580 to €760 per week.

The increase for apartment renters is expected to increase by almost $8,000 to $33,384 per year by 2035 – $490 to $642.

Greater Hobart’s cheapest rental deal is a one-bedroom studio in Battery Point for $240 per week. The most expensive, at $2,250 per week, is a three-bedroom rooftop apartment in the city.

If the prediction came true, the studio would cost $314 and the triple room would cost $2,948.

The analysis was based on a varied forecast of the consumer price index (CPI), which would decline from 3.6 percent in 2026, as forecast by SQM Research, to 2.6 percent in 2029.

This approach has been responsible for the unusual economic conditions of the past decade, with skewed migration rates due to the pandemic.

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SQM Research director Louis Christopher.

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SQM Research director Louis Christopher predicts rent increases of 2 to 4 percent in Australian capital cities over the next year.

Other cities could be much higher, including Hobart, which expects an increase of 6 to 10 percent.

But figures are unlikely to hold at that level, with SQM expecting 180,000 new homes to be delivered nationally by 2026.

Mr Christopher said renters would be better off buying a house if they could afford it.

“If you have the opportunity to come in as a first-time home buyer, you should look at it seriously,” he said.

“The way things have gone for renters who became first-home buyers has been better than for those who remained renters, and I don’t see that changing anytime soon.”

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No.608/62 Patrick St, Hobart is today Hobart’s most expensive rental property, with an asking price of $2250 per week. Nest property. Image: realestate.com.au

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No.608/62 Patrick St, Hobart.

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Dr. Shelter Tasmania acting CEO Lauren McGrow said Tasmanian tenants were already struggling.

Dr. McGrow said Hobart is currently fairly unaffordable, so any increase in rental prices will be “difficult” and “devastating for many”.

“The current vacancy rate of less than 1 per cent indicates the housing crisis across Tasmania has not abated,” she said.

“Many renters are now locked out of Hobart and have already reached the upper limit of what they can afford.

“People are going without essentials just to pay the rent.”

Shelter Bag acting CEO Lauren McGrow.

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A Property Investors Council of Australia 2025 member survey with around 900 responses found that 65 per cent of landlords said they had passed on less than 10 per cent of the additional costs they had faced in the past year.

Excluding interest, nearly 270 of them reported that their costs had increased by 11 to 20 percent, while 160 of them experienced a cost increase of 21 to 40 percent.

PICA chairman Ben Kingsley said landlords should look to increase rental yields by 4 to 5 percent as they try to recoup rising costs.

“If interest rates get low and you’re not getting a capital appreciation return, then you move out of that asset,” Kingsley said.

No.55 Main Rd, Sorell seeking $575 per week. Kate Storey Real Estate. Image: realestate.com.au

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No.10 Terrina St, Lauderdale charges $580 per week. Peterswald. Image: realestate.com.au

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Socialist housing lawyer Jordan van den Lamb said tenant households were already struggling to survive, with many having to choose between rent, food or medicine.

He fears the increases could be worse than SQM’s predictions.

“You’re seeing the household size of people who don’t own their homes increase, so we’re going to have tight living spaces for renters as people rely on living with other people to afford the housing they rent,” he said.

No.29 Tingira Rd, Blackmans Bay for $585 per week. Raine & Hoorn. Image: realestate.com.au

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Shelter Tasmania is calling for action on rentals at all levels of government.

“We need to increase the new supply of social and affordable housing for low-income people, such as retirees and students, and for middle-income people, such as nurses and teachers,” Dr McGrow said.

“We need to provide a 20 percent increase in funding for homelessness services that are beyond capacity.”