TAS Liberals hoisted on own population ponzi petard

By Leith van Onselen

A few months back, the Hodgman Liberal Tasmanian Government rejoiced at the recent acceleration in the state’s population growth:

Tasmania’s population is growing at its fastest rate in five years and the State Government wants to see more of it…

“There’s no doubt that Tasmania has ample room for additional intake of people from interstate or overseas who might choose to live here,” Premier Will Hodgman said…

“A strong population base … actually supports growth in not only the economy but also in government’s ability to provide the sorts of services that Tasmanians need, into our schools, into our hospitals, into our infrastructure,” Mr Hodgman said…

Yesterday, the reality on the ground was revealed with Hobart experiencing a full-blown rental crisis, according to the latest Rental Affordability Index report by Australia’s community housing associations:

The affordability of rental properties in Hobart and surrounds has nosedived to its lowest point in six years…

“Greater Hobart continues to be the least affordable capital city in Australia,” the report read…

The Brotherhood of St Laurence’s executive director, Conny Lenneberg, estimated half of all tenancies in Hobart are experiencing rental stress…

With a rising poverty line, the issue is not one that is confined to those on welfare, but one that is increasingly impacting middle Australia.

Now the blowback has arrived, with the Hodgman Government under fire over the budding housing crisis:

LABOR has accused the Government of failing Tasmanian families who are struggling to put a roof over their heads this Christmas.

The latest Rental Affordability Index, released on Thursday, shows Tasmanian incomes are among the lowest in the nation, but our rents are higher…

Opposition housing spokesman Josh Willie said the latest Rental Affordability Index painted a bleak picture for Tasmania, particularly Hobart.

“The report shows that working families in Hobart are spending almost 50 per cent of their income on rent, leaving little money left over for essential items including food and heating,” Mr Willie said.

“The Government has created demand for housing without planning for future housing needs. Hobart is now one of the least affordable cities in Australia — the worst result in six years.”

I especially like this bit: “The Government has created demand for housing without planning for future housing needs”. Try living in Sydney or Melbourne, which has borne the brunt of the mass immigration ‘Big Australia’ ponzi.

Tassie aint seen nothing yet. Welcome to the East Coast housing nightmare.

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Comments

  1. Morons….. they need to lock the door on the select few who have whispered encouragement in their ears ie real estate rats/developers, selected retailers, etc etc

      • What intrigues me is that the cycles of each state are out of kilter – NT – disaster, you just don’t hear it too much, all other states turning down – but now SA & Tas are going well. Weird isn’t it?

    • Dingwall, Tassie is half the size of England but only has a population of 500k. Think about that for a minute. Some amazing fertile soils up north.

      It was never going to stay that way, ever…

  2. “working families in Hobart are spending almost 50 per cent of their income on rent”. This is great news for investors.

    And where are the zealots claiming rents can’t keep climbing because they are stuck to wages…? “Tasmanian incomes are among the lowest in the nation, but our rents are higher…”. Is this some kind of magic, then? Or an ordinary consequence of a particularly severe housing shortage and immigration influx?

    • Ok, I’ll bite.
      “And where are the zealots claiming rents can’t keep climbing because they are stuck to wages…?”
      Are you then claiming that the ability to pay rent is NOT bound to wages?? Thats just being disingenuous, Peachy.
      You may see a spike in the percentage of peoples wage going to rent for a short period of time or in (isolated) areas, people are less inclined to move away from (dare I say Tassie is one of those places), but it is not a system in equilibrium and you can’t look at it in isolation.
      People will find other living arrangements long before they can’t feed their kids.
      You’ll obviously see profound changes in the spending pattern of renters with consequences for the broader economy – may even lead to job loses of the day-job of your landlord buddies (God forbid).
      But you already know all this….

      • We are a long way from not being able to feed kids. And so there is plenty of room for rents to rise and consume more and more income.

        Families might need to move in together or sublease a room.

        Things can get a lot worse yet. We are not at rock bottom. Continued immigration will continue to make housing unaffordable, APRA and RBA be damned – not enough houses is not enough houses.

    • where are the zealots claiming rents can’t keep climbing because they are stuck to wages

      There are plenty of such morons out there Peachy. What you will not find however is poorer people in Tasmania denying the shortage of housing has forced up rents. This claim is generally made by rich inner-city turkeys.

      What generally happens in modern-era western countries is that a family will tend to spend about 1/3 its income on housing. What varies is the quality of housing they get for the 1/3.
      During a time of abundant housing, the family will get a great house for 1/3 their income and under these conditions one will find out what type of housing people truly desire. For most it will be a big house, a big backyard, a big garage, rumpus room, poolroom, spare room and a couple of sheds and gardens, pool, tennis court of whatever. It will also be close to work, transport, shopping, schools and hospitals.

      When housing is less abundant and more in shortage, families will compromise on the size and additions to the house, they will sacrifice block-size, they will commute longer and toll-expensiver. As they become more desperate they will move into duplexes, apartments and shared-living arrangements. More desperate still and they do slum-clearance bunk-share with on-shore proxies, or take a risk with pervy landlords like Reusachtige. A last resort would be pitching a tent in the city showground or on the local street where rich inner-city shortage-deniers live. By that time the shortage should be undeniable.

      The simple fact that a typical family will go (less house same money) instead of (same house more money) is the key to understanding the deception of the zealots and shortage-deniers.

      Your zealots will say “rents can’t rise faster than wages”
      My shortage-deniers say “look rents haven’t risen at all, the average rent is still only X% of the average wage, therefore there is no shortage”

      Their lie is easily exposed by moving the focus off average price and onto average quality. Alternatively focus on what happens to the rent of a given house over time as housing moves from abundance to shortage.

      Take the example of a normal Sydney house in 1985 rented by a young teacher for 1/3 a normal wage. The house would have 3 or 4 bedrooms a large yard and be a short drive to the teachers school. Fast-forward to 2018 and the same house is 30 years older, unrenovated and now unaffordable to an average young teacher. It now rents for 1/2 a normal wage and is unaffordable to a normal wage earner.

      Young teachers and their families still obtain shelter at 1/3 their income as always. However many now reside in yardless dogboxes and many have long and expensive commutes to work.

      I hope that answers your question Peachy. There is one more thing that needs mentioning however.
      “working families in Hobart are spending almost 50 per cent of their income on rent”
      This quote appears to contradict what I have said about rent being families tending to always spend 33% of income on rent and drop the quality of housing instead.

      What has happened in Tasmania is that the scoundrels in charge (politicians) have encouraged rich Chinese and airbnb investors to remove houses from the pool of rental stock in Tasmania. Rich Chinese and airbnb investors typically buy the best quality housing, so this shortage of best houses has caused the richest tenants to drop the quality of what they rent.
      ie. Previously rich A-grade tenants would rent A-grade housing for 1/3 their rich income. But now the rich Chinese and airbnb investors have so much A-grade housing that it is no longer available for 1/3 an A-grade income. So they rent B-grade housing for 1/3 an A-grade income.

      With so many A-grade tenants flocking to B-grade housing, this creates a shortage of B-grade housing and drives up its cost – it is no longer available for 1/3 a B-grade income. So now B-grade tenants rent C-grade housing for 1/3 a B-grade income.

      With so many B-grade tenants flocking to C-grade housing, this creates a shortage of C-grade housing and drives up its cost – it is no longer available for 1/3 a C-grade income.

      There is not enough C-grade housing for all the C-grade tenants and the previous B-grade tenants who have down-shifted. Price reflects the dire shortage. Price is now 1/2 a C-grade income. There is no option to downgrade quality. This is already the lowest quality housing in existence. Some must pay-up, the others must miss-out.

      The rich Chinese and airbnb investors have caused a number of C-grade tenants to become homeless. These are found in the Hobart Showground in tents and on the streets. Other C-grade tenants now pay 50% of their income on rent.

      What is another term for C-grade tenants? “Working families”. And what did that report show?

      “The report shows that working families in Hobart are spending almost 50 per cent of their income on rent, leaving little money left over for essential items including food and heating,” Mr Willie said.

      • Met a Tasmanian today who owns a home he bought 10 years ago in Longford (northern Tas.) – he wanted to move to Hobart and said incredulously that within the 2 most working class neighbourhoods of Hobart – Moonah & Glenorchy – there are no rentals available at all – incedible!

    • Pssst, don’t look now Peachy, but your Reusa is showing…

      This is the problem with puppeteers: eventually the puppet becomes the master!