VacuousNess, The Blog: July 2022

There's been a lot of noise in the Media recently about the nation-wide housing crisis and I've been particularly vocal about it.

If anyone is in any doubts as to how bad the rental crisis in Tasmania now is, then I’m here to tell you the reality. What you’re about to read is not an anomaly, but the reality for almost every renter in the state – if not the country.

For a myriad of reasons, we started renting in 2017. Since then we’ve had to endure moving every 12 to 18mths. It's now 5 houses, 3 within the last 2.5years. Of these 3 were sold, one house the owners needed to move in themselves and the house we are currently in is the 5th.

There's been very little difference in the size of these houses, but rents have gone from $420p/w to $600p/w whilst condition have gone from immaculate to - depressing.

At this current rental, nothing works properly. It’s now 4wks since stove / oven gave up completely. We reported that it was failing when we moved in 7mths ago. As yet the Real Estate Agent won’t even give date for new install. This is the 3rd place in a row we've rented which has had stove and / or oven issues.

The current rented house we are living in, is owned by an interstate investor who bought it without ever setting foot in it and apparently have still never been here.

This has me pondering:

How many residential dwellings in Tasmania are owned by people who are not Tasmanian?

How much of total residential property in Tasmania is ‘investment’ not owner/ occupier?

I have two choices at this point. I can take this (and PAGES of other breaches) to Residential TenancyCommissioner (aka RTC), who will do zero beyond tell them off (and in 6mths our lease won’t be renewed and we will never get a rental approval again in Tasmania); or fight for Tasmanian Resident Tenancy Act to be binned and replaced with model which puts secure housing at and centre. Hopefully helping every renter in the state.

Tasmania is not an isolated case; these issues are Australia wide. We can’t fix the nation, but we can make Tasmania better and then hope the rest follow.

Even if I were able to buy my own home tomorrow - this is no longer I fight I’m going to be backing down from.

At a Tasmanian political level the approach of: Liberals, Labor and Greens seems to be to push for greater investment in Public Housing. There are two major issues here:

The Tasmanian Liberal Govt ‘policy’ seems to be 10,000 homes rolled out over 10 years. The numbers here don’t stack up. It needs to be 10,000 homes over 5 years. To date most of this seems to be sound bite, media release and publicity.

Public housing is only one key component in an over all solution, but that is not the message, which is being given. All three political parties are largely ignoring or too frightened to address issues within the private rental market.

In doing so they are completely ignoring the fact that the Tasmanian Residential Tenancy Act (1997) is and always has been completely unfit for purpose and needs to be binned, by not admitting this and replacing it with a model which place an emphasis on basic human right to safe, secure, affordable long term security of housing; such as those of European nations like France or Germany; they are CHOOSING to ignore the fact that median income earners will still be trapped in the same rental spiral ineligible for public housing due to their incomes and ineligible for home loans – due to their incomes.

There are two exceptions. David O’Byrne (Labor) and Cassie O’Connor (Green).

However, what has disappeared from the conversation and media reporting is the conditions renters are now silent being forced to tolerate; things which under the existing Act they are supposed to be basic requirements, urgent or emergency repairs etc.

These are my thoughts for the day as I try to work out WTF I’m going microwave for the family’s dinner tonight, but this won’t be the last blog posted on this topic.

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In the news:

Full Text: 'TIME FOR A RADICAL RETHINK ON HOUSING', op-ed byDavid O'Byrne MP

Printed, Hobart Mercury 13th July 2022.

The Tasmanian private housing sector is showing signs of market failure. Home ownership is increasingly unaffordable for many Tasmanians, rents are skyrocketing and waiting times for social housing are at record levels. It is a crisis and has been now for a number of years.

Peter Gutwein’s recently announced ‘arms-length’ Housing Corporation is a flawed model. It fails to recognise that Government has a direct responsibility to act when markets fail or become distorted. The Liberals’ latest housing policies avoid this responsibility, misdiagnose the problem, and will not improve housing affordability for either first home buyers or renters. Continuing to provide (expensive) public subsidies for both the supply and demand side of the private market is a certain recipe for fuelling further rises in rents and prices, and will do nothing to reduce social housing waiting lists. A new approach is needed based on active Government intervention in the market, and a big increase in public housing supply.

In the twelve months to February 2022 Hobart property prices increased by 28% and regional Tasmanian prices by 30%. A house in Hobart costs more than in Adelaide, Brisbane, Darwin and Perth, with the median price now being more than $700,000. And while price growth may slow in the coming year, further substantial increases are likely.

House prices are now nearly ten times average incomes – putting home ownership out of reach for many younger Tasmanians. And abnormally low interest rates mask the longer term financial stress likely to be experienced by already established home owners servicing larger mortgages.

The Tasmanian rental market is now the most expensive in Australia. Hobart rents average $521 per week – a 13% increase in the last year. Launceston had an even bigger increase of 14%. Rental vacancy rates are the worst in Australia with Hobart at 0.9%, Launceston at 0.8% and the North West at 1.3%. Tasmanians in the private rental market are typically spending close to 40% of their income on housing.

The average waiting time for priority listed social housing applicants is 71 weeks and the waiting list is nearly 5000 people – a 75% increase since the Liberals took office.

Increasing the supply of private housing stock can play a role in moderating price and rent increases, but there are limits to this approach given the structure and dynamics of the private housing market. Not all demand for housing comes from would be owner occupiers, with a significant segment of demand driven by investors seeking capital gains and/or rental yields. Amongst the $6.2 billion in Tasmanian home sales over the last 12 months there were around 1800 first home purchasers but more than 2300 investment purchasers, and there is often competition between the interests of these distinct buyer groups. And the history of the housing market cycle suggests that the market will retain the price levels achieved in each ‘boom’ period even in the face of increases in private housing supply.

The Liberals’ recent and now expanded initiatives – cash incentives for first home buyers, stamp duty concessions, low income rental subsidies, land tax reductions and shared equity in private housing purchases – have failed (and will fail) to moderate rising prices for first home buyers and low income renters. While beneficial for those who have received and will receive them, these continuing initiatives will, paradoxically, continue to add to rising prices in the private market.

New interventionist policies need to moderate the housing market and improve ownership and rental affordability for low and middle income earners. The supply of Tasmanian public housing has dramatically contracted in the last decade, falling from 11,500 in 2010 to just over 7,000 in 2020. While new community housing has helped offset the decline in public stock, the total stock of public and community housing is lower than it was twenty years ago. Small wonder that the public/social housing waiting lists continue to rise.

To put it simply, more of the same policy approach simply will not cut it.

Expanding State built and owned public housing stock should be the focus of a new housing policy. Tasmania needs to re-establish the State Housing Commission (a proud and successful achievement of earlier State Labor Governments), updated for contemporary needs and fit for purpose in the twenty first century.

The Commission would build new public housing using a blended model of rental and rent to buy for low and middle income earners. It should aim to build no fewer than 10,000 new public dwellings over a decade, on top of the planned expansion of community housing, with prices for equity shares being at a discount to the prevailing private market rate, subject to income and asset test eligibility. Sale and resale of properties would remain inside the public housing sector for a defined period as a mechanism to smooth the wider market. And the Commission would integrate emergency, transitional and supported accommodation into its wider construction plans.

As an actor in the wider market the Commission would increase supply, put downward pressure on future house price rises (without undermining current asset values) and allow low and middle income Tasmanians to have access to affordable rental accommodation and aspire to home ownership.

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In other news:

Louise Elliot would be a nightmare as Lord Mayor

Housing Crisis Tasmania: A Tale Of Political Arrogance & Property Industry Greed.....

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