What has happened to the great Aussie dream of buying a home?
For many Tasmanians, it increasingly looks like that’s all it may ever be – a dream.
A lifetime of renting had been the realistic option for many, but in Tasmania, with less than 2 per cent of rental properties vacant, even that option is now becoming out of reach.
So if you can’t afford to buy a house and you struggle to compete for a rental property, what happens next?
Tasmania is in the midst of a housing affordability crisis, but it’s not just about putting a roof over your head, it’s about finding a home.
New figures from the Real Estate Institute of Tasmania show that in 2017, it is expected that almost $4 billion of housing sales will be recorded in the state, up about 20 per cent from the previous year.
For those already in the housing market, this is great news.
As property prices continue to grow rapidly, homeowners and investors alike see the value of their properties increase.
This is because, as a society, we have focused on housing as a wealth generator through our tax system.
Through things like negative gearing and capital gains tax, we have inflated house prices and at the same time, pushed a permanent home further out of reach for low income families.
On top of that, it is becoming increasingly common for property owners to shift their rental property to Airbnb or other short-term accommodation, where they are able to bring in more money, but which also depletes the already low private rental housing stocks.
The average Tasmanian is about 40 years old, is married and has two children. Now let’s imagine this family is on a low income and is trying to find a rental property.
The lease is ending at their current property, so they don’t have much time to find a new home.
They spend their weekends looking at potential rental properties, but they are competing against many other families, many on higher incomes, and everything in their price range is quickly taken and they are back to square one.
In the end, they have to make a choice: do they start looking at rental properties priced higher than their budget or do they move further out of the city where rent and competition may be lower?
If they choose the first option, they risk putting too much strain on their budget and not being able to pay the rent in the future, potentially losing their rental home and receiving a bad rental history, making it even harder to find somewhere to live next time.
If they choose the second option, they may have to move their children to a different school, they will perhaps be further away from their employment, family and friends and face high travel costs or limited access to public transport.
The options for low-income Tasmanian families are very limited.
When searching for an affordable home, many families will live in a series of short-term, problematic housing situations, often relying on the help of family or friends to put them up temporarily.
This instability has an impact on the health and well-being of the family, is challenging for maintaining stable education for children and can make employment or looking for work very difficult.
So what can we do?
Essentially we need more homes across various housing types – public and social housing, private rental homes, affordable homes to buy.
Tasmania already has initiatives in place to make stepping into home ownership a bit easier, such as the Streets Ahead Incentive Program which offers deposit assistance of $12,000 to 150 people.
But, according to the state government’s Affordable Housing Strategy, Tasmania will need an average of 2392 new homes each year until 2031 to meet the current demand, this includes 656 affordable homes.
We already know a safe, comfortable, and stable room over a person’s head would go on to impact every other area of their lives, branching to employment, education and social activities.
Looking at Glenorchy, an up-and-coming Hobart suburb fairly close to the city, REIT data shows that the median housing price has increase by about $80,000 in the past five years.
And it’s a similar story at almost every region across Tasmania, so we need to start thinking differently.
One thing we could do is to look at incentives for landlords to offer their homes to people on low incomes, such as subsidies on their insurance.
We could looked turning vacant land into medium-density housing, or legislating for a certain percentage of new developments to be affordable housing.
Too often, Tasmanians are becoming entrenched in poverty through the high cost of their home.
There is no one answer, but there is much more we must do to ensure all people in our communities have a home that meets their needs and is priced within their means.