What Does The Tasmanian Housing Shortage Mean For You?
There is no doubt about it we have a housing shortage across Tasmania with limited rental opportunities currently available in key suburban areas, and naturally the closer we want to be to the city, the harder it gets (this has always been a common issue though the desire of convenience)… however, the focus that the reason behind this shortage is due to short term accommodation such as Airbnb and Stayz is short sighted and an easy target for a number of reasons –
- Tasmania’s economy is as its strongest it’s been since I started real estate 10 years ago, when you have a strong economy you encourage jobs and new opportunities. New migration happens from other states in which they purchase property that may have been otherwise a rental property.
- Strong house prices – a number of investors are cashing out on their rental properties looking at making a good return during a strong period in which then flows on to point 3.
- Easier for First Home Buyers – low interest rates are making the opportunity for First Home Buyers to enter the marketplace. Typically a first home buyer competes with an investor for the same property due to their value.
- Lack of new development – The sudden interest and growth of the Tasmanian economy has caught a number of key stakeholders off guard, and the availability of new developments and land is limited.
Whilst I agree that landlords who have properties in the outer suburbs may consider this grant, I doubt they were offering their properties for short term accommodation when the majority of tourists would prefer a property within walking distance to services or cultural areas.
At the end of the day, if there is too much supply of a particular product, and a fade in demand in the short term accommodation market, a natural adjustment will occur where it will be more profitable to shift from short term to long term accommodation without the grant as a carrot. Until this occurs, I doubt this grant will have a major change in the current situation.
The Australian Financial Review has their take on this issue here: