Housing stress in Tasmania has reached an all time high, which is a pressing issue for society at large.
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Across the property market demand is outstripping supply, properties are selling in an average of nine days, buyers are purchasing sight-unseen and multiple-buyers are throwing offers at the same house.
The affordability for many to own their own home is fast becoming a distant pipe-dream.
Adding to this is the rising risk of homelessness, impacted by the possibility that investors will start dropping out of the market, opening up homes for buyers but stripping the rental market of much-needed properties for those who cannot afford to buy their own.
Real Estate Institute of Tasmania president Mandy Welling said Tasmania is currently experiencing a severe shortage of investor-purchasers, and this is one of the biggest issues going forward in a market in dire-need of more rental properties.
She said the rising cost of land tax was scaring off investors, or forcing them to drop out of the market.
"In some cases they are paying three times the amount of land tax, and that can create a cost and burn investment so they have to increase the rent or get rid of them," she said.
"The rising costs of keeping properties is leading investors to think 'this is too difficult, this is too expensive', so they throw them back into the market."
Ms Welling said when these properties enter the market, there is no way of predicting who will buy them.
She said many properties that would normally sell to investors were being snapped up by first home buyers instead.
This is contributing to rising homelessness.
"We don't know whether properties will be purchased by owner-occupier, or investment. If all these investment properties enter the market we may lose half of them to owner-occupier.
"It is very scary, I can't even find the words to describe what would happen if this keeps on happening. It would obliterate our rental market.
"Already there are way too many people who have nowhere to live, way too many people living in properties they can barely afford."
Fewer properties will cause already high rents to increase further.
"It would seriously drive up the price of rents for existing properties, which would then create more of a shortage, and the prices that are currently being achieved would sky-rocket."
The rising costs of keeping properties is leading investors to think 'this is too difficult, this is too expensive', so they throw them back into the market...If these investment properties enter the market we may lose half of them to owner occupier.
- Real Estate Institute of Tasmania president Mandy Welling
Ms Welling said there is already a shortage of property stock and high competition, and with agents fielding an increasing number of calls from overseas and interstate buyers who are looking to re-enter the market, the shortage may increase.
"Last year, so January 2020 to December 2020, 90 per cent of buyers were Tasmanian and the remaining 10 per cent were international and interstate buyers," she said.
"We expect to see a bit of a shift over the coming months as our inquiries from the interstate market has increased considerably. The interstate market looks like they are heading for us.
"They make it more competitive, and that is where we will be watching the market very, very intensely to see if that interstate market do start buying up our property as that will have an impact again.
"We are already seeing multiple buyers come in for the same property, which generally generates a higher price, where people are making higher offers to secure the property."
IN OTHER NEWS:
According to CoreLogic's hedonic home value index, dwelling values (houses and units) in regional Tasmania increased by a whopping 11.9 per cent in the year to December 31, 2020, with the median value now sitting at $344,897.
For houses in regional Tasmania alone, values skyrocketed by 12 per cent, bringing the median value to $359,521. In terms of units, values went up by 10.5 per cent ($271,076 median value).
Meanwhile, Real Estate Institute of Australia data showed housing affordability in the state declined in the December quarter, where the amount of income required to meet home loan repayments increased by 2.2 percentage points up to 31.1 per cent.
An average loan across Australia increased to $373,521, representing an increase of 10.5 per cent over the year, but Tasmania still promised the lowest average loan size at 26 per cent less than the national average.
Ms Welling said there needed to be a serious surge in the number of houses available for the market to slow down.
"We would need an awful lot of properties, and as we are yet to feel the real impact of interstate and international markets, the properties we do have available might get swallowed up very quickly."
She said Tasmania was becoming more and more attractive to such buyers.
"Some homes are selling in hours, some are not even going to the market. REIT put out data that showed there were some suburbs selling faster than suburbs in Melbourne and Sydney ... surprisingly the median sale price in Hobart overtook Brisbane.," she said.
"Safety is becoming a key driver. In the time of COVID, Tasmania is appearing safe."
