Tasmania’s rental market prices have become so high that those relying on government payments to assist their rental payments will likely be priced out of the state’s rental market.
Residents who receive rent subsidies through the National Rental Affordability Scheme (NRAS) are likely to be left without affordable housing. Landlords are equally concerned and want to ensure they continue to receive market value for their properties.
The program means that many tenants with subsidised rent will no longer be able to access more affordable rentals, tightening the already limited housing market.
Three years ago, the state called for an emergency housing summit to address the rising homelessness rates as rental tenants were priced out of the housing market.
The limited availability of rental properties in the state is compounding the issue, with rental rates rising by 22 per cent in the three years since the summit and vacancy rates remaining perilously low. According to SQM Research, the vacancy rate in the state’s capital is 0.6 per cent.
An Economics lecturer from the University of Tasmania explained that the state is experiencing another housing crisis.
“Hobart and Tasmania are still the most unaffordable regions in Australia,” Dr Yanotti said.
“I would say that the difference is that now it’s more spread around Tasmania; it’s not just focused on Hobart as was the situation in 2018.”
The NRAS “aims to increase the supply of new and affordable rental dwellings by providing an annual financial incentive for up to ten years. This incentive is issued to housing providers (“approved participants”) to provide affordable rental dwellings at least 20 per cent below market rates.”
“Under NRAS, investors receive a tax-free incentive of $9,981 per annum (indexed annually) for up to 10 years for each approved dwelling rented at a rate that is a least 20 per cent below the prevailing market rate.
“Compared with a conventional residential investment property, in certain markets, the addition of the tax-free Incentive can provide a better return to the investor than charging market rent. In addition, investors could apply property expenses and non-cash deductions and allowances against a lower (80 per cent of market) assessable rental income, which could amplify the negative gearing benefit.”