Rent has fallen sharply in the city with Australia’s best performing economy as the COVID-19 crisis kills off the Airbnb market.
Hobart suffered the steepest rental drop during the three months to the end of June with apartment leases plunging by 3.7 per cent, new CoreLogic data showed.
The Tasmanian capital is now the fifth most expensive major city to rent a unit, with weekly costs of $391, putting it behind Sydney ($536), Canberra ($485), Melbourne ($446) and Brisbane ($398).
By comparison, Sydney apartment rents plunged by 2.1 per cent as Melbourne’s equivalent charges fell by two per cent during the June quarter.
Leasing an apartment became much cheaper in Hobart, despite Tasmania coming first in CommSec’s State of the States report for having the strongest economy for the first time since October 2009.
CoreLogic blamed the state border closures for killing off the short-term Airbnb market.
‘Hobart is estimated to have a relatively high level of Airbnb accommodation,’ the quarterly rental review said.
‘With anecdotes emerging of Airbnb owners putting this stock to the long-term rental market, the additional supply may have served to further reduce rents.’
Hobart was already an expensive market to rent with households dedicating an average of 34 per cent of their after-tax pay to service a lease, the highest of any capital city.
House rents fell in five of Australia’s eight capital cities during the June quarter.
CoreLogic’s head of research in Australia Eliza Owen said renters were also be more likely to either work in hospitality or be a migrant.
‘The COVID-19 environment shifted this trajectory,’ she said.
‘Closed international borders created a significant shock to rental demand, as historically the majority of new migrants to Australia have been renters.
‘Job losses in sectors such as hospitality, tourism and the arts have also impacted demand, because households in these sectors are more likely to rent than in other industries.’