- In short: A report has found the majority of short-stay Tasmanian properties are owned by Tasmanians, who tend to have property portfolios that dwarf average household wealth
- What’s next? The Tenants’ Union wants the federal government to rethink its stance on negative gearing and capital gains tax concessions so homes are not wealth creation vehicles
A new report has revealed details about the wealth of the people who own short-stay accommodation in the short-stay capital of Australia, Hobart.
The Tenants’ Union of Tasmania found short-stay owners in the municipality of Hobart had property portfolios worth almost double the average Australian household’s wealth.
“Short-stay accommodation providers continue to repeat the line that their hosts are everyday people who are sharing their home in order to stay afloat,” said Tenants’ Union principal solicitor Ben Bartl.
“Whilst we recognise that hosts who are sharing rooms in their principal place of residence may be doing so to supplement their income, this is not true of investors who have bought up entire properties and converted to short-stay accommodation.”
The Tenants’ Union looked at 496 short-stay accommodation permits granted by the Hobart City Council and investigated the properties owners through the Land Information System Tasmania (LIST).
It found that the average value of a Tasmanian short-stay owner’s property portfolio was $2.6 million.
According to the Australian Bureau of Statistics, in 2021/22 the combined wealth of the average Australian household was $1.4 million.
“Those are quite conservative figures because the wealth that we’re able to research is just a single asset … Tasmanian properties,” Mr Bartl said.
“We were unable to research whether or not the investors own properties on the mainland or overseas and of course we also don’t have access to people’s cash balances or superannuation or any other assets that they may own.
“We also know that Tasmanian incomes for example are about 20 per cent lower than those in Melbourne and Sydney and generally speaking Tasmania is the poor cousin of our mainland counterparts.”
Mr Bartl hoped the information would encourage the federal government to change the rules around negative gearing and capital gains tax so housing was looked at as somebody’s home rather than a means to growth wealth.
“There is a growing gap between the haves and the have nots, those that are able to make money and make more money and people like renters who don’t generally have a lot of assets [who are] falling more and more behind,” Mr Bartl said.
The report found most short-stay owners were Tasmanian (65 per cent).
Only one postal address was for a person outside Australia.
“It has busted a few myths including that our housing stock is being bought up by mainlanders or foreign investors,” said Mr Bartl.
“It is also a myth that companies are buying up properties, with almost nine in 10 permits being issued to natural persons.”
Mr Bartl said while it was good to know that the wealth created by the short-stay sector was mostly staying in the state, there were wider concerns that needed to be addressed.
“The buying up of entire properties is taking away long-term rental stock from renters which in turn is causing the vacancy rate to decrease and rents to sky rocket,” he said.
“There’ll be a big movement of young people leaving”.
The struggle to find a home
Lauren (not her real name) and her entire family have faced the perils of a tight rental market.
The 28-year-old did not want to use her real name because she feared it might impact on her future ability to secure a rental.
She is currently sharing a home with her partner and brother.
But they are on a short-term lease and the landlord is preparing to convert the property into short-stay accommodation in a matter of months.
“If my partner, brother and I with a combined household income of nearly $200,000 struggle to find a rental, I can only imagine how difficult it is for people with lower incomes.
“The mental and physical toll of not having stable accommodation is so detrimental.”
For a time Lauren, her partner, her parents, her brother and her brother’s partner were all sharing a home.
The big family share house relied on everyone contributing to be able to pay the rent.
But when the rent was increased and mould in the bathroom was not removed the family sought new accommodation.
Lauren said competition for affordable properties was intense.
“Basically there’s not enough physical properties.”
She would like investors to think twice before buying a third property or converting a long-term rental into short-stay accommodation.
“Housing truly is a human right and property owners should stop viewing it as just an investment.”
She would also like to see disincentives introduced for people operating short-stay accommodation.
“For example higher taxes on income from short-stays, or a penalty for the amount of days a short-stay is empty,” she said.
“Our landlord is waiting for the summer and the busy tourist season before converting our rental into an Airbnb because they know it will mostly sit empty during the winter.”
Laura said the current situation had her considering moving to Canberra where she would be able to earn a higher wage and have more rental options.
“There’ll be a big movement of young people leaving and you’ll just be left with this sort of older population and this transient population of people,” she said.
“I think you end up with communities like Hobart where it’s a bit soulless in certain areas especially when you get closer to the CBD, it’s all short-stays.”
The Hobart City Council has voted to adopt a new rates system that doubles the amount charged for short-stay accommodation properties.
A Shelter Tasmania report in 2022 found Hobart had 6.8 times more short-term rentals (as a proportion of its total private long-term rental market) than Sydney, and 4.5 times more than Melbourne.
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