Hobart Rental Market Trends 2024: Is the Rental Boom Over?
Hobart’s rental market has experienced unprecedented growth in recent years, with rents surging as demand outpaced supply. But as we enter the latter half of 2024, the question on everyone’s mind is: Has the Hobart rental boom come to an end? Recent data indicates that rental growth has begun to slow, and Hobart is one of the cities leading this trend.
Why Have Hobart Rental Prices Flatlined in 2024?
According to the CoreLogic rental market report, rental prices across Hobart, along with other major Australian cities, have flatlined during July and August 2024. After an extraordinary 39% increase between August 2020 and June 2024, rents are no longer rising at the same rate. In fact, the last two months have shown the weakest rental market conditions since the early days of the pandemic.
For context, prior to COVID-19, rents increased by just 5.4% over the same period. Now, although Hobart's rental market has softened, it remains significantly higher than pre-pandemic levels.
Hobart’s Declining Rental Growth: Key Factors
While rental prices in Hobart are stabilising, several factors are influencing this shift:
Affordability Issues: Hobart’s rental affordability has become a major challenge. From 2020 to 2024, rental prices in Australia increased by 36.1%, while wages grew by only 12.7%. As a result, the median-income household is now spending 32.2% of their income on rent.
Increasing Household Sizes: During the pandemic, many households shrank as individuals sought more space and moved out on their own. However, recent trends show that household sizes in Hobart are growing again, with more people living in shared or multi-generational homes. This shift in household formation is reducing rental demand.
Slowing Migration: A reduction in net overseas migration is also easing rental pressure. With fewer international students and temporary visa holders entering the market, demand for rentals has dropped compared to the peaks seen in 2023.
New Supply Easing Pressure: The completion of new dwellings, supported by the HomeBuilder grant, is starting to add much-needed supply to the Hobart rental market. As these homes are completed, the rental demand associated with construction delays is diminishing.
Rental Trends in Hobart: What Does This Mean for 2024?
The question on both tenants’ and landlords’ minds is: What’s next for the Hobart rental market? While Hobart has seen a 0.3% decline in rents over the past three months rental prices are still considerably higher than pre-COVID levels. This means that tenants may finally see a little relief as competition for rental properties eases, but affordability challenges remain a significant issue.
For property investors and landlords in Hobart, the cooling market offers a chance to reassess rental rates and property offerings. With less competition and slower growth, pricing properties competitively will be essential to attract long-term tenants.
Maximising Your Property's Potential in a Changing Hobart Market
As the rental market shifts, staying informed is crucial. At MIX Property Group, we are closely monitoring these trends to ensure our clients—whether they are landlords or tenants—make the most of current conditions. If you’re a landlord in Hobart looking for advice on how to price your property competitively or a tenant searching for your next home, our expert team is here to guide you. Contact us today