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Tasmanian rental properties are in line for another huge hit as the state continues to feel the bite of a nationwide rental shortage.
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The Real Estate Institute of Tasmania's most recent report revealed a 59.9 per cent decline in investor purchases in the March quarter, and estimated that 650 investor-owned properties would be lost in 2023 if the trend continues.
There are signs the Northern rental market is becoming more accessible - vacancy rates lifted from a watertight 0.9 per cent in August 2021 to 1.9 per cent in April - but REIT president Michael Walsh says the state is still well short on rental properties.
"This year there's going to be less purchases made by investors, which means less private rental properties in the marketplace," Mr Walsh said.
"The conversation about social housing, the rental crisis and all that - that's on everyone's lips, including real estate agents.
"Property managers are acutely aware of the shortage of rental properties, but I think it exposes the problem that you can't just rely on the private sector to keep pace with the growing need for housing."
The state government is one year into a plan to build 10,000 new homes by 2032 to address Tasmania's housing shortage, but there are other factors at play.
Recent TasWater data showed nearly 1200 properties in the City of Launceston municipality sat unused or underutilised in 2021, while the rise of short-stay accommodation is impacting the number of available rental properties statewide.
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Tenants Union of Tasmania's principal solicitor Ben Bartl agreed the problem would not fix itself.
"The lack of investors buying rental properties in Tasmania highlights the failure of the market to address our housing crisis," Mr Bartl said.
"We urgently need the state government to increase supply by building and acquiring at least 1000 affordable homes each year for the next decade.
"But we also need short-term solutions including encouraging investors to return empty homes to the long-term rental market and ensure that investment properties are unable to be used as short-stay accommodation."
Adding to the strain is a steady rise in rental prices.
According to CoreLogic data, the median rental value for houses and units in the Launceston SA3 has risen 44.3 per cent in the past five years to $491 a week.
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Housing Minister Guy Barnett said the state government was combating the housing shortage with a $1.5 billion package that was "the largest housing investment in the state's history".
As of May, Homes Tasmania has built 969 of its 10,000 planned homes, with another 531 set to be complete by June.
"Increased housing supply is the answer, that's why the government is focused on the building of new homes and has put in place incentives and programs to encourage private investment in home builds," Minister Barnett said.
"We are supporting vulnerable Tasmanians struggling with rental affordability through programs like our $9.25 million Private Rental Incentives Program, which has assisted 523 eligible families into a new private rental, at affordable rents, since 2018.
"We continue to look at new ways to increase affordable rentals.
"The 2022-23 Tasmanian Budget provides $1.5 million to trial an innovative new Affordable Rentals Initiative where Homes Tasmania will source private rentals at market rates and provide them to eligible low income Tasmanians at a reduced rent to help ease the cost-of-living for those who need it most.''