“At the moment in Tassie we have no stock and we have all these buyers sitting there, like piranhas in a pond waiting for fish to be thrown in.”

Tony Collidge, the president of the Real Estate Institute of Tasmania, is contending with a housing boom that is decidedly double-edged. He tells of ringing prospective tenants, who have put in more than 20 applications for rentals, to tell them they have missed out yet again. “People keep asking, ‘Why? Why? What did I do wrong?’”

It wasn’t so long ago that Tasmania was something of a national joke. The state regularly came last in league tables measuring economic performance and growth. You could get magnificent Georgian piles for bargain-basement prices. But who’d want to live in Tasmania? It was cold and there were no jobs.



Now it’s a different story: Tasmania is enjoying its highest population growth in more than six years and is in a housing boom. Hobart has become one of the most desirable places not just to visit, but to live in and/or invest in. Hobart was the only capital city to show a rise in house prices in February, according to the latest figures from CoreLogic on Thursday. They increased 0.7% last month and also rose more – 13% – compared to other capitals in the past 12 months.

Sydney, with its astronomical property prices, agile workforce and disgruntled residents are being targeted by the Tasmanian Liberal government, who this year committed to spending $700,000 on a social campaign designed to woo Sydneysiders to Tasmania.



The campaign, showing off cheap beachfront houses and 12-minute commutes, aims to get the state’s population from 519,000 up to 650,000 by 2050.

But Tasmania’s housing boom is only good news for some. It’s tough luck if you’re a renting, with Hobart experiencing the lowest rental vacancy rates in the country in October last year at 0.3%. Compounding the problem, many rentals are disappearing from the market after being converted into short-term accommodation or Airbnbs.

Take, for example, a four-bedroom house in the desirable inner-city suburb of Battery Point. This house, according to Collidge, was rented unfurnished to tenants for about $28,600 a year.

But a tourism boom in Hobart has meant that putting the property on Airbnb resulted in a yearly income of $87,560. After adjusting the margins for expenses, Collidge says: “Even at 60% occupancy the house would pay for itself.”

He’s quick to point out that the fault of the crisis cannot be laid at the feet of Airbnb. “The issue is that everything is happening so quickly, over last 18 months. The [state] government four years ago would not have said, ‘We need to build 400 to 500 homes’ … it’s caught everybody by surprise.”

The low vacancy rates were released just as the university semester was beginning – and the foreign and interstate students the state government had wooed were looking for accommodation. “The government has been really successful in selling Tassie as a place for international students – we had 6,000 international students in 2014 but now we have in excess of 10,000,” Collidge says.



We own a house and have a garden and grow vegetables Jennifer Livingstone

If you are looking to secure accommodation in Hobart, be prepared to join a long and competitive queue.



“Last week I went to an open home in New Town [4km north of the Hobart CBD] – for rental and we had 40-odd couples and seven or eight applications,” Collidge says. “It’s not uncommon in the northern suburbs to get 60 to 80 people and 20-plus applications. There is no quick solution in sight.”

The housing crisis is so acute in Hobart that families who cannot find housing are camping on the showgrounds.

“People put up with substandard accommodation, not wanting to move or inconvenience a landlord, or they couchsurf, or they spillover to a tent city on the city’s showgrounds. Here people go to work and school – they just have nowhere to live,” Collidge says.

Housing affordability has played a part in the state election campaign ahead of Saturday’s poll, with the Liberals pledging $125m for affordable housing and a halving of stamp duty for first-time buyers. Labor has pledged $106m and a foreign investor tax.



In some ways the success of Tasmania – and its popularity, particularly with young, creative workers – is a result of Australia’s other capital cities becoming unaffordable for people on ordinary incomes. House prices that put accommodation above most average wages and, for some, a climate that is increasingly becoming more intense and unbearable are factors in decisions to move to Tasmania.

Emma Pike and her husband are the target market for the Liberals’ ad campaign. The professional couple, both in their 30s, moved from Sydney to Hobart a year ago, because of housing unaffordability in Sydney and for lifestyle reasons.

It took them four months to find work but housing has proved more elusive. They resorted to “Sydney tricks” to snag a lease.

“When it came to getting a rental – we have good salaries – we did the Sydney thing and offered more rent,” Pike says.

In this boom, existing tenants are vulnerable to being kicked out, if owners want to sell or turn the property into an Airbnb. “People are really scared of being kicked out of their house,” Pike says.



Pike and her partner have been looking for somewhere to buy in Hobart. “We put an offer on someone’s house and the tenants were petrified. They couldn’t find another rental – they would have been kicked out. This was a four-person family.”

Pike has so far been unsuccessful in buying a property in the city, as many houses they visit are going for tens of thousands of dollars above the listed price.

Collidge says: “At the moment in Tassie we have no stock and we have all these buyers sitting there, like piranhas in a pond – waiting for fish to be thrown in.”

He says the state government’s campaign to appeal to Sydneysiders is ludicrous, considering that current residents cannot find housing.



“It’s the craziest thing. Why did they do that? They would be better putting $700,000 towards how the housing shortage can be solved. Its crazy – it’s not well thought out. We’re victims of our own success.”

Bruny Island, off south-eastern Tasmania. Photograph: Dave Hunt/AAP

Outside Hobart, housing is more affordable, and those who have portable careers are increasingly moving to communities where a three-bedroom house will set you back about $200,000.

Jennifer Livingstone and her husband, Jeremy Shearn, live in Burnie on the state’s north-west coast. They moved from Perth because of house prices and climate change.

“At the time, the median rental price in Perth was $550 a week – and every rental you went to look at there was about 30 people there at the time,” Livingstone says. “A few friends were told, ‘Congratulations your application is accepted but only if you pay $20 more.’”



In Perth the couple had to move every 12 to 18 months because their leases kept running out. The houses they lived in were not suitable for the climate. “Every new house has no eaves, no verandah – nothing to protect it from the Perth heat. The weather was getting really hot. I typed in Google ‘coldest place in Australia’ and came up with Tasmania.

“We looked to moving to Hobart, which was still really affordable – we could have brought a house in the middle of Hobart on a single wage – except [in] Battery Point.”

They settled in Burnie and “in the five and a bit years we have lived here Hobart has became unaffordable”.

“We finally bought our house two years ago and it’s possible to pay it off on one wage,” she says – a situation unheard of in capitals such as Sydney and Melbourne.



“Tasmania is the only state left where you can survive on unemployment benefits, where you are able to rent and live independently on a Centrelink benefit. So many of my friends are in their 30s and are still in a share house and will never able to afford to buy their own place – or even rent by themselves.”

Increasingly, her neighbourhood is filling with young creative types who are fleeing the twin terrors of out-of-control housing prices and climate change. In Tasmania, there is the national broadband network and “it’s faster than Perth”, Livingstone says.



“We have absolutely no regrets. We own a house and have a garden and grow vegetables. We hung a picture the other day and painted the wall. Living the unicorn Gen Y dream – hanging a picture.”