“Further growth” in Hobart rental prices to put the squeeze on families. Picture: SUPPLIED

HOBART’S median rents are set to push beyond $550 a week within two years, a property investment expert predicts.

Propertyology head of research Simon Pressley has forecast “further growth” in Hobart’s rental sector and an increase in property prices.

Mr Pressley said rents commonly start to rise when vacancy rates fall below 2 per cent and Hobart was far below that at 0.6 per cent in July according to his research.

This metric is also a “back-of-the-beer coaster” indication of pressure building in a property market, he said.

Propertyology head of research Simon Pressley sees positive signs for investors and possible tough times for Hobart renters.

While there are a variety of different metrics that provide insights into future market performance, Mr Pressley said rental market conditions are a good indicator.

He said rents for a standard Hobart house have increased by about $100 per week over the past two years.

CoreLogic data in October showed Hobart’s median rent was now $464 per week – $7 more than in Melbourne.

“The odds would suggest it is likely that Hobart rents will be $100 more expensive again two years from now,” Mr Pressley said. “There is nothing in the measurable future that we could point to and say, that will make a huge difference to Hobart’s low vacancy rate and return it to the 2-3 per cent range.

“I believe it will be quite some time before it is above 2 per cent.

“However, Hobart still has the best overall fundamentals of all capital city property markets and Propertyology anticipates that rising rents and reduced interest rates will trigger an increase in first homebuyer activity, thereby further extending the growth cycle within Hobart’s property market.”

Propertyology rental graphic; a picture worth a thousand words.

Meanwhile, the latest data from realestate.com.au shows 15 Tassie suburbs where the annual rental growth figures are in double figures.

Most were located in greater Hobart alongside northern additions Kings Meadows (10 per cent), Newstead (10 per cent) and Penguin (11 per cent).

The largest growth figures were in Lenah Valley, Taroona and West Moonah (between 14 and 15 per cent) and Brighton at 16 per cent.

Chief economist at realestate.com.au Nerida Conisbee recently described Brighton as “nirvana for investors” with its high rental yields combined with strong capital growth.

The latest quarterly report from the Real Estate Institute of Tasmania indicated a continuation of Hobart’s rental crisis was “highly probable” through the summer season.

It showed a limited, slow release of land to market had resulted in land sales figures dropping significantly (19.5 per cent) alongside a 22.2 per cent annual decline in investor activity.

Last week, the ANZ’s Housing Affordability Report revealed multiple regions where a mortgage was more affordable than renting and labelled Hobart Australia’s most expensive city with renters dedicating a nation-leading 33.9 per cent of income to their rent.