Hobart businesses need to retain young workers: TAS
Led by the Mona-effect, visitors and investors have headed south to Tasmania in droves in recent years. Business owners have benefited but not without side-effects. Today, on our Federal election series, we look at Tasmania.
The last five years have delivered Hobart a spike in economic activity underpinned by tourism investment and expenditure, a shortage of industrial property and a competitive CBD office vacancy rate of 5.9% - the next best performing capital city behind Sydney and Melbourne.
But growth – whilst still healthy – began to slow in 2018 and is forecast to end FY2019 at 3.5% before averaging 2.5% p.a. over the next three years.
The CBD’s main employer, the Tasmanian Government, is undergoing staff rationalisation which is paring back growth.
According to Managing Director of LJ Hooker Commercial, Mathew Tiller, Tasmania’s challenge is in retaining blue collar junior workers.
Hobart’s housing sector has been a victim of its tourism success with investors taking their properties out of the permanent rental pool and cashing in on the short-stay market.
The residential vacancy rate in Hobart is currently 2% and the median weekly house rent is $430 – higher than Perth, Adelaide and Brisbane. Many young people are spending close to half their earnings on rent (Rental Affordability Snapshot Tasmanian 2018)
“Hobart has been in the grip of the MONA-effect for several years, with the median house price rising double digits (13.3%) last year,” said Mr Tiller. “Tourism is driving the state’s economic fortunes. The tourism sector had a break-through year in 2017 with an 18% increase in international visitors, with the same group growing another 11% year-on-year to December, and expenditure rising 13%.
“One on five properties that changed hands in Hobart last year went to a cashed-up mainland buyer.”
Mr Tiller said housing affordability was key to retaining buoyant workforce.
“The problem that such accelerated growth brings is affordability for the lower-income market. For small businesses looking to put on an apprentice, a labourer or another junior worker, they could have trouble finding applicants. There could come a tipping point where young people seeking employment decide that the lifestyle on the mainland is easier.”
Whilst the state’s tourism industry was strong, Mr Tiller said it was in the interests of the wider business community to diversify its offerings.
“Like any city, diversification is key to mitigate any downturn in one specific industry. For all the natural wonder and cultural experiences that Tasmania has become recognised for, it needs to widen its business offering.
“Hobart won’t attract Corporate HQs from the finance sector but it’s an appropriate destination for greentech, marine, creative incubators and more.”
For media information:
PR & Communications Consultant
M: 0427 916 020