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Before Sue Hickey entered state politics as a Liberal MP in 2018, she was Hobart’s lord mayor. Pledging to clean up public toilets and local politics, she also took a keen interest in the plight of people experiencing homelessness.

“You’d see these faces come out of nowhere,” Hickey says, recalling night tours of the city with food van staff and volunteers.

“You’d arrive, you wouldn’t see them, and then all these people just desperate for a sandwich and a Milo with five sugars would appear.”

Those outings were an eye-opener for Hickey, but for most Tasmanians homelessness and housing insecurity were out of sight, out of mind.

But on an autumn day three years ago Tasmania’s chronic underinvestment in public and social housing – and its growing social need – became public knowledge. The veil lifted when a group of Tasmanians with nowhere else to go turned up to camp at the Hobart Showgrounds. As word spread that the showgrounds’ boss was letting them stay, a trickle became a stream.

The site is just up the road from Hickey’s electorate office in the lower-income northern suburbs, where she will stand as an independent for Clark in the 1 May state election, having lost endorsement as a Liberal when she accepted Labor and Greens support to win the Speaker’s chair.

The former Liberal MP Sue Hickey, now an independent, campaigning in Hobart. Photograph: Amanda Ducker

“What we had was all these people pitching tents and in caravans and the poor guy running it [Royal Agricultural Society of Tasmania president Scott Gadd] was inundated,” Hickey says.

“Housing and health are the two things that are crippling the state.

“We have to get middle and upper-class Tasmanians – my Liberal colleagues – to understand the economic cost of failing to [initiate] a Housing First model.

“When do we stop people just looking down their noses or being annoyed or inconvenienced that there’s a beggar on the footpath and thinking ‘why aren’t you getting a job?’.

“Liberals are very big believers in ‘the market will sort itself out’, but this approach has failed desperately in housing and health in Tasmania.

“Overwhelmingly housing is the biggest area of concern for my office. There are simply not enough houses.”

‘Cashed-up mainlanders’

As housing stress hits an all-time high in Tasmania, it is shaping up as a key election issue.

The government’s Human Services Dashboard shows public housing register applications (which are for households, not just individuals) reached 3,813 in December, up from 3,507 in January 2020, with priority households waiting 53.9 weeks for housing.

Housing in the Hobart suburb of Bellerive. Photograph: Dave Hunt/AAP

Homelessness services are stretched and the signs of large numbers of people sleeping rough are everywhere.

Housing insecurity is affecting many more Tasmanians in less extreme ways. The residential real estate market is turbocharged. Demand is far outstripping supply, with housing stock 25% lower than the five-year average. Homes are taking just nine days to sell on average. And prices are surging, meaning home ownership is moving out of reach for many younger Tasmanians.

This may be a familiar story in Sydney and Melbourne, but in Tasmania middle-class families are ill-prepared and in shock.

This month’s CoreLogic Home Value Index reveals Hobart’s median dwelling value is $548,686 – $65,000 higher than a year ago – making it more expensive than Brisbane, Darwin, Adelaide and Perth. Prices are soaring in regional Tasmania, too, including for land.

While 87% of residential sales last year were to Tasmanians, real estate agents report great interest from interstate, with sales expected to increase in line with nationwide easing of travel restrictions.

The perception of Tasmania as a Covid-safe bubble only adds to the southern state’s allure – and to the price of land and homes. The last thing many Tasmanians want is a bigger influx of “cashed-up mainlanders” driving prices ever north.

“Come in a caravan, by all means,” Hickey says.

The rental market, too, is the tightest in the country. February data from PRD Nationwide shows a vacancy rate of 0.6%, compared with 0.9% a year before (the Real Estate Institute cites 3% as a healthy vacancy rate). A recent Greens bill to protect tenants from unreasonable rent rises failed to win support.

Real Estate Institute Tasmania president Mandy Welling is using the rental crisis to campaign against land tax. While the rate has not increased, dramatically higher valuations mean holiday homes and investment properties are subject to much higher bills. And that could deter interstate investors, Welling told Launceston’s Examiner this month.

The Tasmanian premier, Peter Gutwein, is widely expected to be rewarded rather than punished at the May poll for his handling of the state economy over the past year. Photograph: Rob Blakers/AAP

“It’s very scary,” she said. “Already there are way too many people who have nowhere to live, way too many people living in properties they can barely afford.”

Labor’s housing spokeswoman, Alison Standen, says the minister, Roger Jaensch, is presiding over the worst rental and housing crisis in Tasmania.

“Mr Jaensch’s claim that the Liberals are building more homes than ever before for Tasmanians is clearly at odds with the facts – including his own recent admission that he’s delivered a net increase of only five new social housing properties over the past year,” Standen said in a statement.

The government maintains it is on track to deliver up to 1,500 new social housing dwellings across the state by June 2023.

Jaensch said in a March statement that the government’s $100m commitment to increase the supply of social and affordable housing in Tasmania was “a record investment”.

Living the dream’

With the Covid moratorium on evictions and rent increases and the national rental affordability scheme both ending, another wave of housing stress is swelling. The recent end of jobkeeper and reduction of the jobseeker supplement is expected to make things worse.

Tex, who slept near the Royal Hobart Hospital, says he has not voted since the 1980s. Photograph: Amanda Ducker/The Guardian

Even so, the premier, Peter Gutwein, is widely expected to be rewarded rather than punished at the May poll for his handling of the state economy over the past year.

There will be few votes – for anyone – from the homeless men who were sheltering from cold rain under a courtyard awning in Hobart’s CBD last Sunday morning, after the overnight temperature plummeted to 5C.

David, an out-of-work welder from Alice Springs who slept in his car, planned to vote Labor because he always did. Tex, who slept near the Royal Hobart Hospital in case he had another epileptic seizure or major cardiac event, said he had not voted since the 1980s. Gavin, who was waiting out a two-hour lag between his emergency overnight accommodation closing at 7am and a sister day space opening, did not plan to vote either. What was the point, he wondered, peering out into the bleakness.

“Living the dream,” he said, describing life without a home. “Look at it. It’s fucking horrible, that’s what it’s like.”