Did you know approximately 30% of Australians live in a rental property? Recent census data demonstrated that the rental population in Australia has grown from 26.9% to 30.9% since 1991. Home ownership has decreased from 68.6% to 65.5%. With these figures in mind, it’s natural to wonder is renting the new owning?
There are a couple key drivers of the increasing rental population and decreasing home ownership rates in Australia — housing affordability and changing demographics. Everyone knows the rapid price growth in Sydney and Melbourne in recent years has made housing increasingly less affordable, especially for younger and first home buyers. These buyers often have less money saved for a deposit and cannot afford to buy in the neighbourhoods where they want to live.
Changing demographics has also had an impact on the growth in Australia’s rental population. Times have changed and not everyone sees home ownership as one of life’s biggest goals anymore. Home ownership was a natural rite of passage years ago in a time where housing was more affordable. As the world has changed and the world has become a more globalised place, younger generations often value travel and living in a neighbourhood they desire over purchasing property. Like anything there are pros and cons to each decision, so let’s take a look at the pros and cons of renting.
- When you rent, you can live in a neighbourhood where you may not be able to afford to buy.
- Repairs and maintenance are generally covered by the landlord.
- Council rates and levies are paid by the landlord.
- It’s easy to try living in different neighbourhoods or property types, simply moving after you finish each lease.
- If you’re a long-term renter in the same property, you may be able to negotiate changes to the property like paint colours or changes to fixtures with your landlord.
- You usually can’t make changes to the property without permission from your landlord.
- You’re often subject to rent increases at the end of your lease.
- Your tenancy may not be renewed in a place you love if the landlord is selling or moving in to the property themselves.
The Australian property market has been in an interesting time of change and growth in recent years. As the housing market corrects to regular growth levels, it will be interesting to see if this changes the rates of renting v. owning in Australia. Watch this space!