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The dream of owning a home seems to become exactly that: a dream.
“We are moving towards a country where many young people are renters for life.”
This is Professor Emma Barker, principal investigator at the Australian Housing and Urban Research Institute (AHURI) at the University of Adelaide.
She says housing in Australia is facing profound change.
“That tipping point where we were once a nation of homeowners and everyone thought they would rent for a bit after they moved out of their house and then take out a mortgage and own their own home. We have truly become a nation where there are people with mortgages and there are people who are renters and then there are outright landlords. So we’ve sort of gone from being a landlord country to being a tenant country.
New data released by the Institute after a survey of more than 22,000 families found that half of rent increases over the past 12 months were above 10 per cent and one in six were above 25 per cent. hundred.
Meanwhile, the report found that 78 percent of renters still want to buy a home, but 59 percent think they never will.
One reason is that rising rents have made it difficult for people to save enough money for a down payment on a house.
“Everyone recognizes that this type of ‘deposit gap’ is a real problem for people wanting to access property. As a result, people in some of the biggest cities are finding it increasingly difficult to simply obtain a deposit to access property. Some tenants, however, are It’s quite strategic in the country and they buy a house in a place where they can afford to buy a house and rent where the work is. so let’s call rent investors, and this shows that this kind of young people tenants are rather calm in the way they move around the housing market.
But even though this is a workaround, it still doesn’t solve it.
Kelly Ryan, CEO of the Real Estate Institute Victoria, says one way to tackle the problem is to move to long-term leases.
“Commercial rental leases are typically for more than five years, so this leads to increased expectations for how the tenant looks after the property, so they have more responsibility for part of the lease. maintenance during this period And on the other hand, the lessor obviously has the certainty of renting for the longer term. What we would also like is for lessors to be encouraged to keep their properties on the rental market. in the long term and thus benefit from reductions in property tax longer. they hold their properties in the rental market, just to try to ensure that we continually have a significant supply of rental properties in the market to meet the needs.
Currently, rental periods in Australia average between six and 12 months.
Professor Barker says longer leases can also help provide a sense of belonging for those who still dream of owning a property.
“I think people want the opportunity to put down roots. And I guess that’s what your home tends to give you. If you have a lease term where you have a little more security and duration, this means you can enroll your children in the local primary school and know that you will still live in the area, work or even do things at home that will improve it.
However, Amanda Rishworth, Australia’s social services minister, says new policies must take into account the wishes of Australians.
“We want people to aspire to homeownership if that’s what they want. And that’s why our goal in housing is to increase supply, to build more housing, because “Ultimately, building more housing means there are more homes to build, more homes to rent and more homes to own.”
Regardless, Professor Barker says recognizing this new era of the property market is the first step in addressing Australia’s transition to a nation of renters.
“I think that’s something that has happened and I don’t think it’s necessarily a bad thing. I think once we recognize that Australia is more of a nation of renters, we can then begin to formulate policies, approaches and ways to deal with the problems.”
And this does not necessarily mean failure for the nation.
Ms. Ryan says there are other ways to measure success.
“Australia was once known for home ownership being the pinnacle of financial success. But I think we all need to start realizing that perhaps there are other ways to quantify success on the real estate market.”
