The reasons Australians rent, where they like to live and the type of property they prefer has changed dramatically over the years and will continue to adapt as time goes on, a report has found.
This month’s issue of Australian Property Investor magazine explores the changing nature of renters, including the typical household makeup, motivations for being a tenant over a homebuyer and the areas most in demand.
Louis Christopher, founder of SQM Research, says the data shows some clear shifts in demographics.
“At the moment, the nuclear family is the most common household in the country – mum, dad and kids – that’s 33% of all homes,” Christopher says.
But not for long. The fastest-growing household is the no-kids couple, already accounting for 30% of all homes and set to overtake families to gain top billing.
“Partly, it’s generation Y delaying having kids until they’re in their 30s, so there’s now an extra decade where a couple doesn’t have children compared to older generations – and those young people are more likely to rent.”
Another small contributor to the growing pool of renters is ‘emptynesters’ or downsizing baby boomers whose children have left home.
Another significant trend is overseas migration, which now accounts for the largest increase to Australia’s population each year – or 60% of annual growth.
“That’s the highest it has been for some time. Net migration was around 400,000 people in the past 12 months – that’s two Darwins each year. When new arrivals settle, they tend to gravitate towards middle and outer suburbs in capital cities, close to sought-after amenities and services, and they’ll almost certainly rent.”
These migrants aren’t content with renting though. Demographers say new arrivals rent because they have to, but they aspire to own their own home as soon as possible.
“In stark contrast, young Australians are putting off buying a home in favour of renting and the flexibility it offers them. That’s very much unlike their parents and grandparents.”
Younger generations rent for lifestyle reasons, not because they need to. While housing affordability, or the difficulties associated with buying a first property, does play a part in this trend, this cohort of renters wants to be in the inner city, close to education and work hubs, surrounded by desirable facilities and near transport.
“All of those demands have them gravitate towards a rental property. And while younger Australians are happy to rent, they’re not keen to put down roots and will on average move to a new rental property every 18 months or so.”