Home ownership is still seemingly unaffordable for a growing share of the Australian population despite low interest rates for home loans.
However, with lower rates and the rise of interest only mortgages, coupled with a greater awareness of negative gearing tax policies, the lure of ‘mum and dad’ investors into the residential property market is proving to be an appealing option over owner occupying.
The Tenant Survey, conducted by Knight Frank last year, looked at trends, opportunities and drivers in Australia’s rental sector and highlighted the key characteristics and priorities for tenants across the country.
The survey categorised tenants, all of whom were living within the private rental sector, into four different groups based on socio-demographic characteristics and present insights into current and future choices.
The groups included:
- iGens (early 20-somethings about to graduate or in first job who enjoy urban living)
- Nesters (Millenials to 40-something couples who also enjoy urban living)
- Soloists (a flat of one’s own from millennials to 40-somethings, usually city living)
- Sharers (millennials to 40-somethings sharing with friends).
The results showed the younger population (34 and under) saw affordability as less important (46%) than older renters (61%) but viewed transport of a greater concern than renters aged over 34.
For those under 34, 30% cited the proximity to transport links to the ease of the commute to work as a factor when looking at an area, compared with 20% for those aged over 34.
The findings showed that 75% of iGens, who as with all other categories typically allocated more than half of their net monthly income for rent, would consider paying a premium for a swimming pool and 72% would pay extra for access to a dedicated secure parking space.
Asked the same question, 50% of Nesters would consider paying more for a rental with reverse cycle air conditioning while 56% would up their rental budget for access to an en-suite bathroom for each bedroom.
In addition, 40% of those under 40 also said they would pay more for an on-site gym.
The survey also found 63% of iGens, 56% of Soloists, and nearly half (48%) of Nesters and Sharers believed they would still be renting in three years’ time.
According to a 2018 study by development group Crown, one of the big impacts of living in a digital age where everything is built for convenience, is the fact that today’s renters – in particular those willing to splash the cash – also wanted to take full advantage of all that smart homes and mod cons have to offer.
“[They want] to be able to turn on the heating during their commute home. They want to be able to access security remotely, link their music to the home speaker system and preheat the oven from the sofa.
All of these things are possible, and landlords need to be able to provide all these features to remain competitive,” the report noted.