Article written by Danielle Cahill and published on Realestate.com 20th November 2017
Long-term renting in Australia is increasingly driven by lifestyle factors rather than price, according to realestate.com.au’s latest Consumer Intentions Study.
Around 71% of the 1107 Australians who responded to the September survey say they would stay in a long-term rental property if they were allowed to decorate while 41% said they would like permission to change the garden.
The findings don’t surprise REA Group Executive Manager for Rent, Kul Singh.
“Once you find something, most people want to stay in it long-term,” he says.
“More and more people are finding that renting is a lifestyle choice and you don’t have to tie up your capital in mortgages.”
While data from consumer group Choice shows that only 6% of renters have leases that run for at least two years, most would prefer a longer lease.
“The average (stay) is two to three years before people move. Younger people are, I think, happier to move to trial different neighbourhoods, but younger families want to be in a longer-term rental,” says Singh.
Long-term renters are often also owners who buy a property in an outer suburban area but choose to live in an area that’s closer to work or has better amenities.
“For people who want to invest and have some kind of asset, they’re going to buy property in that outer ring but they’ll choose to live in an area where it’s convenient for work or school zones,” he says.
Recent changes made by the Andrews Government in Victoria and similar proposals in NSW to give tenants more rights show that governments are now prepared to regulate in favour of renters.
“I think governments are looking at rebalancing the power at the moment because a lot of it sits with the landlord,” he says.
The property industry should be looking to make the process of finding and retaining a long-term rental property easier, Singh says.
One idea touted by some property experts is the setting up of lower cost annual insurance policies for renters that assess their risk to the landlord yet cost a lot less than a bond.
This could free up the estimated $4 billion in rental bonds that governments across Australia currently hold on behalf of renters.
“The easier we make renting – the application process, not having to do bonds and things like that – more and more people will choose to rent and move closer to the city,” Singh says.
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