Australia set to become a nation of renters?

By Leanne Jopson | 03 Jun 2020

For Australians, the dream of owning a home is so entrenched that we practically begin daydreaming as soon as we can walk.

From family trips to Bunnings to tackle a home reno, to Saturday’s spent wandering through open homes with mum and dad, we’re introduced to the concept of owning a home and making it our sanctuary very early on.

Owning a home isn’t just a goal or an aspiration – it’s a rite of passage.

But it’s one that the next generation may not be as keen on.

According to a new report from, up to 40% of Aussies will be renters in the future.

This comes back to a range reasons, including the fact that first homebuyers are going to continue to have trouble getting into the market, despite cheaper property prices.

In Australian home ownership: past reflections, future directions, a report prepared by researchers at Swinburne University of Technology, Professor Terry Burke has examined the growth of home ownership in Australia after World War II.

The major findings?

Home ownership levels are stable…

Despite all of the talk over the last decade that housing has become more unaffordable than ever, the report found that Australia's overall home ownership rate has remained steady.

Back in 1976, more than four decades ago, around 68 per cent of the population were homeowners (keeping in mind, these percentages include people who are still paying off their own homes,

By 2016, this had dipped to 67 per cent.

In other words, roughly two-thirds of the population own their home.

… But more Aussies will rent in the future

Professor Burke estimates that around half of all Australian households aged under the age if 60 years will rent their homes off private landlords in the next 20 years.

The rate of home ownership is projected to decline to around 63 per cent for all households by 2040, with the biggest proportion of renters in the 25-55 age bracket – where around 49 per cent of households are expected to own or be paying off their home by 2040.

A massive 51 per cent of this age group is expected to be renting.

What does this mean for you today?

Now, at this point it’s important to note that all of these forecasts are just that: forecasts.

The research has been conducted by a reputable institution using best-practice methodology, but that doesn’t mean it’s always going to be accurate.

The truth of the matter is: no one knows exactly what’s going to happen to property prices or home ownership trends in the future.

With all of the instability that the COVID-19 pandemic has brought about, there is even less certainty when we look at the ‘crystal ball’ of future property price projections.

This is why I always recommend to investors and would-be property buyers that the ideal way forward is to tune out the noise of what could be, should be and may be happening, and focus on the long term property fundamentals and the facts at hand regarding your personal situation.

Professor Burke cautions that renting well into your retirement is not an ideal goal.

“As more and more people retire or leave the workforce in older age without adequate income support, there's going to be enormous poverty,” he warns.

Certainly, being able to secure your own home – or to rentvest and get on the property ladder – is going to be a giant step forwards in terms of building your financial position.

So what do you want for your future?

Do you rent right now, or do you own your property?

Do you want to become a homebuyer? What do you believe is possible for your financial future?

If becoming an investor and building your financial security is your goal, then there is nothing standing in your way.

I truly mean that.

I have seen people turn around from even the most dire of financial circumstances and they have been able to transform their situation and create wealth through investing in real estate.

I’ve seen everyday Aussies bounce back from relationship breakdowns, job loss, career changes, illness, divorce – you name it, I’ve seen it.

The reality is that if you have the right mindset, you’re willing to really put the effort in and make some sacrifices using the old principle of delayed gratification, home ownership can be within reach for you.

And more than that: financial wealth and prosperity may be within reach, too.

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Leanne Jopson is National Director of Property Management at Metropole, and has 20 years’ experience in real estate.
Leanne brings a wealth of knowledge and experience to maximise returns and minimise stress for her clients.

 

 

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