With the barriers to homeownership becoming more entrenched, property management is being disrupted by growth in the private rental sector (PRS). And while growth has been accompanied by industry restructuring and evolving social norms, more needs to be done to improve renters’ experience, according to new research from the Australian Housing and Urban Research Institute (AHURI).
Researchers from Swinburne University of Technology, UNSW Sydney, and Curtin University analysed data from the ABS and HILDA. They also conducted in-depth interviews with 42 people involved in all aspects of the PRS to attain an updated understanding of the sector.
In the 10 years to 2016, they found that the number of Australian households in the PRS increased by 38%, more than twice the rate of household growth. Over the same period, there was a 42% increase in lending to investors in the PRS.
“Rental property management has grown in importance for real estate agents in the Post-GFC environment,” said Chris Martin, professor at the University of New South Wales. “Property management has grown as a source of real estate industry revenue from an average 23 per cent in 1992–93 to an average of 44 per cent in 2014.
“The rent roll provides stable revenue that counter balances the volatility of the housing sales market, and covers an increased proportion of fixed business costs.”
The AHURI study found that the rental property management sector has been changing, with some moves to consolidation as well as the introduction of new digital technologies and intermediaries.
While technological developments have opened up the prospect of landlords and tenants bypassing real estate agents, the share of properties under real estate management has grown.
There is some evidence that the increased importance of rental revenue for agents means good tenants are increasingly valued. Moreover, the AHURI study found that some agents are sensitive to online reviews, with some of the new technologies around apps and communications with property managers offering greater convenience for tenants.
However, the report raises concerns about the way new technologies and intermediaries are collecting and using data about tenants.
“Our current regulatory regimes may not be adequate to address the potential for exploitation and problems in accessing rental housing,” Martin said. “This needs attention.”
“The need for greater professionalisation in rental property management was a common theme in the interviews. Expectations of service are increasing and there is scope for the sector to improve the sometimes difficult role of rental property management,” he added.
“This could include building on some industry-led initiatives to improve practice in rental property management, including better training and good practice networks. But we also need landlords to see themselves not just as ‘investors’ but in the business of providing housing services, and we need stronger laws that hold them to account.”
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