The University of Melbourne’s 2016 ‘Household, Income and Labour Dynamics in Australia Survey (HILDA)’ report shows a decline in homeownership and an increased reliance on rental properties in Australia.
According to HILDA, only 51% of Australians aged 18 and over own their own hom. This is a 6% decline from 2002 with the expectation that by next year, only half of Australian’s will own their own home.
The table below illustrates the decline in homeownership from 2002 – 2014 across the different age brackets.
|Age||Home Ownership % in 2002||Home Ownership % in 2014|
The household, Income and Labour Dynamics in Australia Survey (HILDA) by the University of Melbourne – https://www.melbourneinstitute.com/downloads/hilda/Stat_Report/statreport_2016.pdf
Whilst homeownership is on the decline, the amount of disposable income individuals have has drastically increased, indicating that Australian’s are actively choosing to spend their money on lifestyle rather than purchasing their own place of residence. The average annual disposable income per household has increased over 25% from $58,00 in 2001 to $76,000 in 2014. The increase in disposable income illistrates that Australians are saving more money to ‘have fun with’ and live and socialise in the lifestyle driven inner-city suburbs. It is now more important than ever to invest in suburbs that emphasise lifestyle and a work-life balance.
With the number of Australians choosing to rent over purchasing property and Melbourne’s rapidly increasing population, it is hard to find validity in rumours of apartment oversupply. Now more than ever an investment property is the essential piece in your investment portfolio.
Reasons Australians are renting:
Owning a home in lifestyle driven areas comes with a higher price-tag which many renters cannot afford. By renting in suburbs that boast the bustling lifestyle of inner-city living, renters can have their cake and eat it too. They live in the area of their choosing, without having to worry about the higher price-tag that is attached to these postcodes.
Australian’s are also choosing to rent to be closer to their place of work, to ensure that their work-life balance is maximised. Your tenants most likely will work long hours who do not want a lengthy commute. They want a short trip home and to be able to relax and walk down the street to a restaurant or bar without having to get back in their car.
Many Australians are unsure of what they want out of a property or suburb or where they want to settle down, which is what is making renting more appealing than purchasing a property to live in. Renting provides Aussie’s with the luxury of upgrading or downsizing at their leisure, trying new suburbs and cities for work or fun without the financial stress of stamp duties and selling/purchasing costs.
Purchasing a home, especially for first-home buys is a challenging feat, and for many Australians this may simply be out of reach. Renting provides people with the financial freedom from mortgages, property maintenance costs and council rates, whilst allowing them to save their own money and not sacrificing on their lifestlye.
For more information on property investment, contact Solid Group on (03)9690 2666