OPINION: OUR 2011 rental market survey has found that seven out of ten tenants are looking to buy, but until that takes place, most want to stay in their current accommodation and are willing to pay more in rent to do so.
And with three-quarters paying under a third of their income in rent (and half paying less than a quarter of their take home pay on accommodation costs), it looks like they can afford to do so.
This is good news for landlords and the residential market in general. Where end prices go from there (in the short-to-medium term at least) is dependant on rental growth. Two-thirds of the renters surveyed say they are prepared to pay up to 5% more in rent in order to stay put, with a further 30% stating they would accept a greater lift. Apartment renters seem more willing to accept a higher increase in rent than those renting detached dwellings.
Two out of five renters think that the rental market in their area is balanced, with another third saying it is undersupplied.
Those who aren’t prepared to pay more rent will either move to a less expensive area (43%), move to a lesser property in the same area (37%) or sublease/share with others (19%) to help pay the rent.
Renters, like owner-residents, don’t really move that far when it comes to finding new digs. Close to a third find new accommodation in the same suburb they already live in, with a further fifty percent (47%) moving to a neighbouring suburb. This survey has found that more are choosing to move a bit further out. Our rental survey last year found a stronger inward movement.
The seven most important things when looking for rental accommodation are the actual rent, followed closely by the general location; then the number of bedrooms; the lease arrangements; dwelling type; off-street parking and how quiet the immediate area is. What would be nice to have but isn’t important
enough to pay more in rent for include lots of bathrooms, fancy internal housing designs or nearby visitor parking.
What isn’t important at all –according to our survey anyway –is the ability to keep pets (53%) and environmental sustainability measures (47%) such as rain tanks, solar power and other water/energy saving devices. Many commented that fast internet connection was far more important than the “green” stuff. Just over half looking to buy anticipate doing so within the next twelve months. The lack of a deposit is what is stopping most. A further 20% will do so when end prices substantially drop. This segment might be renting for some time to come.
By Michael Matusik, managing director of Matusik Property Insights.*
Property Reviewer on Property Review
