THE growing – and ageing – cohort of renters in Australia is increasingly concerned about the “life the house gives” them and are willing to spend more to ensure longer lease terms, rent protection and better quality housing, a new report shows, suggesting federal and state governments need to reassess housing policies.
AHURI’s latest report, Planning for a Two-Tenure Future, details that renting is on the rise in all capital cities and across almost all age brackets.
Stretched affordability on the back of a house price surge in recent years means that almost 60% of current renters are confident that they’ll own a home in their lifetime.
“We’ve just seen a shift from Australia being first and foremost a home ownership nation, then increasingly a nation of people with mortgages, and then people with rents and then outright homeowners,” professor of housing research at University of Adelaide, and co-author of the report, Emma Baker, told Australian Property Journal.
“We’re on this flip-point at the moment where there are possibly now more renters than outright homeowners in Australia.”
Renters have had to deal with ongoing increases in rents and historically low vacancies, but are now looking beyond that to security of tenure and liveability. The report found that renters would pay $127 extra every week to be able have above-minimum standards, such good insulation, heating and cooling, and regular upgrades. They would also pay $77 per week more if it meant their rent could not be increase by more than 5% every 12 months, and $72 per week if they were are to extend the lease indefinitely subject to paying rent on time. Overwhelmingly, renters, regardless of whether they are pet owners themselves, want the freedom to have the right to keep pets.
“I think what those things are telling us is that renters are really concerned about affordability, but maybe affordability is not actually the central concern of many renters – instead, it’s the life the house gives you. It’s that security of tenure, being able to change things – paint the walls, put pictures up – have pets,” Baker said.
“One of the big things is security of tenure. For people who are renting, there’s a higher likelihood that if you paid your rent that your lease is going to be extended. But you still have that six-to-12-month position where things can change.”
The report said these areas provide “direct priorities for policy development”.
Victoria’s Allan government has just unveiled a raft of changes that will give more power to renters in the state, including the threat of fines for landlords who make dubious claims on a tenant’s bond, and a ban on no-fault evictions. That came hot on the heels of the NSW Minns government passing legislation that capped rent increases to one year, banned no-grounds evictions and made it easier to have pets in rentals.
However, the report noted that while private rental is becoming a long-term and mainstream housing option, there are still inadequate policies targeted towards supporting this tenure change.
Ageing cohort requires attention
The report emphasised that the profile of who rents in Australia is changing.
“The nation’s rental sector is ageing. Whereas once private rental was seen largely as a tenure of transition in the early life stages on a journey to home ownership, renting now has a much more mainstream age profile.
“Renters are older, and elderly people are increasing likely to rent.”
Baker told Australian Property Journal in Sydney, even 80-plus year olds are now more likely to rent than they were before.
“That gives you reason for change in terms of policy implications. Our whole welfare system is set up on this basis that in Australia you have your retirement, you have your home that you can lean on, you might have an investment property as well. So, some people are doing quite well but then there’s this growing group of older renters in their old age but they don’t have the nest egg, or the asset at the end as well.
“In terms of the population who you worry about who normally would have found a home in social and affordable housing, it’s like those older renters who either never transitioned to home ownership or have fallen out and don’t have that asset. Social and affordable housing, traditionally, was a landing place where people could have security, tenure and affordability. That doesn’t exist for many people in an Australia where you’ve only got 3.5% of the housing stock being social housing.”
The report said that while older renters “are not a new phenomenon in the private renting system, older renters at this scale are”.
“This suggests that an important policy focus should be understanding the requirements of older renters and enabling them to rent because they want to be tenants.”
