Home ownership remains the plan for tenants
Capital city price growth has not ended the dream of property ownership for tenants, with a survey of renters suggesting a steady stream of first home buyers over coming years.
A survey of more than 700 tenants living in properties managed by LJ Hooker indicated home ownership was the most likely living scenario (44%) for respondents in five years’ time, followed by living in their current rental (26%).
Renting was actually identified as a way for 27% of respondents to save money for a housing deposit.
Despite recent price growth making entry to the market for first home buyers more challenging, LJ Hooker’s Head of Research Mathew Tiller said the expectation of ownership was ‘still alive’.
“There’s no doubt that price growth has made saving for a deposit in cities like Sydney and Melbourne more challenging, so it will surprise many that almost half of the respondents still expect to make the leap to home ownership in coming years,’’ said Mr Tiller.
“But in many regional areas and Perth, for example, first home buyers have the best chance in a decade to enter the market due to record low interest rates and a high number of listings reducing the amount of market competition.
“Home ownership is still the ‘end dream’ and tenants believe it’s their most likely living scenario in the medium future.”
Security of tenure was the biggest concern for tenants (28%), while only one per cent of respondents though ‘rent money is dead money’.
The LJ Hooker Tenant Survey also removed some misconceptions about tenants.
“The results indicate that renting is not simply a milestone for young adults who leave home on their path to independence,” said Mr Tiller. “According to the responses, 25-34 year olds (31%) and 35-44 year olds (24%) represented the majority of tenant groups, but people as old as 55-64 (10%) were still tenants.”
LJ Hooker’s Head of Property Management Amy Sanderson said 21% of survey respondents earned in excess of $100,000 per year.
“Renting is not simply the choice of people who can’t afford to buy,’’ said Ms Sanderson.
“There are many people who choose to rent for lifestyle choices such as being close to friends, CBD shopping, restaurants or work.
“Tenants are of all ages and a diverse mix of incomes. Not all tenants are simply looking for the cheapest rental; they can be just as discerning as home buyers, wanting a range of property features and nearby amenities.
“Landlords need to understand the diverse mix of tenants and that a ‘one size fits all’ approach is not the best way to maximise their investment. It’s best to talk to your local property manager to find out what the demand is in your local market.”
To read LJ Hooker’s Tenant White Paper, head to myljhooker.com