There are just over 9 million private dwellings across Australia. At any one time about 85% or 7.8 million of them are occupied on a full-time basis.
Of these 7.8 million occupied dwellings, around a third are owned outright (no mortgage); just over a third are held with a mortgage and just under 30% are rented.
There are about 2.3 million rental households in Australia.
So who are these renters and what dwellings do they occupy?
Of the 2.3 million rented dwellings – 55% of them are detached houses; 30% are either units or apartments and 15% are semi-detached or townhouses.
One in every five detached houses is rented out on a permanent basis; half of the country’s townhouses are and two-thirds of the nation’s apartments are occupied by tenants.
These numbers help quantify things further:
- 1.3 million detached houses are rented
- 210,000 villas or single storey attached homes
- 145,000 townhouses or double storey row/terrace homes
- 490,000 low-rise units
- 170,000 medium to high-rise apartments
- 15,000 caravans
Despite the increasing barrage of reporting about downtown renting – the vast majority of renters live in a suburban setting. And most live in detached dwellings and low-rise (one or two storey) walk-up units – many of which are some distance from the inner city.
My first comment is that rental demand takes place across the whole of our urban landscape and isn’t just a thing that pertains to the inner city or medium/high-rise apartments.
Now, who rents?
Just under 30% of Australia’s renters – 645,000 households – live alone.
The next largest rental group with a 23% market share or 520,000 rental households are childless couples or couples whose children have flown the coup (lucky buggers!). And 200,000 renters live in what the ABS call “group households”.
Yet, two out of five households are families with children living at home, with half of them being single-parent homes.
My second comment is that most renters share accommodation with their partner, another adult(s) or their children. Rental space often needs to be shared. It also needs to be designed in such a way as to allow flexibility. The key to getting more rent is leasing space that can be easily shared.
Seven out of ten units and apartments in Australia support one and two person households. And this might suggest that tight apartment designs – the current flavour of the month – are warranted. But the higher the apartment building the fewer the proportion of single person households – they drop, for example, from 52% in walk-up units to 39% for high-rise apartment product.
My third comment is that one-bedroom apartments are a very worthy investment consideration, but one must be careful not to buy something so tight that it cannot be occupied for any length of time. Ditto for two-bedroom apartments. Useable space – and the right space(s) – matters when it comes to apartment living. Don’t just buy an apartment – or any investment property – based on price alone. There is nearly always a Catch-22.
Did you know that real estate agents control just over half (54%) of the residential leasing across Australia?
One in four rental properties are managed by parents or other relatives or sometimes a third-party, and whilst the arrangements are often no doubt commercial, actually how much rent is being paid and the length/conditions of tenure are largely unknown.
A further 15% of rental properties are controlled by state/territory housing authorities.
My final comment is that whilst a sample of 1.25 million rental properties is a pretty good one, the reported figures with regard to vacancies and especially median rents, reflect just half of the machinations taking place in the rental market. Beware of those spruiking large increases in median weekly rents, especially when the sampling is suburban in scale.
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Michael Matusik is the director of independent property advisory Matusik Property Insights and writes the Matusik Missive which is free, however, reprinting, republication or distribution of any portion of this material, or inclusion on any website, is strictly prohibited without the written permission of Matusik Property Insights and may incur a charge.
Source: Property Update