Rental Affordability From A Tenant's Perspective - Findings From The Australia Talks National Survey
You may have heard or even participated in the ABC's Australia Talks survey project.
In July 2019, the Australia Talks National Survey asked 54,000 Australians to share their thoughts and feelings on almost 500 questions "about their lives and what keeps them up at night".
While the topics covered were varied, a summary has recently been compiled highlighting a selection of findings specific to the differences in points of view between landlords and tenants.
Most interesting were the opinions of renters about the affordability of rentals and housing in Australia.
Renter's Opinions About Housing Affordability
Some of the findings specific to housing affordability from a tenant's perspective included:
Further Thoughts On These Results
Being in the business of property management allows us a unique perspective. We speak daily with investors and tenants, and hear and share the highs and lows experienced by each.
It is understandable that many tenants have concerns around the ongoing affordability of the suburb in which they rent. Perhaps of some comfort, and despite popular opinion, we can say from experience that the investors we work with are very rarely focused solely on maximising rental income. In reality, we often complete rent reviews for our investors providing data which suggests rent could be increased to maintain balance with changes in the market. Tenants would be surprised to know just how often investors respond that they would prefer to leave the rent unchanged to ensure a happy and long term tenancy, rather than increase to keep up with market conditions.
Of course, this doesn't mean rent increases are rarely applied. An investor may have absorbed several rounds of CPI increases, insurance and rate increases without passing any of this on to the tenant. Or, for any of a number of other reasons, the time comes that a change needs to be made for the investment property to remain viable for the investor and tenant alike.
It is interesting that 52% of renters feared they would not be able to continue to afford where they rent, while 45% said they spent more than they could afford on housing. This data suggests than many of these 52% actually can't afford to rent where they are now, let alone into the future as asking rents increase in their suburb.
More fascinating is the finding that almost 1 in 5 from the highest income bracket said they feared not be able to continue to afford where they rent. What the data doesn't tell us is how the respondents define affordability of their rent. Did some respondents consider the rent unaffordable because every other financial choice is paid first without any compromise e.g. new car loan repayments, Netflix / Foxtel subscriptions, bought meals out, latest phone plans, holidays, etc.?
This comment is not intended to make light of genuine financial stress tenants may feel. It is simply an unknown what has gone through each survey respondent's mind when assessing whether they believe their rent is and will continue to remain affordable to them.
Regardless of income, the amount spent on housing is a choice. Just as all other discretionary spending is a choice. Affordability for some respondents may not always be prioritising the former over the latter.
To view more findings from the survey specific to the differences in points of view between landlords and tenants, view the article "Renters and home owners see the world through different eyes".
Carnelian Property Management Newcastle NSW
We are a family-owned and run Newcastle real estate agent offering expert property management across Newcastle and Lake Macquarie.
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