Aussies stuck on rental roundabout

Aussies stuck on rental roundabout

Posted on Thursday, April 24 2014 at 10:06 AM

The dream of a white picket fence could be a thing of the past with many Australians stuck on the rental roundabout, according to a report released by

The Housing
Sentiment Report
– examining the lifestyle preferences and
affordability concerns of buyers and renters – showed one third of tenants have
been in the rental market for five-plus years, with affordability a major
deterrent to entering the market.

The report asked the often “forgotten’ property hunters – renters – what
is preventing them from buying, and revealed:

  • Half
    believe they can’t afford a deposit;
  • 32
    per cent believe they can’t afford mortgage payments;
  • 28
    per cent say they haven’t bought a property because they can’t afford to buy
    where they want to live;
  • 25
    per cent think the market is overpriced;
  • 22
    per cent believe it’s cheaper to rent;
  • 18
    per cent have difficulty obtaining finance;
  • 16
    per cent don’t want to be tied down because of a mortgage;
  • 12
    per cent have already bought an investment property.

Estate Institute of Victoria (REIV) data shows Melbourne’s median home prices
grew again in the March quarter, taking annual growth to 13.7 per cent and
confirming the strength of the property market.

“A clear
trend is emerging – housing affordability pressures are breeding a nation of
renters,” Petra Sprekos, general manager of said.

“The great
Australian dream of home ownership is fading for a significant percentage of
the population either because they feel unable to obtain and manage a mortgage,
or because it’s too expensive to buy into the area they rent in.”

to the search data, the top 20 most searched suburbs to rent in Victoria over
the past six months were predominantly inner-city and affluent mid-suburban
areas including Richmond, South Yarra and Hawthorn.

current weekly median rent in Richmond is $500 for a two-bedroom unit and $700
for a three-bedroom house. In contrast, the weekly mortgage payment in this
area is around $961 for a median priced unit and $1457 for a median priced

But investing
to get a foot on the property ladder is proving a more viable alternative for
some renters. Of those who have bought investment properties, 44 per cent say
they chose this tactic because they make more money from the rental income
and/or negative gearing benefits. A further 38 per cent say they’re renting
while investing in cheaper properties because they can’t afford to buy in the
area they want to live.


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