Swinburne University of Technology has produced a new report, Australian home ownership: past reflections, future directions, that looks at the levels of home ownership in Australia looking as far back as World War II, predicting what we can expect in the future. Still considered the great Australian Dream, owning a home is something that many want to achieve in their life. For some however, it could be just that, a dream as up to 40 per cent of Australians could be life time renters in the future, according to the report.
The predicted increase of Australian renters in the coming years is expected to be driven by several factors, mainly speaking – ongoing affordability challenges. Interestingly, the report found that home ownership levels in Australia have been relatively stable. In 1976, approximately 68 per cent of people were owner-occupiers. Compare this to 2016, around 67 per cent of Australians were owner-occupiers which is not a huge change.
Approximately 50 per cent of Australian households under 60 years old will rent from private landlords over the next 20 years according to the report while owner-occupiers are expected to decrease down to 63 per cent. Of those who will be renting, it’s predicted that 51 per cent will be in the 25 to 55yo range.
What does this mean for investors?
While I’m a big fan of statistics, and the report is interesting, it is important to note that these are predictions. (Who knows what will happen in the future, Covid19 certainly threw everyone for a loop). We’re not expecting a huge change, but, I do expect that the trend will occur over time, the same way it has over the past 50 years. .
We also need to take note of the changing demographics of our society and balance this with your goals as a property investor. The fundamentals in the property market are unlikely to change (invest in quality, location and within budget). We all know that people want to live close to amenities, quality infrastructure and within a close commute to employment. If you can find properties that tick these boxes and your own needs, this will set you up for a quality portfolio.
If you want to discuss your portfolio and the investment opportunities in Melbourne’s West – reach out! We’d love to hear from you.