Average tenant becoming more likely to be older and have families

Zoe FieldingFebruary 25, 20150 min read

The profile of private rental tenants in Australia has changed dramatically over the past 30 years, with an increasing number of families with children and older people renting for the long-term, an academic study has found.

The research by the Australian Housing and Urban Research Institute (AHURI) at Swinburne University of Technology is being used to inform government policy, but private landlords may find it useful when deciding what type of property to buy or how to renovate.

The absolute number of households in the private rental market doubled to 1.8 million over the past 30 years with the biggest growth in Queensland and the ACT, according to a bulletin based on the research released in February.

Families with children represented more than 40% of renting households in 2011, a much higher proportion than in earlier decades, the bulletin noted.

The number of group households has also risen, with more than one in 10 private properties being rented by unrelated housemates in 2011, up from just over one in 25 in 1981.

Traditionally, single tenants and young families made up the largest proportion of renters. But rentals to lone person households fell to one quarter in 2011 from just over 40% in 1981.

Renting households are also getting older. More than half of renters were over 35 years of age in 2011 compared with around 40% in 1981, the bulletin reported.

“While the age profile of households in private rental housing remains young relative to all households, the median age of household heads is growing more rapidly than for households in general. This is likely to lead to the private rental sector being home to larger proportions of elderly households in the future,” the bulletin noted.

For investors, the findings suggest properties that would suit families with children, or appeal to older people will be the ones most in demand, perhaps increasingly so in future.

But be careful not to limit the range of potential tenants that a rental property will appeal to.

A location near to shops, schools and transport, as well as cafes and restaurants will be attractive to a broad range of tenants.

Features such as a second bathroom, parking or a lock-up garage, an internal laundry and a good-quality, functional kitchen will also have wide appeal.

Apartments v houses

High density housing and apartments are popular investment choice for many landlords as they tend to be cost less and offer higher yield, and maintenance is often managed by a strata company, which makes them less work for owners.

However, the AHURI research shows the proportion of private renters in apartments and high density dwellings fell to 44.8% in 2011 from 48.9% in 1981. That is in spite of a 400% increase in the number of private rentals that were apartments and a 79% increase in rental properties that were in high density housing.

By number, 80% of all growth in private rental housing has been in detached and semi-detached properties mostly in the suburbs, the research bulletin noted.

The advantages for investors in buying a house rather than a unit are that the additional land offers an opportunity for capital growth, while there’s a better chance of attracting some tenant types, such as families to rent a freestanding home with extra space for children.

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.
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