All around Australia there are differing faces that define the typical renter. So, let's dig into some data and see the things that define the average Aussie renter.
Have you considered renting or are you an experienced renter? Or are you thinking of buying an investment property and renting it out? Discover what the face of the average Australian renter is and what you can learn when it comes to the rental market.
Aussies Are Renting For Longer
As Australians, we are no strangers to the ebbs and flows of the property market. And it seems that the recent ebb in the buyers vs renters debate, whether by choice or circumstance, favours renting. In fact, people with middle to higher incomes are actually renting for longer.
So, let’s unpack who the average Aussie renter is and learn what drives them.
Why Do Renters Rent?
Housing affordability ranks high on the list of reasons, with a finder.com.au survey revealing that 47% of their sample would consider renting for life if house prices continue to rise. The attractive inner-city suburbs that support an urban, vibrant lifestyle become more obtainable through renting, which is in fact where the majority Sydney and Melbourne renters reside.
The concept of 'rentvesting' is also a strong motivator. The idea is that instead of buying your dream property straight away (which is typically an unreachable goal for most first-home buyers, especially in Sydney), you can buy a less expensive house or apartment and rent it out, while renting somewhere yourself. Upon the sale of your investment property at a higher value, you could then use the capital gains to go towards your dream property. Who knows, you may be more like the average property investor than you think.
Also according to Finder.com.au, there’s a significant percentage of renters, especially in NSW, who are saving for a home loan deposit and are renting in the interim before purchasing a property.
Where Do They Live?
In reviewing the data, there’s no denying that there’s a significant correlation between the creative, young professionals and students and the rental properties that give access to the coveted, colourful inner-city suburbs around the country.
Examining the latest census data alongside the findings from the realestate.com.au and Pedestrian TV survey show that their average renter, which falls in the “independent youth” demographic, reside in the established inner-city suburbs of Sydney and Melbourne.
Looking at the Eastern Suburbs, the 2016 Census data on the independent youth demographic found that Darlington, Chippendale, Kingsford and Camperdown were popular NSW suburbs to reside in. We’ve also seen that Sydney’s Eastern Suburbs are particularly popular with the young professional crowd.
When looking from state-to-state, the 2018 survey conducted by rent.com.au also found that New South Wales has the highest portion of renters coming in at 30.8%, with Queensland and Victoria following closely behind.
How Old Are They?
Despite the fact that 'rental stress', or when 30% of your income or more goes towards rent, is a real issue for around 30-40% of young Australian renters, the proportion of Aussies renting is steadily growing, coming in at 30.9% of the population in 2016.
This is particularly an issue for young Australians, with the age of the average renter according to the surveys conducted by realestate.com.au and Pedestrian TV and rent.com.au found to be between 25-29 and 34 years old respectively. Both surveys also found the average renter to be a woman.
Digging into the rent.com.au survey further, we can see that from state-to-state Tasmania has the lowest median age coming in at 32 and Queensland has the highest median age coming in at 35 years old. And majority of these young renters aren’t living alone - they typically share with 2-4 people.
What Do They Earn?
Numbers vary state to state, but rent.com.au found that the average renter earned $66,000 per year. The Northern Territory scored highest with the average income coming in at $72,000 per year, and Tasmania coming in last with $45,000 per year.
The 25-29 year old average renter was found to be on a slightly lower yearly income, averaging at $50,000 per year, with the average household income being $98,000 per year.
Alarmingly, the Australian Housing Income Gap Report found that the average Sydneysider on the average wage wanting to rent in a 3 bedroom home in an inner city suburb must earn an extra $1,503 per week ($78,139 a year) which equates to an annual wage of $172,467 if they want to avoid rental stress. It’s situations like this that can really show the value of partnering with experts in the rental market.
How Much Do They Pay In Rent?
Based on a survey of over 2,500 Australians, as of April 2019 the average renter of a 1 bedroom apartment in the inner city was $421 per week, with a 3 bedroom apartment jumping to $670 per week. When looking at Sydneysiders alone, as of April 2019 they paid the highest average rent at $582 per week.
In a positive turn for renters, the last half of 2018 and start of 2019 has seen falls in rental prices and increased occupancy rates. Looking at Sydney in particular, the weekly median rental price has dropped to $507.90 for units and to $705.10 for houses (week ending 4 April 2019).
What Can You Learn?
Even though we’ve focused on the profile of the average renter, there are certain special circumstances, like looking at rentals that accommodate pets, where it helps to have years of expertise on your side.
Learning about your rights as a renter and what questions you should be thinking about when looking to rent is also crucial to getting the most for your money.
Are You Looking To Step Into The Rental Market?
Or perhaps you need an experienced property manager to help manage your rental property? Check out our current listings here or contact our team of specialists today to start your renting or property management journey.