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 In Lifestyle Property Management

Is Renting the new Owning?

It’s the prevailing Australian dream to become a proud homeowner, however recent shifts in the market and consumer perceptions are indicating this ideal is becoming seemingly unrealistic and unachievable for many…

It’s the prevailing Australian dream to become a proud homeowner, however recent shifts in the market and consumer perceptions are indicating this ideal is becoming seemingly unrealistic and unachievable for many.

Currently just over 30 per cent of Australians are renting, and while that is comparably lower than the 65 per cent of Australians who own their home, the last two decades have shown a trend of steadily increasing renters corresponding with a decrease in owners.

Recent moves by the Victorian Government to secure more rights for tenants is positioning renting as a much more agreeable prospect. If passed, the proposed legislation reforms could include positives such as easier pet ownership for tenants, increased rental security and long term leases.

A defining advantage of renting, particularly in Australia’s competitive property market, is entry to a suburb in which it would be unattainable to purchase in. Tenants can also enjoy their preferred lifestyle with reduced ongoing costs, being locked into a mortgage and managing ongoing repairs.

Renting a home does not exclude an individual from the property market; many tenants choose to live in an area they desire but buy an investment property in a cheaper location. Advantages of owning a tenanted investment property include assistance servicing a mortgage and the current opportunity to potentially claim tax deductions.

“Currently just over 30 per cent of Australians are renting, and while that is comparably lower than the 65 per cent of Australians who own their home, the last two decades have shown a trend of steadily increasing renters corresponding with a decrease in owners.”

A tenant also has the flexibility to consider alternative investment options. Multiple economic organisations have investigated the returns of owning in comparison to investing. The University of Melbourne found in most cases the financial return of property ownership slightly exceeded the return available to renters who invest in alternative asset classes such as shares and term deposits. A similar study by the Reserve Bank of Australia found that financially the renting and home ownership decision is an even call.

Owning still appears to be the most common, lucrative and sought after living arrangement. However, the rental landscape is closing the gap and presenting a highly desirable option in its own right.

If you need any further assistance or have any questions, please contact our Marshall White Property Management Team (03) 9822 8711.

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