Why are Young Australians Looking to Rent and Not Buy?

To buy or not to buy, that is the question.

Choosing between purchasing a house or renting, is one of the biggest decisions young Australians face. With homeownership at its lowest rate since 1994, it’s clear that many Australians are choosing to rent, but why?

Renters now make up to 32% of Australian households, with the majority aged between 15 to 24 years old.

Owning a home isn’t for everyone. For some, homeownership is an unattainable dream for financial reasons. For others, the financial freedom and flexibility of renting is far more attractive than the long-term commitment of a mortgage.

Read on to discover why young Australians are opting to rent, instead of buying their own homes.

Discover a new way of living at Lateral. Register your interest today.

It’s more affordable

According to a recent Australia Talks national survey, 65% of Australians think owning a home isn’t an option for most young Australians anymore. So how did this happen?

The property market in Australia is booming. Home loans, house prices and auction prices have never been higher. The National Housing Finance and Investment Corporation has claimed that Sydney and Hobart are the least affordable for potential first home buyers. This has left many young Australians unable to afford their own home.

Renting, on the other hand, offers a more cost-effective way of living. Typically, the only upfront cost is a six-week bond, which is returned at the end of your lease. There’s also the benefit of not paying for maintenance and repairs which are covered by the landlord.

It’s closer to work

If you want to own a home, in Sydney, close to work, you’ll need to be a millionaire. House prices in major cities, like Sydney and Melbourne, are simply beyond the budget of many city workers. This leaves young Australians with two options – spend precious hours travelling to work every week, or rent in a location closer to their job. Renting allows people to live in an area they normally couldn’t afford, without the weight of a mortgage.

And depending on the location, the rent can be more cost-effective than mortgage repayments – meaning that the tenant not only has a shorter commute to work every day, but they save money too.

Access to amenities

Being a tenant rather than a homeowner can give young Australians access to amenities that they otherwise would not be able to afford.

Luxuries such as an in-group pool, 24-hour gym, or even a theatre room often come standard at many midscale to upscale apartment complexes – all with no additional charge to the tenants.

At Lateral, we offer high-end, luxury rental apartments complete with:
Outdoor pools
Pizza ovens
Fitness gym and saunas
Alfresco dining areas
BBQ facilities

Our intimate understanding of Australian living ensures a home that can coexist seamlessly with the urban and city life that surrounds it. Enquire here with our leasing team to find your dream rental home.

It diversifies investments

For many first time buyers, purchasing a house results in all their savings going towards one asset. For young money-savvy Australians, this can be a big risk.

Diversifying all investments ensures that the investor isn’t putting all their eggs in one basket and creating unwanted risk to their capital. That way, if one investment performs badly, the investor won’t lose all their money. In fact, having a variety of investments with different risks will balance out the overall gamble of any portfolio.

Renting allows young Australians to use their savings across a broad range of investments. And by diversifying their investments, renters set themselves up for a more secure financial future.

There’s more freedom

Travel is an important part of young Australians’ lives. According to Deloitte Access Economics, 52% of Australians aged between 20 and 29 went overseas in 2019. Unfortunately, due to COVID-19, travel has been almost impossible for young Australians. However, experts predict a travelling boom once international travel restrictions are lifted.

With so many young Australians planning to travel eventually, owning a home isn’t feasible. Renting gives tenants a sense of freedom to live the lives they want to, as leases are usually only 6 to 12 months long.

Renting isn’t only ideal for people who want to travel – many young Australians frequently move with their jobs or haven’t decided where they want to settle down. Renters are free to try out different suburbs and areas and see which ones they like best, without the hassle of buying and selling a house every time.

With over 20 years of development experience, it is our priority that Lateral lives up to the reputation and commitment you expect, continuously delivering quality buildings beyond the industry standard. Enquire here with our leasing team today.