More Renters Means What?

This figure was from 2011, and it's still growing!

There is a trend in Melbourne: there are more people renting. This is likely due to the economy and uncertainty. There have been changes in the housing market of late, with sales on the uptake, but over all renting is very popular and looks like it's becoming more so.

Australian Census data (from 2011) shows that although the number of homes being purchased or owned was higher than in 2006, the proportion of the number being owned has dropped from 70% to 67%. Keep in mind that these figures are from last year, and no doubt that trend is continuing. 

Add to this the news that came out of the new Victorian state government report, that predicts that Melbourne will need an extra million houses over the next 30-40 years. This is to accommodate the increase of the population to more than 6 million people.  Combine all that with the knowledge that affordability of purchasing houses is on the decline, and you have a perfect combination for renting.

So what does this trend towards renting coupled with a population explosion mean? It's a fantastic time for property investors to look ahead and capitalise on the trend by investing in real estate.

The Herald Sun had a great article the other day discussion this.  More renters, means more pressure on the rental market, creating low vacancy rates and higher yields. Not only that but with investors jumping in the marketing, first- home buyers want to get in on the action too, creating a buoyant property market. 

If you are an investor and you find the right property in Toorak for example, you are looking at getting a weekly rent of $1200, and the chances of the rent going down, is unlikely as renting near the bay is always in hot demand.

It seems being a property investor is a very smart move in Melbourne! Is it time to look at your portfolio and see if there is room for a few more Melbourne properties?

Let me know what your thoughts are on the renting explosion.