Rental market activity shifts towards Generation Y

23.8.13Potential investors in Sydney could be interested to hear that that the fastest growing household type in the rental market is Generation Y, according to the latest release from the Australian Property Investor magazine.

Following on from SQM Research’s look into the Top 100 Rental Demand Hotspots, 30 per cent of all homes are now occupied by career-driven Generation Y couples with no children.

This is set to overtake the current most common household, which is made up of the traditional nuclear family and occupies 33 per cent of the market.

Founder of SQM Research Louis Christopher said that this change is due to the decision by Gen Y to put off having children for longer compared to the older generations, giving them more opportunity to rent.

“Young Australians are putting off buying a home in favour of renting and the flexibility it offers them. That’s very much unlike their parents and grandparents,” said Mr Christopher in a September 23 release.

While housing affordability is increasing, the difficulty of buying a first home coupled with the freedom of renting is contributing to Gen Y’s growing representation in the rental market.

“While younger Australians are happy to rent, they’re not keen to put down roots and will on average move to a new rental property every 18 months or so,” said Mr Christopher.

Furthermore, a significant number of overseas migrants make up the rental market as well, with 60 per cent of the nation’s annual population growth coming from migration.

“Net migration was around 400,000 people in the past 12 months – that’s two Darwins each year. When new arrivals settle, they tend to gravitate towards middle and outer suburbs in capital cities, close to sought-after amenities and services, and they’ll almost certainly rent,” said Mr Christopher.

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