What are the options for young people in a property market that is becoming increasingly more expensive?
For many young Australians looking to move out, there is possibly nothing more perplexing than deciding whether
to rent or buy. According to the Australian Bureau of Statistics, property prices in Sydney and Melbourne have risen 10 per cent in the past 12 months, leaving many with no choice but to rent. But as property prices rise, so do rental prices. So what are the options for young people looking to rent?
The average property price in Sydney’s North Shore stands at $1 million, with a deposit ranging from 10 to 20 per cent. Whereas the average weekly price to rent in Sydney’s North Shore currently stands at $450-$700 per week.
“Because of these prices, many young people can’t afford either. Migrating has been a popular option amongst young Australians as more and more are leaving the cities,” says Reanna Palmer of Your Real Estate in Roseville.
Palmer suggests that putting your savings towards buying a home is a better investment opportunity than renting.
Landlords are often able to set their own rental prices, leaving no security in the amount payable per week. Palmer
also says that at the end of the day, the house never belongs to the tenant, and the tenant ultimately ends up losing
more money than gaining.
Omar Khan, a future homeowner, dismisses the idea of renting. “Renting is throwing money away. You are essentially paying off someone else’s home for them. Buying results in an appreciating asset,” Khan says.
If buying is still commonly seen as a better option, why are many young people still choosing to rent?
Tash Nguyen of LJ Hooker in Roseville suggests that renting is seen as a more favorable option amongst young people because of the freedom, low financial risk of keeping the property maintained and the flexibility of frequently moving locations.
“Young Aussies are renting because of the prices, as well as being able to live with trustworthy friends and partners,” Nguyen says.
“It is easy to get accepted for nice properties, and I am never tied down to one place, we have the freedom to move around,” says Tara Berkery, a tenant in Sydney’s North West.
It would seem that many young Australians are now embracing rental life as an option. Many are now choosing to avoid the stress of a mortgage, leaving their options open for greater personal flexibility.