Landlords are not the evil beasts we think they are!
There is an extreme misconception within Australia that Landlords are greedy evil money hungry people.
Are landlords really the ‘evil beasts’ that some people believe them to be? In this blog we will break down some statistics that put things into perspective. We’ll also discuss a couple of important factors that should be focused on within Australia to improve the current rental crisis.
Property Investors / Landlords
Only 8% of the Australian population are landlords. Now, let’s take a look at some statistics on these landlords within Australia.
Below is a breakdown on the percentage of landlords and how many properties they own according to the Australian Taxation Office. Of the 8% of the Australian population who are landlords:
- 71.5% of investors hold one investment property
- 18.0% of investors hold two investment properties
- 9.7% of investors hold 3,4 or 5 investment properties
- 0.8% of investors hold 6 or more properties
This data showcases that most Australian landlords hold just one investment property. Less than 30% of investors hold two or more investment properties. This indicates that that majority of landlords in Australia are everyday Australian’s and are the mum and dad investors.
This is fundamentally one of the reasons why there is a rental crisis right now. We don’t have enough individuals supplying investment properties.
If we want to have more properties available for rent, we need to increase this 8% of the Australian population who are investment property owners.
We also need to educate more investors around making sound investment property decisions. This will mean that more investors get investing right and purchase more investment properties. This will add more supply to the property market, and increasing the number of investors that own more than one investment property.
Here at Taylored Property Wealth, we are passionate about helping and educating as many Australians as possible to increase this 8% of the population who are landlords. This will help renters/tenants and will help create more abundant futures for those investors.
Public Housing
Let’s break down the statistics on the percentage of dwellings that the Government provides to Australians.
The 2021 census identified that there were 348,018 social housing dwellings or 3.80% of the Australian property market, making Australia one of the countries with the lowest percentage of social housing. Many European countries have social housing well above 10% of their property market, for example, Netherlands at 29.1%, Austria, Northern Ireland and Scotland at 24% and Denmark at 21%.
Source: Ahuri
This is why we have a massive rental crisis occurring. We fundamentally have a massive supply issue. This is why we have historically low vacancy rates and it’s not going to improve anytime soon with what the future looks like.
As an investor or an aspiring investor, this should get you excited. Separating yourself from the pack and being courageous enough to be the minority will 100% pay massive dividends to you in the future!
Why do I say that the rental crisis is not going to improve? There are two factors:
Factor 1 – International migration to Australia
It is projected that 650,000 to 700,000 people will move to Australia in the next two years and they all need somewhere to live.
This is going to see a massive increase in demand, creating continued pressure. This will put pressure on rental properties that already have massive amounts of pressure due to the low supply.
Factor 2 – Low levels of construction
Due to the massive challenges in the construction space over the last few years there is less construction occurring. Builders and Developers have gone bankrupt. (massive risk if you’re looking to buy brand new). Or Builders and Developers have delayed construction as their margins are not viable due to inflation and material shortages.
As per the ABS, building activity and the number of dwellings commenced is reducing. Total dwelling commencements fell 6.7% to 41,374 dwellings. New private sector house commencements fell 2.3% to 28,330 dwellings. New private sector other residential commencements fell 16.5% to 12,053 dwellings.
Summary
In summary, we must really start to focus on encouraging landlords. Landlords create a small percentage of the population offering the supply that we desperately need, and the Government are offering an even smaller amount of supply.
We need to truly understand the fundamental issues going on and actively looking to improve these. We need to be more open minded as a country and understand that landlords are not ‘evil beasts’. Rather, we need to start looking at landlords as Knights in shining amor as they are helping to provide housing supply, making a positive impact on the current rental crisis.
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