Anecdotal evidence suggests Australia’s weakening economy is changing the way young people approach renting.
The Reserve Bank of Australia confirmed earlier this month that economic growth is below par and domestic demand is weak.
CoreLogic RP Data head of research Tim Lawless told Residential Property Manager the economy seems to be changing the way young people approach the rental market.
“This is probably already happening, with rental affordability and household costs potentially causing more young prospective renters to delay their move away from home,” Mr Lawless said.
He said another likely trend was for young renters to fill their properties with more tenants.
“[They are] ensuring maximum occupation of their rental dwellings to minimise costs.”
Domain Group senior economist Andrew Wilson said the rise in house prices was causing younger Australians to delay their move out of the family home.
“Certainly vacancy rates are still pretty low for houses, but that might be demand more from those that are a little bit further along the property ladder,” Dr Wilson told Residential Property Manager.
He said first-home renters bear the brunt of worsening economic activity.
“They tend to be early-stage employees and don’t have capital behind them. Of course, rising unemployment usually affects entry-level employment and those with fewer skills.
“It is a reasonable assumption that given we have seen the budget market underperforming generally in most capital cities, it would also equate to those in lower income groups not renting in their early stages and staying at home with mum and dad.”