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Landlords play a ‘fundamental role’ in the property life cycle

By Tim Neary
13 December 2018 | 9 minute read
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Landlords are sometimes blamed for pushing up property prices and damaging the Great Aussie Dream, but one property investor has said that this is an inaccurate assertion.

Ripehouse Advisory said that landlords provide two critical components to a healthy property market: accommodation and a stepping stone to ownership.

CEO Jacob Field said that landlords play a fundamental role in the property life cycle.

“Whether they are studying at [a] university or undertaking an apprenticeship, for most Australians their first move away from the family home is into a rental,” Mr Field said.

“Rentals also provide a necessary safety net for residents going through financial difficulties following a marriage breakdown, job loss or business failure.”

Mr Field said that when residents move to a new location for work, they generally want to rent before they buy.

“For residents moving into a new area, it might be from another location or another state, it is a dramatic life change.

“For the first six to 12 months, generally, people will prefer to dip their toes in the water first and see if they enjoy the new job.”

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Mr Field debunks the claim that landlords are responsible for the so-called affordability crisis in this country.

“Prices go up in owner-occupied concentrated areas at the same rate, if not in greater incriminates than in tenant-concentrated areas.

“For example, typically the highest capital growth areas over the long term are capital city locations and established blue-chip suburbs where owner-occupiers rule the roost,” Mr Field said.

He also refutes the “misconception” that property investors prevent renters from home ownership, suggesting instead that owner-occupiers place greater upward pressure on property values than landlords.

“The only reason landlords exist is because they provide a necessary utility, making home ownership in the first place a possibility for many Australians,” Mr Field said.

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