Think you know who the average Aussie landlord is? You might be surprised...
Originally published by realestate.com.au as 'Unfair criticism': The truth about the average Australian landlord by Emily Hutchinson, Rent Specialist and Property Journalist.
A tenant can live in a rental for years without ever coming into contact with their landlord, but they probably have a clear view in their mind of who the owner of their home is.
However, there's a wide array of landlords in Australia – and the most common type probably doesn't fit the stereotype.
Kasey McDonald is head of operations at property management firm :Different and said renters tend to believe their landlord is a high-income earner with lots of cash to burn.
"But this isn't always the case," Ms McDonald said.
"I definitely think there are some misconceptions about who the typical Aussie landlord is. Many property investors actually sit in the average earning brackets of approximately $80,000 per annum, per person, and $160,000 per annum if a combined income household."
Ms McDonald said property investors can come from all walks of life, backgrounds, professions and income brackets.
"They’re often just everyday Aussies who view property investment as a way to diversify their income streams and save for the future," she said.
Not many Aussies are landlords
In Australia, landlords account for a relatively small portion of the property market.
The Australian Bureau of Statistics' Survey of Income and Housing reported that four-in-five households don't invest in property at all. Instead, the overwhelming majority of people are either renters who don’t own any property, or are owner-occupiers who own their home, but no other dwellings.
In addition, the ABS data showed that only one-fifth of mortgaged owner-occupier households also own a rent-earning investment property.
Another 6% own a second home that they don't rent out, while just 7.5% of renter households own residential property that earns rental income, otherwise known as rent-vestors.
The typical Aussie landlord tends to be older, with seven-in-10 households that own an investment property aged between 35 and 64.
"The majority of our [landlord] customers are investors with one property (54%), with about a third having two or more properties, and some larger scale investors having four or more," Ms McDonald said.As a renter himself, he said he aims to be a responsible landlord and is keen to make his tenants feel at home in his property."I feel quite lucky to get to this point in my life... my whole journey up until this point in time has been renting," he said."I think that making the rental comfortable for tenants adds value to the property and it's tax deductible. For example, the upstairs part of the townhouse didn't have an air-conditioner, but I thought, it's going to get too hot in here, so I added one in."It means I'm going to have a happy renter who wants to stay in there for a longer period of time.""Whenever there's a repair that needs to be done, the property managers are authorised just to get it done. There's no point in having a tenant having issues that are going to cause further maintenance later down the track."Landlords essential to rental market
Without investors, there would be far fewer properties for tenants to rent, which is an issue currently being experienced across the country as stock dwindles and prices rise.
“The rental market is under the microscope at the moment, with the extreme shortage of rental accommodation of real concern," said Tim McKibbin, chief executive officer of the Real Estate Institute of New South Wales.
“Upward pressure on rents is an obvious outcome of the lack of rental supply and the reality is that this situation is here to stay, until actual supply side solutions are implemented and begin to take effect.
“Landlords are bearing the brunt of criticism but are necessarily part of the solution.
“It’s too simplistic to point to high rents as the sole motivation to invest in property when there are other demands on landlords which make the proposition less attractive."
Mr McKibbin said this point is clear when considering how many landlords have exited the rental market in recent times.
Investors are slowly coming back, but not at a pace that can keep up with demand.
In June 2022, the total value of lending to investors was $10.5 billion, which was 6.3% lower month-on-month and 10% down on its historic peak.
While the value of lending to investors is high, their share of new lending in June 2022 was 33.8%, which is well below the historic peak of 45% seen in April 2015.
"Rental markets are tight around the country, and rents are growing quickly," PropTrack economist Angus Moore said."That will start to bring more rental stock into the market and ease how competitive conditions are. But it will take some time."
