Access to beaches, cafes and good public transport are top of the list for Australian renters, new data reveals.
Australia’s most in-demand rental suburbs all have one thing in common – a lifestyle that revolves around a strong social scene.
Data from realestate.com.au/rent from November until the end of April reveals inner-city and beachside suburbs are in hot demand across the country.
Price isn’t the driving force for many renters with the data showing the most in-demand areas having a median weekly rental price of between $490 – $670 a week.
There have been 60 million visits to realestate.com.au/rent in the past six months with more than 20% of people coming to the site looking to rent.
The data defined in-demand areas as suburbs which had 10 rental listings for the selected category (i.e house) per month. For the most accessible rental markets, areas that met those requirements also had to be located within 25 km of a capital city and have lower demand.
How does your area compare?
Looking for a better rental deal or just curious to see how your area rates? The searchable interactive below shows if an area is a high-demand suburb with renters for both houses and units.
*Suburb rank = Demand compared to all other areas in the state.
It also compares results for surrounding suburbs, offering a look at how areas nearby fare when it comes to rent demand.
The data in this tool also compares the results from the same time period (November- April) last year. Areas that failed to meet the data requirements will return a ‘not enough data’ message.
Renters seeking a certain lifestyle
The lifestyle that in-demand areas offer is something most can only afford as renters, says REA Group Chief Economist Nerida Conisbee.
“If you look at who rents — and the ABS says more than half of all renters are aged between 20-34 — these are locations they want to live in but can’t necessarily afford (to buy),” she says.
“The suburbs that they (renters) want to live in are generally quite expensive although not impossible to enter into.”
Renters are far more driven by shops, cafes and other amenities areas offer, says social researcher Mark McCindle from McCrindle Research.
“In this era we keep hearing so much about price and affordability and access to work and the like, but this data is really showing that lifestyle (for renters) is what’s driving the choice,” he says.
“When it comes to housing, we want to enjoy where we live and not just use it as a place to sleep, so we can have good access to work or study.”
Renting in areas on the Gold Coast, while competitive, does offer a lot in terms of lifestyle at a lower price point, Conisbee says.
“On the Gold Coast, there has been a lot of development … there’s a lot of supply in that market, that may be a bit of a factor. It’s certainly a very affordable market. If you have a look at what you can get in those (Gold Coast) suburbs compared to other locations, it is very affordable.”
With up to a third of the rental market made up of people who rent by choice — whether they be downsizers or those who are rentvesting — renting is less of a life stage before buying and more of a lifestyle choice for some.
“It shows that renters now span all of the demographics and socio-economics. People aren’t just renting because they have to, we’ve got a lot of choice renters in the mix. So just because something’s affordable doesn’t mean it’ll be in demand,” McCrindle says.
Video: Best and worst areas for rentals
For investors, the data shows that those properties close to the CBD in the bigger cities still offer good returns, despite the high cost.
“Inner-city Melbourne and inner-city Sydney, if you are looking to invest, tend to always get high demand for people wanting to live (and rent) in those apartments and houses,” Conisbee says.
Most accessible rental markets near the CBD
In good news for renters there are still some suburbs within 25km of the city that are readily accessible, with a lower amount of demand.
While lifestyle and choice define the most in-demand areas, other factors are influencing the most accessible rental markets, says Conisbee.
“WA really stood out, nine of the top ten (most accessible rental markets) were located in Western Australia.
“Western Australia has seen quite a bit of development, the economy isn’t going so well and population growth has really slowed. I think that market is one that would be really challenged, primarily because of economic reasons.”
The social cache of certain areas, particularly those currently on the most accessible list, will change.
“I think Barangaroo will change, that’s a new urban area. I think at the moment it looks not so competitive, but I think that will change as the area becomes better known and more popular,” Consibee says.
McCrindle also argues that how renters perceive urban areas does shift over time.
“It shows that a suburb has a brand, now the brands change over time.Fitzroy, a generation ago in Melbourne, was certainly not the most desirable,” he says.
Areas that are less in demand also reflect the supply of rental properties.
“What’s interesting is some of the areas have the potential to turn around … some of these areas that are low on the list are low there at the moment just because of a current oversupply. So as that is absorbed, you’ll you find areas like Rhodes will get back on the list of competitive places,” McCrindle says.
Date: 14 May 2016
Author: Danielle Cahill