'I've got restless feet': The Australians with no desire to own their own home

It’s time to change the narrative about renting versus buying, says Jo Masters.

The chief economist for EY Oceania is co-author of a 2019 paper titled  Is renting really dead money?,  which examined why people sometimes compromise on quality of life to buy a home.

“Many families choose to put themselves under risk of financial stress, others choose to move out of Sydney just to hit this ‘milestone’,” she reported.

Yet via economic modelling, the paper’s authors discovered renters with a very clear savings and investment plan could use leverage to create the same, and sometimes greater, wealth as their home-owning contemporaries.

And instead of being forced to live where they could afford the mortgage, renters often enjoy a veritable smorgasbord of location choice.

Of course there are life-long renters who already know this to be the case.

John McAllister is 63 and has been a renter his entire life. He emigrated from the UK to Sydney 30 years ago and has lived in homes across NSW, Queensland and Western Australia, by the beach, in small towns and in big cities.

He is representative of the one in 10 Australians who actively choose to rent, according to a recent survey by comparison website Finder.

Ten per cent of those surveyed expressed “no interest in owning a home anytime soon”, suggesting it’s now becoming more acceptable to be a long-term renter.

“My whole family are renters, so it’s normal for me,” McAllister says. “I’ve got restless feet, I like to move around a lot and as a nurse it was good for my career.”

McAllister says he has thoroughly enjoyed his itinerant lifestyle and the flexibility it gave him, which provided exposure to all manner of people and property.

On the downside, the rentals he lived in were never truly home.

“It’s often difficult to have pets, you’ve got no choice in the decor, you can’t do something as simple as put picture hooks up without permission.”

McAllister says his desire to be a “good tenant” meant he would put up with small problems and there were two occasions when he had to move unexpectedly after his landlords had a change in circumstance.

Until now, short-term leases of six to 12 months have been the rule rather than the exception, a common sticking point with tenants.

“In countries such as Germany, lease agreements are typically five to 10 years, as opposed to the 12-month lease typical in Australia,” Masters says.

The relative lack of tenant rights is an important factor that pushes people to buy rather than rent, says Masters, and she noted the need for reform to create greater stability in tenancies.

She agreed the establishment of a “build to rent” category in Australia – where properties are built to be rented, rather than sold – was a step in the right direction.

McAllister will be among the first residents to move into LIV Indigo in Sydney Olympic Park next month. Built entirely for renters, with secure leases available, the apartments are pet-friendly, can be personalised, and offer communal spaces and services.

Designed for sustainability and energy-efficiency, LIV Indigo is the first community to be built by Mirvac under its new LIV brand, which aims to provide the “flexibility of renting with the certainty of ownership”.

While renters often face the unknown at the end of their lease, renters at LIV will be given the option to renew their lease at the end of each 12-month term.

Masters says the more rental choices available – particularly for younger Australians – the better.

“The length of tenure is a really important one, but it’s also around tenancy rights. In other countries tenants are able to paint walls or put pictures up, or in some cases do some minor refurbishment or renovation, which makes it feel more like a home. Having pets is another one, particularly with older Australians living alone.”

McAllister is looking forward to settling down, joking that having reached his 60s, his feet have calmed down.

“[LIV Indigo offers me] long-term security and because of that, for the first time ever, that property will feel like home, he says.

“I can choose the decor, I’ve got a huge balcony with great views and as part of my retirement plan I would love to have a dog, so [LIV Indigo] makes that simple. There’s a lovely communal space with barbecues if I want to entertain and a big plus for me is having maintenance on site so I won’t have to wait to get something fixed.”