One of Australia’s leading property analysts, Michael Matusik has recognised share houses or co-living as the way of the future, for both tenants (or residents) and investors.
Rooming houses are the quintessential share housing solution, custom-designed to appeal to the growing shared housing demand.
In March 2020 Matusik reported:
“There is a need to build more rental properties over the next decade than the last ten years. That lift is close to 40%. This demand has also shifted. We will need more rental accommodation to cater for young renters, people in their mid-30 and mid-50s and also for those in the last stage of life. The young want to live near the action but will share accommodation. The demand for communal rental housing solutions is already on the rise and this need is expected to grow. More build-to-rent product is on its way.”
Matusik demonstrates the total size of the Australian rental market by segmentation. The biggest segment over the next decade is 15–24 years range age, while the biggest change is 25-34 years age range at almost 300%. (The average age for Rooming House renters is mid-30s.)
Direct link at Michael Matusik’s blog under Future Rental Demand.
On 25 February 2021, Michael updated his assessment:
So, if was going to have a stab at it – with my hand on my heart – I would say that landlords face a safer future if they hold dwellings that can hold multiple tenants. Tenants, for mine, will be forced to share. They will gravitate to those digs that best accommodate this type of occupancy. This has been my thesis for some time and a deep dive into the rental data when preparing this post hasn’t changed my mind. In fact, it has reinforced it. Upon reflection, I must admit my end note is said with some confidence.
Direct link: Rental Trends.
Rooming Houses are occupied by middle-to-lower income workers. Over the next decade, this segment will represent 85% of jobs by income levels.
Matusik also shows the change in property investor trends.
The next decade for investors will be very different from previous decades where the old buy-and-hold for capital growth will be outpaced by investors who choose cash flow positive property investments over negative geared properties to accelerate their property portfolio growth.
Smart investors will look to residential property where there are more paying occupants per title. Or as Matusik says, “More occupants per title is the new black.”
Capital growth will be more limited than previous decades with more ‘manufactured equity’ in property becoming the preferred property investment model.
Investments decisions will driven by positive rental yields.
More people will be living together in select urban locales.
Properties will need to have the right rental market appeal to attract the right demographic of renters
Rooming Houses tick all Matusik’s boxes.
If you’re interested in fast-tracking your property investments, reach out to us and we’ll work with you on a strategy to fit your circumstances.