Reality Is That Renting's In Vogue

Newcastle Herald

Monday June 21, 2004

WHAT about a reality TV show called The Renters? Occupants of a block of units could show their guile to get landlords to fix a tap handle in the shower, snuff the doof-doof noise from rowdy students next door, and shift a dumped XF Falcon from right outside the main entrance.

Sponsors would be easily got: any number of home-delivered fast food joints, 24-hour movie rental outlets and same-day carpet-cleaning services for an owner's inspection at short notice.

Of course, the final prize for the winning occupants would be a low-interest rate deal from a home-loan company headed up by some fat bloke who does annoying commercials.

Like all reality shows, there'd be an underlying message. For The Renters it'd be that renting is dead money, so clean up your act, stop wasting your life, start thinking about your future and get into the housing market, even if it does mean moving to an outer suburb you've never heard of to find something affordable. Better than dead money.

Well, it seems that young people are resisting the message, and there might be more involved than the rising cost of housing. In its Social Trends report released last week, the Australian Bureau of Statistics revealed that the proportion of home owners and buyers in the 20-35 years age bracket has diminished over the past 15 years.

Whereas 22per cent of all home owners and buyers were aged less than 35 years in 1981, this fell to 15per cent by 2001. Among those aged in their 20s, more now rent than own.

The figures show that growing numbers of young people are ignoring the argument of their parents to divert a thousand dollars or more of their monthly earnings to buy a modest cottage in the 'burbs. Rather, Social Trends reveals a growing fondness for high-rise living among private renters, especially in well-turned-out blocks of units in inner-city neighbourhoods and beachside suburbs.

It reports that the number of high-rise tenants in Australia rose from 129,000 in 1981 to 334,000 in 2001. And, quashing old stereotypes, high-risers are more likely to have paid jobs and higher incomes than home owners and buyers in an average suburb full of detached houses.

It seems that the economics of high-rise renting can make sense. A typical household in a quality high-rise block of units in the inner city of Sydney, for example, pays about the same in rent as an average first home buyer shells out in loan repayments.

Moreover, an inner-city renter doesn't need a car, meaning an annual saving, according to the NRMA, of about $10,000 in annual transport costs. On top, the high-riser has free access to the resources of the city, or the pleasure of the beach nearby.

Surprisingly, resistance to home ownership among young people seems to have started before the mid-1990s onset of booming house prices.

In Newcastle, for example, the number of rented dwellings soared from about the late 1980s with 33per cent growth between 1991 and 1996, tailing to just 3per cent growth between 1996 and 2001. The same trend shows up for Gosford and Sydney.

Are times changing? My parents were married in 1949, two 22-year-olds embodying the energies and aspirations of their times. Owning a home was central to their dream. Typically, their parents were renters, in a not-too-friendly housing market upended by the Great Depression and war.

To own your own home was to have a stability and certainty absent from ordinary Australian lives for too long. In the immediate post-war period, federal and state Labor governments introduced a raft of measures to make private and public housing accessible and affordable.

By the 1960s, more than 60per cent of Australian families (including the O'Neills) owned or were paying off their homes and home ownership had become the new Australian norm, a remarkable success story and a tribute to the thrift of a generation and to well-designed social policies.

Have times changed once more? Today's incomes are higher and there are attractive new ways to save and invest; and some argue better ways to create wealth than through home ownership. Certainly renting is losing its stigma.

Perhaps too, renting a quality apartment with all the lifestyle advantages that come with an inner-city or beachside location is a desirable alternative to tenure in a mortgage-paying outer-suburb car-dependent commuting belt.

Maybe one day soon The Renters will get a run, perhaps starring Noni and Jamie and Don and Johanna.

Phillip O'Neill is director of the Centre for Urban and Regional Studies at the University of Newcastle.

© 2004 Newcastle Herald

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