Housing Investment and the Private Rental Sector in Australia

Abstract

Over the past two decades, the private rental sector has changed its role within the Australian housing system as it has moved from being a tenure of transition, comprised principally of young households saving to enter home-ownership, to a tenure of long-term occupancy. Rising real house prices, soaring interest rates, changes in the nature of paid work and an increase in the number of household deaths through divorce or separation, has seen an increasing proportion of households either unable to enter home purchase, or unable to maintain their position within this tenure. In addition, access to publicly provided housing has declined. This paper considers the changing environment for private rental housing in Australia and examines the nature of investors and the size of their investment in the housing stock, as well as the impact of their investment strategies on the operation of the housing market.