Some of Australia’s best rentvesting suburbs have been revealed in new data.
Australians are renting close to a decade on average before buying property, but experts say there are faster pathways to consider in an active homeownership journey.
This included rentvesting – where someone buys an investment property in a growing location while still renting the home they live in.
According to data from money.com.au, Aussies are renting for six years on average before purchasing property.
The longest rental periods were in South Australia, where the average was seven years, followed by NSW and Queensland at 6.5 years.
In light of this time frame, Investorkit CEO and author of Driving the Data Arjun Paliwal said it was no surprise that more Australians are turning to rentvesting.
“Rentvesting allows you to get your foot into the market until you get to the point where you can get the property that you would like,” he said.
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Data from money.com.au revealed the longest rental periods across Australia were in South Australia at seven years followed by NSW and Queensland at 6.5 years. Picture: iStock
Mr Paliwal said rentvesting helps people get into the market sooner, with investment properties also being a more data driven approach that are selected with market insight.
“If that selection has better results than the area you were looking in, not only can you keep in line with the market growth but you can outpace it,” he said.
“This is a big advantage we are seeing for many people who are comfortably getting into their home because they have been able to get into the market over the last three, five, 10 years rather than continuing to save until they can get the home they like.”
According to Mr Paliwal, entry points have been very affordable across markets like regional NSW and Victoria this year.
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Arjun Paliwal
Mr Paliwal said some current affordable entry locations for buyers included Mildura, Aubury Wodonga, Dubbo, Bendigo, Ballarat, as major regional centres with properties in the $550,000 up to $700,000 bracket for freestanding houses.
He added that these locations have been a “game changer” for people looking to rentvest.
Mr Paliwal said these areas have been offering increasing growth rates growing at a minimum around eight per cent over the last 12 months up to about 15 per cent capital growth with Mildura and Wodonga leading the way.
“You are outpacing the national average by about two to four times in some of these markets at affordability entry points for houses,” he said.
“If you go to extremes of outperformance, cities like Townsville, Rockhampton, Bunbury, Geraldton markets have grown tremendously over the last twelve months as well and again offered affordable prices between $550,000 and $700,000.”
Mr Paliwal said in major regional centres there have been a lot of investors that have been actively buying across Australia enabling them to get more growth than the city that they were planning to buy to live in, meaning buyers money is working harder for them for a deposit.
When it comes to capital cities, Mr Paliwal said a lot of money has been flowing back into locations such as Melbourne, parts of Perth and Brisbane.
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According to the data from money.com.au, the longest rental periods were in South Australia at seven years followed by NSW and Queensland at 6.5 years
“These are some examples of cities that have helped people get ahead or are helping people currently get ahead,” he said.
Mr Paliwal said he does not believe in the rental trap, as a “trap” is something you cannot get out of.
“When you are buying and selling a home, you have got to make up costs before you sell to actually not be backwards, but when you are renting you can move if you feel the budget is a bit tight,” he said.
According to Mr Paliwal, this includes moving to suit your financial position and using that to get onto the ladder either via first-home buying incentives with lower deposits, house sharing or rentvesting.
“The trap is a little bit overblown, people can make active choices although all the choices aren’t the easiest,” he said.
“With rent prices that have been rising, sitting back isn’t going to be better for anyone.”
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