As credit tightened and access to funds became more difficult, potential homebuyers were unable to make planned purchases.
Melbourne, Australia (PRWEB) November 04, 2013
Across Australia, there are an estimated 2.4 million rental households with 6.0 million residents. The Residential Property Operators industry in Australia plays a crucial role in society by renting out property to over one-quarter of the country’s population. Becoming a home owner has long been part of the Australian dream, but for many, this is more dream than reality. The proportion of Australians renting is growing as housing affordability deteriorates. According to IBISWorld industry analyst Tim Stephen, “since the economic downturn, investors and lenders have been fearful, and in the wake of the crisis, rental demand increased as consumers chose to put off purchasing a home and some home owners sold”. Consequently, industry revenue is estimated to grow at a compound annual rate of 2.5% over the five years through 2013-14. Demand is expected to weaken in 2013-14, with revenue forecast to increase by just 1.4% to reach $36.5 billion.
After a horrid year for the US housing market in 2007-08, many Australians became concerned that the domestic housing market would suffer the same fate. However, demand for rental property boomed as consumers decided to hold off on residential purchases. As credit tightened and access to funds became more difficult, other potential homebuyers were unable to make planned purchases. As the residential property market stabilised in 2010-11, in line with improvements to domestic economic and financial conditions, the rental demand cooled off. “However, consumer sentiment has since turned, with the continuing weak performance of the eastern states compounding fears that the mining boom is coming to an end,” says Stephen. The focus has shifted to Australia's two-speed economy, particularly what might occur if demand for local commodities lessens. Demand for rental property was solid through 2011-12 and 2012-13 as consumers remained uncertain about when or where to purchase. The Residential Property Operators industry has a low level of market share concentration, with no major players commanding a large portion of revenue.
The five years through 2018-19 are expected to bring renewed vitality to Australia's residential property market. With greater consumer confidence and income levels, rental demand will soften. Increased access to finance, the growing population and the relative shortage of residential accommodation are expected to accelerate residential property demand, affecting both renters and those looking to buy.
For more information, visit IBISWorld’s Residential Property Operators in Australia industry report page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
Industry property operators rent or lease residential properties. This includes owner-lessors and those that sublease. The industry excludes activities of owner-occupiers renting or leasing their own dwellings to themselves (imputed rents
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.