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Published 28 June 2012 04:11, Updated 28 June 2012 05:01
Social life: For young professionals, a room in a share house can make urban life feel less isolated Sylvia Liber
If you own a big family home and you’re looking for a secure, long-term rental income, Dominik Waldmeier has an exciting proposition for you. Turn it into a share house.
No really, we’re serious. He’s the business development manager of Brisbane-based The Pad Property Group. This company renovates and manages big family homes to attract growing numbers of cashed-up young professionals who want a trouble-free bolthole close to the city.
“The pitch we make to landlords is they’re going from one income to five and instead of earning $700 a week on one rental, you might get $900 or $1000,” Waldmeier says. It means more money and a more secure income flow.
The term “share house” is not a favourable one for most landlords, who immediately imagine noisy parties and slovenly tenants who struggle to pay their rent. But Waldmeier’s tenants don’t fit the stereotype.
They’re young professionals, sometimes on mining or medical contracts, sometimes brought in for construction, who want the freedom to move without the hassle of home ownership. About half are from overseas.
“They have high disposable incomes but they are not looking to buy established homes and furnishings, or set up electricity contracts,” etc, he says.
A combination of economic shifts such as the resources boom and changing social preferences is creating a new class of wealthy renters who are under-catered for in the current housing market. They have finished studying, landed a good job and moved out of home. Several decades ago they would have been thinking marriage and children at that stage but today, setting up a household is the last thing on their minds.
Instead, they’re partying, or saving, or skilling up, or striving for a plum overseas post. Landlords and developers, faced with a fairly unexciting housing market, are cottoning on.
The Pad has 900 Brisbane homes under management since setting up five years ago. Many landlords have done capital projects to target transitional workers: installing locks on the doors, fast internet, built-in wardrobes, air-conditioning and ensuite bathrooms. Some rooms go for $350 a week.
The cashed-up youngsters renting these spots are placing enormous pressure on some segments of the rental market, typically small attractive units and terraces close to the business and education centres of major cities.
In Sydney’s CBD-fringe suburbs such as Potts Point, Darlinghurst and Paddington, young workers and rich international students are creating intense demand for rental homes, real- estate agent Vicky Laing says.
“I can tell you there’s someone at the Connaught [a residential apartment building] in Liverpool Street paying about $350 for a lounge room,” Laing says. “There is this new group of young people that have to be close to the city.
“They’re not like their parents. They seem to think … there is going to be something there for them when mum and dad have gone,” Laing says. “I ask, ‘Why aren’t you buying something, it’s the perfect time?’ But they are content renting until they are 35 or 40. They honestly believe up to 30 you should be out every night. They aren’t scared to spend and go overseas every year.”
The poor affordability of housing is driving a range of new social choices and one of them is the acceptance of long-term renting. Developers such as Frasers Property Australia are tapping into the trend by building dual-key apartments, which are sold as one unit but contain two distinct and lockable self-contained sections.
Landlords who stand to benefit are those who own homes with ensuites and separate living areas, a social policy and planning analyst with urban consultancy Urbis, Roberta Ryan, says.
“Sharehousing means different things to what it did 10 years ago,” Ryan says.
“People are involved in share housing not just as a response to economic constraints, there is a proportion of people who have a philosophical commitment to shared living. They want to be ecologically responsible, or they are rejecting family lifestyle things, or taking a ‘living separately but living together’ approach. There is an opportunity for socialisation on hand, so it’s less isolating. And some of these people might be quite well off.”