Aussies choosing to rent in droves as house prices explode

Leah Selfe is one of a growing number of Aussies who are turning their backs on a time-honoured tradition - and reaping the benefits.

Free spirits who up sticks at will. Those who don’t want to sacrifice lifestyle for a mortgage. “Rentvesters” who build wealth so they can build a home debt free.

Meet the people who choose to rent rather than buy a property.

When single mum and business owner Leah Selfe wants a fresh outlook or if her teenage son’s commitments change, she gives notice to her landlord and moves house.

As a self-employed virtual admin assistant, Leah can work from anywhere.

“I love the idea of being able to move based on our lifestyle at the time or because we want a change,” she said.

In the past few years, she and her son have lived in houses two minutes’ walk to the beach, on a canal and now, in a beautiful, gated community.

There’s “not a chance” she would have been able to afford to buy any of those houses.

Her son, 15, has an interest in motorbike riding so they are now considering moving to acreage so he can do that “until we get bored and then we can move on”.

“It’s just nice to know that I don’t have to be stuck somewhere,” she said.

“There’s nothing holding me back and there’s no extra overheads associated with owning a property.”

While friends and family often ask if Ms Selfe planned to plant roots for the future, she says “honestly, it’s not something that’s keeping me up at night”.

And despite paying double the rent she did a decade ago, a mortgage would still be a lot more.

Leah Selfe chooses to rent. Picture: Supplied

Ms Selfe does not consider rent payments “dead money” and argues that unlike buying a home, renters don’t need to part with their life savings to secure a property.

Sure, a deposit is required, but at just four to six weeks rent – $3900 for six weeks on a $650 per week property – that’s a far cry from the amount of cash needed for a 20 per cent deposit to buy, which works out to be $160,000 for a $800,000 house.

According to the 2021 Census, the percentage of Australians who own their own homes is falling.

Census data showed that 67.5 per cent of all of Australia’s private dwellings were inhabited by owners in 2021, down from 70.6 per cent in 1999-2000.

Almost one third of Australian households (31 per cent, or 3 million households) rent their home in the private rental market, a four per cent increase during the past two decades.

Many of them rent out of necessity.

But a contingent of people rent by choice and have said that the benefits of less permanent accommodation outweighed the burden of a mortgage and responsibility of home ownership.

Since e-commerce site founder and CEO Dennis Sanders made the call to rent, “it’s been a huge relief”.

“Our first go at homeownership was a real eye-opener – we were in our 20s and had no clue about all the hidden costs and constant maintenance that comes with owning a place,” he said.

“Now, renting just takes so much stress off our plate. No more surprise roof repairs or dealing with a busted water heater at 2am.”

E-commerce site founder and CEO Dennis Sanders. Picture: Supplied

He and his partner actually save money each month.

“Plus, the flexibility is amazing. If we want to move for a job or just try out a new neighbourhood, we’re not tied down by a mortgage,” Mr Sanders said.

“Sure, we’re not building equity, but the peace of mind and extra cash in our pockets more than make up for it.

“For us, at this stage in our lives, renting is the way to go.”

Canberra financial planner Gianna Thomson said she had helped many people decide to rent rather than sink their future into a mortgage.

Some decided to rent so they could afford to live in their ideal suburb while others moved out of their home and rented it to pay the mortgage down sooner.

Renting is a better option for those who work from home because part of their rent may be personally tax deductible, whereas part of a mortgage is not, Ms Thomson said.

Tenants can also benefit from luxury amenities such as in-ground pools and gyms, which are standard at many apartment complexes for no additional charge.

Renters also do not have to pay council rates, maintenance or property repairs and pay lower insurance costs.

Ms Thomson chooses to ‘rentvest’. Picture: Supplied

Others, like Ms Thomson herself and her husband, chose to “rentvest” – use their surplus cash flow to invest in assets to build wealth in things like investment properties and shares – before they have built enough wealth to build their family home debt-free.

Lawrence Petruzzelli, who currently lives in Queensland, also rentvested.

He initially chose to rent because of the freedom it offered.

“I can get my time back by not worrying about maintenance or anything. The place is fully furnished so I don’t have to worry about any of that – I can pack my life into two suitcases and move if I don’t like it here anymore,” he said.

Lawrence Petruzzelli initially chose to rent because of the freedom it offered. Picture: Supplied

A business and tax adviser, he rented where he liked and invested where it was smart.

The strategy was tax-effective because Mr Petruzzelli could move without paying stamp duty.

He currently lives in a luxury one-bedroom apartment and owns other larger properties, which he rents out.

He uses the difference between the rent he pays and the rent he earns to pay loans down.

Everything else is tax deductible, and property managers look after his rental properties which saves him time.

Paul Davis says renting means he’s not tied financially to a single place. Picture: Supplied

“I am super happy I have done this and set up my life this way rather than listening to the ‘get a job, get a house’ mantra,” he said.

For author and inspirational speaker Paul Davis, who gets bored living in one place for too long, renting means he doesn’t have to be tied financially to a single place.

“When annoying people and pets move into the neighbourhood, I want to be free to go easily and quickly,” he said.

“All the money I would spend in loan origination fees, mortgage payments, home repairs and updating appliances over the years I can more happily spend on world travel.”

Ellen Hill is a freelance journalist