September 22, 2015
The rental property market is becoming one of the fastest growing segments of the Australian property market as increasing numbers of Australians turn away from home ownership. After more than a decade of spectacular growth in residential house prices, housing affordability is out of reach for many Australians. One small bright spot for those seeking home ownership is the boom in housing construction and investment that has substantially increased housing supply and worked to keep rental yield growth to its lowest rate in 20 years. Although the traditional forces of supply and demand dictate rental pricing, the manner in which people search and decide on properties to rent is changing dramatically.
While major success stories such as seek.com and realestate.com.au achieve tens of millions of visits per month, there are now a number of companies emerging within each of these categories that are providing specialised content and products aimed at specific segments. With now over seven million Australians renting, an average lease turnover of around 12 months and renters primarily in the key 18-35 year old demographic, the fragmented rental market offers particularly strong opportunities. One company making substantial inroads is ASX listed Rent.Com.Au (RNT).
Rent.com.au operates a website and mobile platform dedicated to rental property in Australia. It commenced operations in 2007 and with 334,000 unique visitors in August 2015, it has become Australia’s top dedicated rental property website. The business is positioning itself as the long term home for renting by offering a single location from which to search the entire rental market including both agent and non-agent landlord listings. In addition to listing fees, the company earns transaction revenue from offering rental bonds, identity verification and rental history checks, utility connection services and rental property statistics. A number of other complementary products including insurance and removalist services are in development. Although not yet financially covering costs, the company looks to be making good progress in becoming a major force in the rental market.
This is general advice only and you should not act on it without consulting your financial adviser. Call us on 03 9859 7899 if you would like advice particular to your own financial circumstances.