Debunking the ‘Mum and Dad’ Property Investor Myth and a Glimpse into Australia’s Property Landscape - Property Inc

Debunking the ‘Mum and Dad’ Property Investor Myth and a Glimpse into Australia’s Property Landscape

The portrayal of property investors in Australia as ‘mum and dad’ landlords has long been a topic of debate, influencing public perception and policy discussions. Two recent articles shed light on the current state of the property market and challenge prevailing notions.

In an insightful article by Peter Mares, he confronts the often-repeated characterization of property investors as “mum and dad” figures. Mares argues that such language gives a false impression of the Australian landlord class. “Language shapes the way we think, and folksy terminology creates a false impression of Australia’s landlord class,” Mares says. He emphasizes that the majority of rental properties are owned by investors with multiple properties, while well-off investors largely benefit from policies like negative gearing.

Drawing attention to the issue, Mares quotes Danielle Wood from the Grattan Institute, who points out the fallacy in the system: “People who negatively gear have lower taxable incomes because they are negatively gearing”. This signifies that those who have the means to invest more heavily in property and use negative gearing as a strategy are not necessarily average wage earners.

Contrary to the prevalent “mum and dad” notion, Mares uses data to show that investors owning multiple properties dominate the rental market. He asserts that such a portrayal “lets [landlords] off the hook,” and that the property rental market is far from a cottage industry but a multibillion-dollar business.

Shifting the lens to a broader property snapshot, an article by Kyle Robbins gives a current look into Australia’s property landscape. Robbins reports on a study by Australia’s peak real estate body which revealed varying vacancy rates across cities, with Darwin leading at 3 per cent. Notably, despite the loosening of rental markets, Leanne Pilkington, deputy president of the REIA, highlighted the upward trend of rents. “The weighted average median rent for three-bedroom houses in the eight capital cities increased to $553 per week, a quarterly increase of 3.2 per cent but an increase of 9.9 per cent in the past year,” Pilkington observes.

Pilkington also draws attention to the vital need for appropriate housing policy settings, especially in the face of continued strong growth in the housing market. She concludes optimistically, stating, “It is with a return to a more moderate economic and political outlook will pressures on our housing system also moderate, which we hope to see bear out in future quarters”.

References:

Mares, Peter. “Australia needs to end the mythology of ‘mum and dad’ property investors. Landlords are not a cottage industry.” ↩ https://www.theguardian.com/australia-news/commentisfree/2023/sep/15/australia-myth-mum-and-dad-landlords-property-investors 

Robbins, Kyle. “Latest property snapshot shows promise for lessening property pressures.” ↩ https://www.smartpropertyinvestment.com.au/research/25096-latest-property-snapshot-shows-promise-for-lessening-property-pressures 

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