Do ageing landlords pose a problem for the property market?

With housing accounting for an increasing amount of Aussie’s budgets, a lot of talk has revolved around the fact that it’s getting harder for younger generations to afford to buy a home.

Given that they’re finding it difficult to purchase a home to live in, it almost goes without saying that younger cohorts are less likely to own investment properties as well.

According to the Australian Taxation Office’s latest statistics, more than half of all Australian property investors are aged over 50, with those aged over 60 accounting for the largest share of any age group. This trend has been accelerating over the past 20 years.

A landlord’s age might seem like a trivial detail, but as PropTrack economist Anne Flaherty recently explained, from a macro perspective an ageing landlord population has a material effect on the rental market. In a time when vacancy rates are tight and the cost of rent rising almost everywhere, a lot depends on what a landlord is hoping to get out of owning a property.

As Ms Flaherty noted, broadly speaking there are two main strategies when it comes to investing in real estate, and investors tend to prioritise one or the other: generating yield through rental income or achieving capital growth.

“While both strategies can be, and often are, simultaneously achieved, typically an investor is more motivated by one over the other,” Ms Flaherty said.

Age is one of the factors that might influence what an investor aims to achieve with a rental property, given that the length of time that an investor intends to hold a property is important in determining their strategy, while financial factors at different stages in life also have an impact.

“A younger investor, with many years left in the workforce, is more likely to favour a capital

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