Monday, November 26, 2012

A bit of perspective with the International Union of Tenants (part 3)

You'll recall that earlier in November we met with the General Secretary of the IUT, Mr Magnus Hammar, and heard him speak about how our rental system in Australia compares with various markets across Europe.

Magnus Hammar

It was pretty interesting stuff. As it happens, the Australian approach to home is not universally applied, but tensions between folks who profit from property and folks who live there crop up no matter where you look.

Here's a brief rundown of Magnus' key points:

First, to the numbers. More residents of Central Europe rent their homes than anywhere else in the world.

It's the Swiss (64%) and the Germans (57%) who lead the way. Australians (29%) are about half as likely to rent as residents of Switzerland or Germany.

Our own rental market, as a percentage of total housing stock, aligns more closely with the USA (34%) and England (32%), and we're far more likely to rent than Europeans in the south-east.

Our investment in social housing, as a percentage of total stock, is comparatively poor. It's interesting to note that Germany - one of the world's largest and strongest rental markets - relies fairly minimally on state funded housing.

As you would expect, the percentage of tenancies is higher in Sydney than the Australian national average - a feature that is mirrored the world over. Interestingly, the New York rate completely dwarfs the USA rate generally. Perhaps this is why rent-regulation remains on the statute books in Albany, NY?

All these figures raise an obvious question: what are the structural differences that make renting more common in European countries than in Australia?

The answer is just as obvious: security of tenure.

In many parts of Europe, long tenancies are expected. Tenancies cannot be ended without a good reason, and landlords must take steps to assist their displaced tenants in finding new, reasonably similar accommodation.

In Australia, by contrast, we do not have strong security of tenure. Tenants can be asked to leave without a good reason. In this we are not alone in the world, but it can be considered uncommon from a global perspective.

But the question still remains: which came first? Does a greater numbers of tenancies lead to stronger rights for tenants, or do stronger tenants' rights lead to confidence in renting, resulting in a greater numbers of tenancies?

Whatever the answer, a strong and well supported rental market is not a bad thing. It's not only good for tenants and their rights - it makes for economic stability in times of uncertainty as well.

See if you can spot the Global Financial Crisis on the graph below.

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