Friday, January 15, 2016

Which Optus-approved renter are you?

Of all the contributions to The Institute of Tenancy Culture Studies, a report on renting from a Telco giant was one we’d have pegged as most unlikely. And yet, somehow, here we are. On Wednesday Optus released excerpts from 'The Renter of the Future' – a survey that purports to uncover the “attitudes, behaviour and technology trends” of Australia's tenants. Its commissioning and publication are openly driven by a product launch targeting rental households, and there's certainly no shortage of cringeworthy marketing speak throughout. So it’s tempting to dismiss it as a work of highbrow advertorial. But it does make some claims relevant to more than whether you say ‘Yes’ to a new modem, and has been attracting attention, so is worth some unpacking.

'Yes' man Josh Thomas: is this the future of renting?

A central finding of the report relates to how and why tenants are in the rental market. It claims that 27% of tenants are “flexibility renters”, whose status as tenants is attributable to [liking] the flexibility of moving when they want to”. This is in contrast to the other 73% - “stability renters” who “prefer to stay in one place for a while”.

It also contrasts markedly with our 2014 survey of the NSW rental market. When we asked “Why do you rent?” only 9% of respondents nominated ‘flexibility and mobility’. We gave respondents six options in response to this question - accounting for those priced out of the buyers’ market for now or for good, those who prefer to invest elsewhere, and those who are renting where they can’t buy. Whilst the Optus report contains no information as to the methodologies employed, it would appear that its use of a simplistic dichotomy between ‘renting for flexibility’ and ‘renting for choice’ has created a distorted picture of tenants’ motives.

The Optus study also includes a separate division of the renting population into four ‘personalities’. Only one personality, the “pragmatic homeseeker” comprising 44% of all tenants, rents due to an inability to enter the homeowners’ market. The other groupings are “pragmatic lifestylers”, “tech lifestyers”, and “tech homeseekers” - the latter categories relating to tenants' technological and digital engagement.

But accounting for tenants that cannot afford to buy, those looking to buy or build, and those saving to buy, our study found that 69% of tenants could be termed ‘pragmatic homeseekers’. We’d also note the obvious artificiality in the Optus report's division between tenants shut out of the owners’ market and those interested in the tech industry. Clearly, one can ardently desire home ownership and remain passionately interested in their smartphone. The four ‘rental personalities’ suggest mutual exclusivity where none exists. Perhaps this component of the report is merely a product of its commercial imperatives.

Finally, the Optus report does note that renters move much more frequently than owners – every 1.8 years compared to every 8 years for mortgagors and 18 years for those who own outright. But it fails to consider the disconnect between such frequent moves and the relatively low number of ‘flexibility renters’ (whether you put that figure at our 9% or Optus’ 27%). Could it have something to do with the instability forced upon tenants by our rental laws? We say it certainly could. Our study found that, of respondents who had moved in the last three years, 14% said their landlord telling them to leave was the main reason, 12% nominated a rent increase, and 4% pointed to a disagreement with their landlord. Moreover, a full 92% were worried about having to move in the future. On a national scale, a recent study from the Australian Housing and Urban Research Institute found that 27% of tenants who move house have their hand forced by eviction or unaffordability. 

So proceed with caution - it’s fair to label the key claims of the Optus report as dubious to say the least. We won't pore over its supplementary claims, though in most cases such an exercise would be better suited to an advertising blog. 

But at the very least, the mere existence of this report points to a burgeoning realisation that tenants represent an ever-growing slice of whatever market you're trying to sell into - and that perhaps we should be taking better care of them.

And yes, we also value a high-speed Internet connection as much as everybody else.

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