Global capital is increasingly betting on a future where many Australians rent for life rather than buy, as structural undersupply and sky‑high prices lock more households out of homeownership, according to a new Colliers Capital Markets report.
The findings come as rental vacancies edge higher but still near record lows, keeping competition intense and pushing advertised rents sharply higher.
Colliers living residential head Robert Papaleo (pictured left) said investor appetite is being driven by a mix of chronic underbuilding and affordability pressures that keep Australians in the rental market, Herald Sun reported.
“Investor confidence is driven by both the outlook for a continued structural undersupply of new housing to meet the needs of a growing population as well as more residents needing to rent for longer as house prices remain high and entry to ownership being constrained,” Papaleo said.
With vacancy rates sitting below 2% in many markets, Papaleo said such tight conditions signalled “robust rental demand, price resilience, and long-term occupancy stability”. In practice, that means rental properties are full, competition for listings remains intense, and tenants have little room to negotiate.
Papaleo said more new households were renting for longer than previous generations, with build‑to‑rent now “embedded” as part of Australia’s housing system rather than a niche asset class.
Katherine Sundermann (pictured center), Monash University senior lecturer in urban planning and design, said the shift towards renting appears structural, not just a temporary response to the interest‑rate cycle.
“There is clear evidence that Australians are renting for longer,” Sundermann told Herald Sun. “We’re seeing lower levels of homeownership at the same stage of life compared to previous generations.”
Census data shows overall homeownership slipped from about 70% in 2006 to 67% in 2021, with sharper falls among younger cohorts. Sundermann warned that “homeownership remains a major driver of wealth accumulation in Australia,” and that growing reliance on the “bank of mum and dad” risks widening the gap.
“A recent report suggested around 40% of first-home buyers receive financial help from family,” she said. “That dynamic risks exacerbating inequality, as access to ownership increasingly depends on family wealth.”
Sundermann also highlighted instability in the private rental market, particularly in Victoria, where average tenancy length is around two years, forcing many renters to move every year. By contrast, she noted that renters in countries like Germany and Switzerland commonly stay eight to 12 years, offering far more stability.
Damian Medici (pictured right), Margin Finance director, pushed back against the idea that Australians have given up on owning.
“I would strongly disagree with the idea that people are simply resigning themselves to renting forever,” Medici told Herald Sun. “For many, it’s not a lifestyle choice, it’s a financial constraint.”
A Youi survey shows 46% of Australians don’t believe they’ll ever own a home, underlining how affordability pressures are reshaping ownership hopes.
Medici said first‑home buyers are wrestling with deposit hurdles, tighter serviceability assessments, and prices that are rising faster than they can save. Medici estimated around 20% of his clients receive parental help via guarantor loans or gifted deposits.
Without that backing, he said many aspiring buyers are struggling to compete “in a market shaped by constrained supply and persistent rental demand,” even as the Great Australian Dream remains firmly in sight.
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