New research from the University of South Australia and RMIT University revealed that landlords already participating in affordable housing schemes are largely satisfied and that more could join if properly incentivised, AHURI reported.
In Australia, 90% of property investors are small-scale “mum and dad” landlords, and their role in affordable housing is gaining attention.
The study emphasised that small-scale landlords, often driven by financial stability, can play a significant role in providing affordable rental housing if schemes align with their financial goals.
The study identified two key landlord models: short-term investors focusing on capital gains and long-term investors prioritising steady income.
“Generally, short-term landlords focus on capital gains and negative gearing,” said Associate Professor Akshay Vij (pictured above) from the University of South Australia.
These landlords typically invest in higher-value properties and are less likely to contribute to affordable housing.
On the other hand, long-term investors were more inclined toward affordable housing, provided the schemes offered a positive cash flow. “They are moderate-income households, cashflow-sensitive, and often purchase lower-value properties,” said Vij.
Long-term investors favor programs that guarantee rental income and adjust rents to market rates. Schemes like headleasing, where social housing providers lease private rentals and sublet them at reduced rates, are particularly popular.
These programs offer advantages like guaranteed rent, reduced administrative demands, and assurances that properties will be returned in good condition.
While 81% of landlords engaged in affordable housing schemes reported satisfaction, only 39% of surveyed investors participated, largely due to low awareness. Many landlords lack financial literacy and invest emotionally rather than strategically.
“A coordinated national education program could improve participation and financial literacy, filtering out vulnerable investors,” Vij said.
By raising awareness and aligning incentives, small-scale landlords could play a transformative role in addressing housing affordability, AHURI reported.
Access the AHURI media release and report.
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