The UK data used in the rental market app is “misleading” to suggest Australians are renting more than they are, a report has found.
The UK’s Office for National Statistics (ONS) released a report last month that showed that the UK had “the largest rental housing stock” in the developed world.
The data also revealed that rents for Australian households increased by 4.5 per cent over the past year, and “an increase in rents was projected for 2019”.
The ONS data showed the UK’s rental stock grew by 10.3 per cent in the year to December.
However, the report also showed that Australia had a much smaller rental stock than the UK.
“The data in the report is not entirely reliable,” said Simon Wren-Lewis, chief economist at property agency Domain Group.
“It’s a good example of the kind of misleading data being produced by the ONS.
It should be used as a guide to the rental housing market.”
The ONSC report also found that Australia’s rental housing population grew by 7 per cent from December to January, which was lower than the US’s population growth of about 8 per cent.
It said the rise in rental housing supply could “likely” have been due to a “large surge in demand” for housing in the first quarter of 2019.
“This would have made rental housing in Australia a better option for some households in the short-term, given their increased disposable income and the impact of higher inflation on house prices,” the report said.
Property firm Hargreaves Lansdown, which conducted the research, said it did not want to suggest that the increase in Australia’s housing stock could be attributed to “a surge in house prices”, or a drop in supply, but that the report’s conclusions “suggest that there was a change in household income patterns” as a result of the UK government’s housing policy.
The report also suggested that there could be a “shift” in housing affordability to Australian households from the UK due to “the high cost of living in the UK”.
However, property consultant Michael Gough, who has a property agency called TIG, said that there is no “magic” to the data, and that there are several “sub-factors” that could affect the housing market in Australia.
“There are things like rising household debt and falling household incomes,” Mr Gough said.
“But what we don’t want to get into is the possibility that some of these factors are just coincidental.”
Mr Goug said he believed the “very low” price of rental properties in Australia is due to the UK Government’s policies.
“In the UK, the housing system is based on property prices, so the government does not need to build new homes,” he said.
He said that because the UK housing system does not have the same tax and transfer regime as Australia, “people who can’t afford to pay for a property can rent it for a few months and then it’s gone”.
The report has been criticised by Property Council of Australia chief executive Kate Taylor, who said it was “a misleading analysis” that “does not take into account that the data in this report is flawed”.
“I would argue that the Home Price Index, which is used by many property analysts, is a more accurate measure of the housing cost than the rental property index,” Ms Taylor said.
Ms Taylor’s group also criticised the report for using a “one-time, high-cost, volatile” index to compare Australia with the UK in terms of housing affordability.
“Rental housing is a high cost, high cost product,” Ms Anderson said.
The RentSmart report comes after the Federal Government released a “fair rent” report that showed a rise in the Australian rent rate from $1,100 to $1.95 per week.
The Australian Bureau of Statistics (ABS) reported last month on the “average rent” in Australia, which rose by 6 per cent year-on-year from $922.30 to $920.50 per week in the three months to January 2018.
However that data only covers people who live in “housing assisted households”, meaning those that live with their partner or partner’s partner.
Property Council said there was “no evidence” that the average rent in Australia was higher than the average for other developed countries.