Over the past two decades, renters incomes have been rising faster than those of homeowners. While this might seem odd at first, the reason is simple: more high-income households are choosing to rent instead of buy. That shift has big implications for people who already own investment properties—or are thinking about getting into the market.

Renters aren’t who they used to be

Twenty years ago, most renters were younger or lower-income households working their way up. Now, more renters are in the top 40% of income earners. That includes professionals, families, and even people who could buy—but choose to rent instead.

In Sydney and Melbourne especially, nearly one in four of the highest-income households are now renters. The same trend is happening in regional areas and other capital cities.

What’s driving the change?

Housing affordability is a big part of it. As homeownership becomes harder to achieve—especially for younger Aussies—even those on good incomes are staying in the rental market longer. Some are choosing lifestyle over ownership, while others are priced out or waiting for the “right time” to buy.

The result? A bigger pool of renters with more money to spend.

Why investors should pay attention

For investors, this trend opens up new opportunities:

  • Higher rental returns: With more high-income renters, there’s potential for stronger rent growth—especially in areas with modern, well-located homes that suit professional lifestyles.
  • Better tenant stability: High-income renters are often more stable and reliable, with longer tenancies and fewer issues.
  • More demand for premium rentals: This includes apartments in inner-city areas, townhouses near transport, and homes with features like work-from-home spaces or energy efficiency.

What to watch out for

With rising demand, low vacancy rates, and more renters competing for quality homes, lower-income renters are being squeezed. This could increase pressure on governments to expand affordable housing or adjust rental laws—something for landlords to stay aware of.

Final thought

The rental market isn’t just growing—it’s changing. Investors who understand the new face of renting can position themselves ahead of the curve. It’s not just about owning property anymore—it’s about owning the right type of property in the right area, for the right tenant.