Property markets in Australia remain in the spotlight because of the rising rents, political discourse, and impending changes to taxation for property investors. Still, new data suggests that much of the public debate on property investment is about the sheer volume and character of the market’s investors.
Recent data shows that there are approximately 9.7 million dwellings in the country. Out of that, approximately 2 million are owned by investors, which translates to just 22% of Australian households owning at least a single investment property, meaning 78% of households are not property investors or don’t own an investment property.
These figures, analysts of the industry believe, are crucial for policymakers as well as the public, as the demand for housing policy reform and vacancy policies is on the rise.
Investor Demographics by Income and Age
Property investment remains an exclusive domain of high-income brackets. The distribution is as follows: source
- 15% of investors belong to the lowest income quintile (first 20% by income).
- 12% belong to the second quintile (20-40%)
- 16% belong to the middle quintile (40-60%)
- 23% fall in the fourth quintile (60-80%)
- 36%, or more than one-third, fall in the top 20% bracket.
Age also plays an important role. Australians between the ages of 55 and 64 years account for 25% of investors, followed closely by 45 to 54 (23%) and 35 to 44 (22%). Those younger than 34 years make up only 13% of the total, which indicates that property ownership is heavily concentrated among older people.
Investment properties and their value estimations.
At this rate, the value of investment properties lies primarily within the moderate value range.
- 28% are valued between $250,000 and $500,000.
- 15% are worth less than $250,000.
- 24% are in the $500,000–$750,000 range
- 8% are valued at $2 million
In the case of portfolios, the majority of investor households possess only a single property:
- 68% hold one investment property (approximately 1.36 million households)
- 20% hold two (411,000 households)
- 8% hold three (155,000 households)
Only 4% of households own four or more investment properties (87,000 households). source
From this, we understand that the largest market investors, that is, high-producing investors, are still a small segment of the overall market.
Empty Homes Spark Controversy
As much as it seems shocking, nearly 580,000 investment properties are vacant. This is around 41% of investment properties not rented out, of the total investment properties. This has raised questions around the need to introduce a vacancy tax or some other form of incentive to get these properties out into the rental market.
As of now, there are approximately 7.7 million houses that are either owned or occupied by tenants with no investment properties. Amongst these, almost 580,000 individuals are renting out rooms, which supplements the market, at least to some degree.
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