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This discussion has brought about somewhat of a misconception of the average property investor, prompting CoreLogic to produce a new report – Profile of the Australian Residential Property Investor – which presents the real facts about Australian property investment.
According to the report, housing is the single biggest asset class in Australia, worth an estimated $6.5 trillion and made up of more than 9 million dwellings.
Australian property investors account for a large proportion of the total property market, with the report showing that over 2 million Australians own an investment property (about 15% of the population) worth a combined total of $1.3 trillion. Each investor owns an average of 1.28 properties.
Property investment is worth considerably more in Australia than other type of investment – more than three times the value of Australian superannuation ($2.0 trillion) and more than four times the value of Australian listed stocks ($1.5 trillion).
Investors aren’t forking out on luxury properties as some might think though. Most investors target low-income housing, with over 53% of all investment properties worth less than $500,000.
The large majority of investment dollars flows into established housing. ABS data from March 2016 shows that shows investors comprised approximately 40% of market demand across for new housing stock (includes construction of dwellings and purchase of new).
In general, investment properties are mainly found in capital cities, with the heaviest concentration of properties around captured rental markets such as office precincts, universities and hospitals.
There’s little doubt that changes to negative gearing will have a dramatic effect on where and what investors choose to purchase, and on the property market as a whole.
The report hopes to help better educate those involved in the property debate. Head of research at CoreLogic Tim Lawless said it’s not meant as a criticism or endorsement of policy proposals put forward by political parties.
“Given investors own almost one third of Australia’s housing and comprise almost half of the demand for new mortgage commitments, for politicians, investors and the public at large, having an understanding of the typical profile of the Australian property investor is important,” Lawless said.
“This report is not intended to support, or implicitly criticise any political party’s taxation policy or policy platforms, but rather provide unbiased, independent statistics and analysis to inform the current housing debate,” he said.
The full report can be found at www.corelogic.com.au.