By Michael Yardney June 25, 2022

A A A

18 View comments

4 things I learned this week that you should also know

Michael Yardney's Commentary
4 things I learned this week that you should also know

A lot can happen in one week in our property markets, can't it?

So here's a look back at some of the things I read or learned this week, that I believe you should also know.

1. Housing investor demographics

Property researcher Michael Matusik recently gave a great summary of Australian property investor demographics.

About 2 million or 21% of Australian households hold an investment property.

The number of housing investors has increased by 240,000 or 13% over the last five years.

Of the two million investor households, some 68% hold just one investment property, whilst 20% hold two.

When looking at the total of 9.7 million Australian households, 14% hold one investment home, 4% hold two, 2% hold three and just 1% or 87,000 households hold four or more investment properties.

About half of the growth in investment households over the last five years has been in households holding two investment properties and another 25% of the lift has been in households holding three investments.

Matusik's table shows that homeowners hold 80% of the investment properties and 20% of renters hold an investment property.

Not surprising, housing investments are mainly held by older residents.

Many investment properties are estimated to be worth around $500,000, yet there is a wide range in appraised values.

2. Housing tenure

The ABS’s latest Housing Occupancy and Costs database shows that 66% of Australian households own their own property, with or without a mortgage.

This proportion has remained unchanged from 2017-18.

Over the past 20 years, however, this number has dropped by 5 percentage points from 71% in 1999-2000.

Homeowners who did not have a mortgage dropped dramatically from 39% to 30%, while those with a mortgage increased from 32% to 37%.

Almost one-third of Australian households rented in 2019-20, a slight increase from 32 per cent in 2017-18.

Over the past 20 years, the proportion of renters has increased from 27% to 31%.

While the number of public housing tenants declined from 6% to 3%, the number of private tenants increased from 20% to 26%.

The trends in tenure type are more or less in line with the change in demographics.

Zoomers (born 1999-2018) and Millennials make up 47% of the total population.

They are the largest generational groups on the Australian continent, which explains why the proportion of renters is increasing.

3. Look when house price growth peaked

The attached chart from CoreLogic shows that the quarterly rate of growth in national dwelling values peaked in May 2021, shortly after a peak in consumer sentiment and a trend towards higher fixed mortgage rates.

Since then, housing has been getting more unaffordable, and households have become increasingly sensitive to the higher interest rates as debt levels have increased, savings have reduced and lending conditions have tightened.

Add to that rising inflation and a higher cost of debt, and it all flows through to less housing demand.

With the trend of growth easing across most regions over the past year, the annual rate of change has eased sharply over the recent months, dropping to 11.7% across the combined capital cities, down from a recent peak of 21.3% over the 12 months ending January 2022.

Rolling 3 Month Change In National Dwelling Values

4. Where in the world are the people happiest?

Based on the latest World Happiness Report, Finland is the happiest country in the world.

Meanwhile, New Zealand and Australia are the happiest in the Oceania region with a 7.2 rating, and Canada along with the United States, both with a 7.0 rating, are the happiest countries in North America.

The report looks at both tangible and intangible factors including:

Social support
Life expectancy
Freedom to make life choices
Generosity
GDP per capita
Perceptions of corruption
Positive and negative affects

About Michael Yardney Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au

18 comments

Michael Yardney 2022-06-19 13:42:52

Linda, you have a number of options and holding onto a period property in a good location like Newington in the long-term is one of them, rather than swapping and changing. However I don't know your personal situation, or your cash flow, or what yo ...Read full version

0 replies

Linda 2022-06-19 09:32:54

Hi Michael, I invested in a Victorian period residential property in Newington - central Ballarat Victoria just before the current downturn. No one saw it coming! Previous capital growth has been strong before I bought in the area but has gone negat ...Read full version

1 reply

Michael Yardney 2022-05-23 12:09:52

Suresh - I can't answer this for you without knowing what your current situation is, what your budget is, what your cash flow position is, how risk averse you are. However I can say this is the location that is definitely not on our radar and will un ...Read full version

0 replies

Would you like to share your thoughts?

Linda June 19, 2022

Hi Michael,
I invested in a Victorian period residential property in Newington – central Ballarat Victoria just before the current downturn. No one saw it coming! Previous capital growth has been strong before I bought in the area but has gone negative in the current downturn. It’s a good area but I’m not sure whether I would be better to renovate and hold for rental and weather the financial downturn which has impacted on this area currently or renovate and flip then buy in the Mornington Peninsula or Yarra Valley Melbourne now for future growth? Any thoughts?

1 reply Reply

Michael Yardney June 19, 2022

Linda, you have a number of options and holding onto a period property in a good location like Newington in the long-term is one of them, rather than swapping and changing.

However I don’t know your personal situation, or your cash flow, or what you’re aiming to achieve. And all these must be taken into account when making a recommendation.

That’s why we always start by building a Strategic Property Plan for clients of Metropole and this allows them to make their decisions based on numbers not emotion.
If you’d like us to help you to please find out more and leave your details here

0 replies

Suresh May 23, 2022

Will Yarrabilba have a good capital growth. Is it a right investment property

1 reply Reply

Michael Yardney May 23, 2022

Suresh – I can’t answer this for you without knowing what your current situation is, what your budget is, what your cash flow position is, how risk averse you are. However I can say this is the location that is definitely not on our radar and will underperform because of the demographics

0 replies

Jeet May 1, 2022

Hello Michael
The house prices are almost unaffordable for middle class earners in most of the cities on the east coast, where Perth seems to be still looking good to buy a house at reasonable cost. Will WA be a good option for investment purposes in the near future?

1 reply Reply

Michael Yardney May 2, 2022

Jeet – I don’t know what your budget is nor your long-term goals, so can’t really give you a personal advice, however I would steer clear of the Perth market as it has under performed over the long term and is likely to continue to do so. If you can’t afford a house a family friendly apartment could be a good investment if purchased in the right location

0 replies

Deb Abadia February 20, 2022

Hi Michael, there seems a lot of talk about the middle ring suburbs doing well. My question is, how do you think the Mornington Peninsula will go as property have sky rocketed there. Do you think they will continueThanks.

1 reply Reply

Michael Yardney February 21, 2022

yes the Mornington Peninsula will continue doing well Deb – it’s not only the middle ring suburbs that are going to perform strongly

0 replies

Anton Ady December 26, 2021

I look back to the first half of the 1990’s when property markets came off up to 18% then recovering from around 1997. Since then our property markets have risen almost exponentially with intermittent “minor” pull backs yet there have always been doomsayers along the way without a return to the early 1990’s. A lot has happened since then with multiple wars, high immigration until Covid, the introduction of GST, the wage to house price multiple increasing, and so on but the same could be said in the lead up to the early 90’s house price collapse with the introduction of a flexible exchange rate, inflation, “a recession we had to have”, a stock market collpase and so on. I believe in “never say never”, so the question from this background is what could precipitate such a similar decline to the 1990’s?

1 reply Reply

Michael Yardney December 26, 2021

Anton – we had a major recession in the 90s, I remember it well, and if the same happens again it is very likely our property markets will suffer badly again

0 replies

Sunsal December 7, 2021

Hi Michael
What is your suggestion in investing in Boxhill North, Vic? (median – 1.3 to 1.4Mil)
I have checked Boxhill South, Boxhill North, Blackburn South, Blackburn North etc but my thinking is Boxhill North is better. Please advice

1 reply Reply

Michael Yardney December 7, 2021

I really can’t answer this without knowing a lot more about you because what makes a great investment for one person is not the right property for someone with a different set of needs becuase they are at a different stage of their investment journey – start with a plan a strategy – not a location

0 replies

Ansari October 31, 2021

Hi Michael , Do you see any price growth in Mount Druitt, Sydney for both houses and townhouses close to station with approval of a $1.49 billion revamp of the Mt Druitt CBD ?

1 reply Reply

Michael Yardney October 31, 2021

There is still substantial price growth likely in most Sydney suburbs, but moving forward it is likely that areas like Mount Druitt will lag behind the more affluent areas.
Those living in the Mount Druitt region are people who are not experiencing higher wages growth at the time when property values are increasing. This suburb is not on my radar

0 replies

Eleanor Joan July 26, 2021

Hi Michael,
Point number 3- how does this take into account foreign property owners in Australia?

1 reply Reply

Michael Yardney July 26, 2021

That’s a great point Eleanor. Over the last couple of years foreign investors have become a smaller part of our property market, as banks both locally and overseas have been reluctant to lend to them, meaning more overseas investors are buying their properties with cash. However these statistics do not take into account overseas loans held against local properties

0 replies

Rasanjali June 12, 2021

Will the middle ring suburbs like Rowville, Vic increase in price as well ?

1 reply Reply

Michael Yardney June 12, 2021

Rowville is not a middle ring suburb- it’s an outer suburb being around 31 km form the CBD, but it will keep growing in value, but not a s strongly as the more affluent “older money” suburbs

0 replies

15 more comments...

4 things I learned this week that you should also know

1. Housing investor demographics

2. Housing tenure

3. Look when house price growth peaked

4. Where in the world are the people happiest?

googletag.cmd.push(function() { googletag.display('div-gpt-ad-1652270249974-0'); });

Would you like to share your thoughts?

Guides