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4 things I learned this week that you should also know - featured image
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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.

Housing Investor Demographics

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.
Housing Tenure In Australia 1999 2020

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

Oc Globalhappiness Main 1

About 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

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

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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

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

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