The Australian property market is constantly moving, changing and evolving.
Like watching a tree grow, it might not seem as though much is happening day-to-day, week-to-week or month-to-month, but looking back at what the state of play was a decade ago, there’s a realisation of the degree to which things have transformed.
Just as the property market is changing, so too is the average Australian property investor according to the latest Australian Property Investors Report by property management software company PropertyMe
How did the face of the average Australian property investor change over the course of the 2010s?
The key findings of their report are:
- The typical investor of last decade owned one or two dwellings and was a 43 year old male who earned a net annual income of $103,200
- He was likely to be married and employed as a professional, manager or small business owner
- None of the top 10 most popular investment postcodes of last decade were in major metropolitan centres
- Last decade, Baby Boomers held over 55% of investment properties
- The typical investor of today owns one or two dwellings and is just as likely to be female as male
- The typical investor of today is also decades away from retirement, likely a professional such as a teacher, and earns a net annual income of well below $100,000
- While the average investor is in their 40s, Baby Boomers still hold the majority of homes
- 45% of investors intend to purchase their next investment property outside of their home state
- With 25% of all rental properties in Queensland, the state remains a favourite for Australian property investors
The typical investor of last decade
To understand how the typical property investor has and might continue to change, we first need to understand what this investor looked like a decade ago.
According to data collected by the University of Tasmania, which reviewed over 1.1 million mortgage applications from January 2003 to May 2009, the typical investor during the 2000s was:
- More likely to be male than female (only 27% of investors were women).
- An average of 43 years of age.
- Had a net annual income of $103,200 (but excluding the top 100 earners of the sample this average dropped to $79,404).
- Likely to be married (72% of the sample).
- Investors were found to be more likely to be self-employed than owner occupiers — 27% of investors were self-employed, compared to 19% of owner occupiers.
- Likely a professional, a manager, a small business owner or a worker with a skilled trade.
- The owner of one or two dwellings.
The University of Tasmania study also revealed where people were likely to invest last decade.
Queensland postcodes were by far the most popular, while investors were most likely to come from Queensland, Western Australia and the territories, and least likely to come from South Australia, Tasmania and Victoria.
The typical investor of today
What does the average property investor look like today?
CoreLogic’s Investor Report provides some broad numbers:
- 15.7% of Australian taxpayers have an investment property.
- Most property investors own one investment property, with an average of 1.28 properties per investor.
- The 50 to 64 age group is the most likely to own an investment property.
Statistics from the RBA show that the average Australian property investor of today:
- Has an average net income of well below $100,000: While 45% of Australian property investors earn less than $50,000 per year, the percentage of properties owned by higher income earners is going up
- Is decades away from retirement: Just over half of Australian property investors are under the age of 50, although it should be noted that the share of property investors aged 60 years and over has almost doubled in the last decade.
- Owns one or two investment properties: Whilst the number of investors with multiple properties has grown, 70% of investors still own only a single property, 20% own two, and just 10% own three or more
- Is a professional: Professionals like teachers, lawyers and doctors account for the largest share of property investors (22% of investors), with managers not far behind.
But perhaps the most dramatic change is in the amount of female investors.
According to data from the ATO, almost half (47%) of property investors are now female, up 20% on last decade.
Where are Australian investors buying property?
While CoreLogic reports that investor ownership is highest in Victoria where 30.5% of all dwellings are estimated to be investor owned, data from the RBA suggests that Queensland is still the favourite of Australian investors, with no less than a quarter of the nation’s investment properties being bought in the state.
However, less than 20% of property investors are from Queensland, showing the willingness of today’s investor to jump borders in search of a high yield investment.
According to the CoreLogic report, the following regions are currently home to the highest amount of investor owned properties as a proportion of the total dwellings:
While the parameters of this data are slightly different to those used for the 2000s list, the strength of the Queensland property investment market remains evident.
There is a noticeable shift from regional areas to the city from the last report to this one.
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The notable changes
How has the average Australian investor changed over the course of the last decade?
It’s fair to say that in the traditionally slow and steady world of demographics, things have shifted a surprising amount.
Some changes have been dramatic and others more subtle, but even these still point to more dramatic trends into the future.
Women are making their presence felt to a far greater degree than they have previously.
From just 27% in the 2000s, 47% of property investors are now female, almost double the figure.
The market remains surprisingly egalitarian, with the average homeowner holding 1.28 properties, and only one in 10 owning more than two.
However, the number of investors with multiple properties has grown relative to those with a single property.
Perhaps surprisingly, the average investor earns far less than ‘triple figures’.
Low to middle income earners have managed to find ways to invest, off the back of various government grants and subsidies, as well as a number of new technologies that make investing in and managing a property portfolio easier than ever.
The average investor is still likely to be a professional or a manager, as was the case in the 2000s.
On the back of the aforementioned tech, borderless investing is becoming more commonplace than ever.
In PIPA’s 2019 Investor Sentiment Survey, 45% of respondents said that they intended to purchase their next investment property outside of their home state.
That state is more likely Queensland than any other, with the Sunshine state remaining the most popular investment destination over the last two decades.
This isn’t to say that there aren’t similarities between the investors of today and last decade.
The ‘average’ investor is still in their forties, and baby boomers still hold the majority of homes, although there’s an asterisk here, as boomers are 10 years older now than they were, and are pushing into their 60s and 70s.
As their properties get sold or passed down through families over the next decade or two, the influence of this generation will begin to wane.
For now at least, boomers continue to be the predominant force in the property market, but next generation investors are beginning to make their presence felt.
Demographic, economic and technological shifts are all playing their part in transforming the look and behaviour of the average Australian property investor.
Source: Property Me Australian Property Investors Report