The property market continues to evolve, and often, the shifts go unnoticed. Just as the landscape becomes a bit different day by day, investors change with it, too. PropertyMe’s Australian Property Investor Report 2020 compares the last decade’s average investor to its modern counterpart. It also explores the most popular postcodes of the 2000s as well as the most popular spots of recent times.
The last decade’s investor
To better understand how investors have changed over the years, it’s important to have a profile of what an investor was like a decade ago. Identifying what makes up the early 2000s’ average investor can give us a better grasp of the drastic transformation investors experienced throughout the years.
The typical investor of the 2000s was more likely to be male with an average age of 43 years old, according to University of Tasmania’s data, studying more than 1.1m loan applications from early 2003 to May 2009. Only 27% of the last decade’s investors were female.
This investor also had a net annual income of $103,200 (excluding the study’s top 100 earners, the average would be $79,404) and was likely to be married.
The research also found that in the 2000s, 27% of those surveyed were self-employed investors, while only 19% were owner-occupiers. Investors were likely professionals, holding jobs as a manager, a small business owner, or a skilled trade worker.
Lastly, the last decade’s investor owned one or two dwellings.
Profiling today’s counterpart
There have been a few shifts from the last decade’s average 43-year-old, male investor to today’s more modern one. Property investment in the early 2000s was more male-centric, but in the modern times, it is the opposite.
Forty-seven percent of property investors are now female—up 20% from the 2000s, based on data from the Australian Taxation Office (ATO). Today’s investors also have an average net income under $100,000, says the Reserve Bank of Australia (RBA).
Over half of Aussie property investors are under 50 years old. However, investors aged 60 years old and over doubled in the last decade. These individuals are more likely professionals such as teachers, lawyers, doctors, and managers.
CoreLogic’s Investor Report says that most property investors of today have one investment property, with an average of 1.28 properties per investor.
The report also found that 15.7% of Australian taxpayers have an investment property and the 50-64 age group is the most likely to own property investment.
Modern investors could also be grouped into three categories, in a non-property-specific fashion. The Australian Security Exchange (ASX) categorise investors into three profiles—next generation, wealth accumulators, and retirees.
Next-generation investors are aged 18-24, with goals to save for a home, travel, and accumulate wealth. Eighty-one percent seek stable or guaranteed returns from their investments. Twenty-five percent of next-generation investors have also invested in property.
Meanwhile, wealth accumulators are aged 25-59, planning for retirement and want to accumulate wealth. Sixty-seven percent of these individuals are seeking stable or guaranteed returns and 42% have already invested in property.
Lastly, retirees are those aged 60 years old and over. They are planning for retirement and want a supplement income. Fifty-two percent have also invested in property.
2000s most popular postcodes
In the early 2000s, one area dominated the list of the most popular areas for property investment. Investors also flocked to more regional areas, compared to capitals.
Cairns in Queensland was the most popular area to invest, followed by Western Australia’s Mandurah.
Torquay and Mackay, both in Queensland, were the third and fourth most popular areas for investment, respectively. Meanwhile, Launceston in Tasmania earned the spot for the fifth most popular area to invest in the 2000s.
Gold Coast, QLD was the sixth most popular area, while Connolly in WA and Ballarat in Victoria were at the seventh and eighth spots, respectively. Rounding up the list, Toowoomba and Bundaberg in QLD held the ninth and tenth spots.
None of these areas is in a major metropolitan centre. However, keep in mind that the data is from a mortgage provider—individuals represented in the studies were buyers just starting with their investment journeys.
During the last decade, the top 10 most popular areas for investment were not in a major centre, but in recent times there has been a slight shift from this.
Investor ownership is highest in Victoria, with 30.5% of all dwellings estimated to be investor-owned, as reported by CoreLogic. However, data from RBA suggests Queensland remains a favourite.
The report says Darwin in the Northern Territory is the top most popular area for investors of today. This followed by Gold Coast, QLD and Melbourne in Victoria.
The Harbour City is the fourth most popular postcode for investors, while Brisbane and Bal in NT take the fifth and sixth spots, respectively. Mackay, Far North, Northern, and Fitzroy—all in Queensland—have the remaining four spots to round up the top 10 list.
Despite a shift from investing in regional areas to the city, Queensland continues to be popular. In fact, 25% of the country’s investment properties are being bought in the state.
Brisbane’s property saw improvement, with property prices up 1.1% over the three months to October, according to CoreLogic’s Home Value Index for October 2019.
Investors may be flocking to QLD because of its encouraging rental yields.
“Rental yields in Queensland are much more attractive, with gross rental yields for regional Queensland and Brisbane at 5.4% and 4.6%, respectively,” says Dennis Wong, property data research specialist at Real Estate Investar.
Surprising and subtle shifts
In the last decade, the average Aussie investor experienced a few changes—some dramatic, while some are more subdued. During the 2000s, investors were mostly male, but today, 47% are female.
Excluding the top 100 earners (who earned $103,200 annually on average) of the University of Tasmania’s sample, an investor’s average annual net income a decade ago was $79,404. This is higher than what 45% of Aussie investors of today are earning, which is less than $50,000.
Despite the decline in annual income, modern investors have managed to find a way to invest, taking advantage of various Government subsidies and new technologies.
As with the case in the 2000s, investors of today are most likely a professional or a manager.
While there are a few changes in the last decade, the average investor continues to be in their forties, with baby boomers holding the majority of homes. For now, boomers are a dominant force in the market, but the next generation of investors are making their presence felt.
During the last decade, Queensland was a favourite. This trend continues today, with various areas in the state earning 6 spots out of the 10 most popular postcodes for investors. There has also been a shift from investing from regional in the 2000s to investing in some cities today, with Melbourne, Sydney, and Brisbane making the list of the most popular areas for investment.