When it comes to owning a home in Australia, assumptions can be quickly made between the ‘haves’ and the ‘have-nots’.
For example, Australian property investors are “apparently motivated to grow outrageously wealthy through acquiring multiple properties at the expense of lower-income and younger home buyers,” said Propertyology managing director Simon Pressley.
“The typical Aussie investor couldn’t be further removed from these unjustified characterisations.”
So let’s set the record straight: here are the hard and fast facts about property investors in Australia.
Myth #1: ‘Most property investors own several properties’
According to Propertyology analysis, more than 90 per cent of the 2,156,319 property investors across Australia only have one or two properties.
Only 20,000 or so held six or more properties.
So, the next time a politician suggests that by imposing additional taxation on the investor community, they are [actually] going after so-called ‘fat-cats’ holding huge portfolios of multiple assets,” said Pressley.
“Take a moment to remember these policies are, in fact, unfairly hurting ‘mum-and-dad’ individuals holding just an asset or two.”
Myth #2: ‘Property investing is only for the high-income earners’
The gross average Australian wage is $82,000.
But of the 71 per cent of property investors (approximately 1.5 million Australians) who had just one investment property, just over two in five have an annual income of less than $50,000.
Of all the property investors in 2017, 78 per cent of those were earning less than $100,000 a year.
“Property investment is hardly the realm of the mega-income earner according to these factual results,” Pressley said.
Myth #3: ‘Property investors invest for the negative gearing benefits’
More investment properties are running at a loss than producing profit or even cash-flow neutral.
In 21016-17, nearly two million properties saw an average annual cash loss of $6,582.
Most of those that made a profit – the average of which was $6,937 – had to pay additional tax, Pressley pointed out.
Myth #4: ‘Property investors are largely retirees and baby boomers.’
Actually, there’s quite an even split between those over and under 50 years of age.
“While just six per cent of all investors are under 30, 21 per cent are 30 to 39 years of age, and 24 per cent are 40 to 49,” Pressley said.
Just over half (51 per cent) of investors are under 50 years old, with the remaining 49 per cent older.
What the average Aussie property investor looks like
So what’s a more accurate picture of what a typical Australian property investor looks like?
“By our reckoning, the average Aussie investor will probably own just one property, have an income definitely below $100,000 per year (and possibly less than $50,000) and could be decades away from retirement,” said Pressley.
Significantly, most investors are choosing to save and make some financial sacrifices during their time in the workforce for a more comfortable retirement.
“Property investors also provide the flow-on benefit of helping provide housing options to a large swathe of the population who, for a variety of reasons, choose to live in rented accommodation.”
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