CoreLogic this week released its national Profile of the Australian Residential Property Investor Report, which found that almost half (48 per cent) of Australia’s unit stock is owned by investors, while investment ownership of detached housing comprises 17 per cent.
Darwin topped the list, with 30.3 per cent of houses owned by investors, and 63.1 per cent of units.
Queensland’s Gold Coast came in second with, 24.7 per cent of dwellings owned by investors, and 41 per cent of units.
Melbourne (19.7 and 57.8 per cent); Sydney (15.4 and 49.6) and Brisbane (21.7 and 51.5) took the third, fourth and fifth spots respectively.
The Northern Territory – Bal region followed, with 18.5 and 54.5 per cent of houses and units respectively owned by investors.
Rounding out the top 10 were Queensland’s Mackay (23.0 and 29.8 per cent); Far North (16.0 and 56.4); Northern (20.9 and 59.1); and Fitzroy (22.9 and 47.7) regions.
Adelaide (17.6 and 59.9 per cent) and Canberra (13.4 and 42.5) both made the top 20, ranking 13th and 15th respectively.
Hobart was the only capital city missing from the top 20, placing 31st nationally.
According to the report, investment concentrations tend to be highest within the capital cities, particularly Melbourne. However, large concentrations of investor-owned dwellings can also be found in mining regions and coastal markets associated with tourism and lifestyle factors.
The report showed that at a national level, investment is generally skewed towards the lower valuation brackets, with 53.4 per cent of investment-owned dwellings recording a current estimated market value of less than $500,000, compared with 46.9 per cent of owner-occupied dwellings.
CoreLogic Asia-Pacific research director Tim Lawless said, “While investors have generally derived strong capital gains from their properties over recent years, growth in rental income has been comparatively soft. Investment is currently ensuring that there is ample rental accommodation and subsequently easing rental price pressures.”
“Across the combined capital cities, weekly rents were 0.2 per cent lower over the 12 months to April 2016 whilst gross rental yields have been on a downwards trajectory since mid-2013, when growth in dwelling values started to outpace growth in rental rates.”
“Currently, it’s lower mortgage rates that are offsetting the burden of low rental yields. However, the spread between the average standard variable mortgage rate and gross rental yields has been pushing slightly higher since September last year,” Mr Lawless said.
When mortgage rates do eventually start to rise, investors will face higher holding costs, he added.
“This is likely to result in a renewed focus on recovering these higher costs via rental increases,” he said.
“However, if residential property investors are unable to implement higher rents, we can expect to see an increase in net rental losses.”