A CoreLogic report has revealed the Melbourne suburbs with the highest ratio of property investors.
Across the whole country there are around 2.6 million homes that are owned by property investors.
Predictably, investor numbers were often highest around areas with strong rental performance, driven by the usual factors of being close to the city, transport, hospitals and quality educational facilities.
An interesting find from the report showed that if there’s an apartment within 10 kilometres of Melbourne’s CBD, it has at least a 50 per cent chance of being owned by an investor.
CoreLogic head of research Tim Lawless discussed the report’s findings with Domain.
“While investors have generally derived strong capital gains from their properties in recent years, growth in rental income has been comparatively soft,” he said.
“Investment is currently ensuring that there is ample rental accommodation and subsequently easing rental price pressures.”
Mr Lawless said many suburbs with a high percentage of property investors were renter’s markets rather than landlord’s markets.
BIS Shrapnel’s Angie Zigomanis said one downside to having a high proportion of investors in one area was that it increased that area’s volatility.
“Investment properties are a discretionary purchase to some extent, and if times got harder they’re the properties that would be first to go,” he told Domain.
“It’s a risky proposition if you are forced to sell at the wrong time.”
It’s also worth noting that investor proportionality can change over time, and just because a suburb has a lot of investors now, it doesn’t mean it will always be the case as suburbs and areas often undergo significant market change.
MELBOURNE’S MOST INVESTOR-CONCENTRATED SUBURBS
Apartments
Suburb Investor-owned
Elwood 88.2%
Brunswick West 86.1%
Carlton 83.4%
Melbourne 83.4%
Hawthorn 81.9%
Thornbury 78.6%
St Kilda East 77.5%
Balaclava 77.2%
Clayton 76.9%
Armadale 76.7%
Houses
Suburb Investor-owned
Laverton Raaf 49.8%
Carlton North 46.6%
North Melbourne 45.5%
Carlton 41.7%
South Melbourne 40.6%
Richmond 39.6%
Officer 38.2%
Collingwood 37.8%
South Yarra 37.5%
Port Melbourne 37%
