Who are our Aussie property investors?

The latest data from the Australian Taxation Office (ATO) reveals that 2,245,539 Australians are invested in property. The most recent available data is from the 2020/2021 financial year. The data is broken down in many segments, from numbers of investment properties held, to age and state/territory of the property owner.

The chart below shows the breakdown of investors by number of investment properties. Over 71% of all investors only own one investment property. Just under twenty per cent own two investment properties. The number of multi-property investors diminishes quickly over this figure, and less than 12,000 investors in Australia own five properties. The ATO only count up to “six or more” investment properties for the highest property portfolio owners. This contingent represents less than 1 per cent of all Australian tax-paying property investors.

Australian property investors by portfolio size

By age group, it is quite interesting to profile investment property ownership in our country. I’ve focused on the 1-2 property ownership cohort, given that these investors represent nine out of ten investors in our nation.

Property investing is certainly an older person’s game according to the data, and there are many compelling reasons for this. Tax accountants’ advice to ‘save tax’ is a major driver for investment activity, and typically this occurs when salaries mature. In addition, the cost of living, saving for a home deposit, and family-related cashflow pressures can adversely impact investment plans for younger income earners.

However, the younger generations are well on their way also, with 18-39 year olds accounting for more than 22% of all investors.

If we focus on the largest property portfolio investors, the data may surprise. Many would have expected the highest income earners to represent this cohort, but surprisingly those individuals earning in excess of $500,000 are much fewer in number.

Considering more than a quarter of a million Australians earn above $819,324 per year, their appetite for owning six or more properties is only evident in the minority.

The data also captures whether the investor sustained a loss, (negatively geared) or a profit, (positively geared). This particular year is a quite incongruent with former and more recent years, because interest rates were dropped to emergency levels in response to the pandemic and lockdowns. “Typical” interest rates paint a vastly different picture, with considerably more losses recorded by property investors.

Despite the ‘greedy landlord’ rhetoric, the most dominant income group of Aussie investors are shown here in yellow, earning $50,000 – $100,000 per year and owning only one investment property.

Food for thought….

Source: https://data.gov.au/data/dataset/taxation-statistics-2020-21