Heavy investor concentration exposes inner city unit markets to risk
A large proportion of housing demand is currently being driven by investment.
Unfortunately in Australia we only receive information on owner occupier and investment ownership of properties every five years with the census.
Because of this, RP Data's Analytics team have built a set of rules to determine the probability that a home is owned by either an investor, owner occupier or the Government.
The Reserve Bank has specifically noted that they have concerns with the high level of speculative investor activity, specifically in Sydney and Melbourne. The following thematic maps show the capital cities and measure the proportion of homes owned by investors across each region.
The geographic trends in investor activity are very clear from these maps; investors are heavily concentrated within the inner city apartment markets.
The below maps clearly highlight that investors overwhelmingly focus their attention on inner city unit markets.
When the Reserve Bank raised concerns that there is too much investor activity taking place, it is also clear that the concentration risk is very much centred geographically within these inner city unit markets.
If we did see investors pulling out the market 'en masse' or investor demand dry up for one reason or another over a short frame of time, then there is a heightened risk of declines in market value.
Investor concentration in Adelaide's markets:
Investor concentration in Brisbane's markets:
To see the concentration of investors in Canberra, Darwin, Hobart, Perth, Sydney and Melbourne markets, click below.
Investor concentration in Canberra's markets:
Investor concentration in Darwin's markets:
To see investor concentration in Hobart, Perth, Sydney and Melbourne markets, click below.
Investor concentration in Hobart's markets:
Investor concentration in Melbourne's markets:
To see investor concentration in Sydney and Perth markets, click below.
Investor concentration in Perth's markets:
Investor concentration in Sydney's markets:
