From the 1940s radio addresses of Liberal Party founder Sir Robert Menzies to the legendary film The Castle, ideals of ownership of the family home have long been central to everyday Australian life.
But in the almost 60 years since home ownership rates peaked back in 1966, the role of the Australian family home has taken on a dual purpose as both the family castle and, over time, the single largest investment class in the nation.
In more recent years, the issue of property investment has at times been one of major political debate, as the issue of negative gearing was hotly contested across multiple election cycles.
In recent months, the debate has turned to an apparent exodus of property investors from the market for various reasons, from higher land tax rates to greater regulations surrounding rental properties.
But behind all the politics and various narratives, what do the numbers actually say? What does the past, present and future look like through the lens of property investment?
The past
Since 1994-95, the federal government’s Institute of Health and Welfare (AIHW) has been gathering data on the living arrangements of households.
Back in 1994-95, 18.4 per cent of households were renting from private landlords. Over the next quarter of a century worth of data, the proportion of households renting from private landlords rose by 42.4 per cent or 7.8 percentage points to 26.2 per cent.
It is worth noting that the latest snapshot of the data was taken during the early months of the pandemic and the proportion of households renting has likely been distorted downward significantly as a result.
But the meteoric rise of private landlords as a proportion of overall housing supply has not occurred in a vacuum.
When the AIHW began their surveys more than 25 years ago, 5.5 per cent of households were renting from state and territory housing authorities. As of the latest data, that proportion had fallen to just 2.9 per cent.
While part of that is due to various other community and social housing organisations taking the baton from direct state and territory housing authorities, the overall proportion of households in social housing has fallen to around 4.0 per cent.
If the ratio of private landlords to overall housing stock remained the same as it was in 1994-95, there would be 759,000 fewer households renting from private landlords.
However, there would still be around 590,000 more households renting from private landlords purely due to growth in overall dwelling stock.
The present
Recently, data from CoreLogic showing a rising proportion of property investors putting their properties up for sale raised questions about a potential exodus of investors from the market. At last count, CoreLogic found 32.7 per cent of total new listings nationally from property investors, up from the decade average of 25.0 per cent.
But this figure doesn’t tell the full tale.
New property listings remain well below their decade average. So while the proportion of investors selling their properties has risen, the number in nominal terms has not risen by anywhere near as much.
Meanwhile, in the realm of housing finance figures, the latest data has 35.3 per cent of new mortgages in dollar terms flowing to property investors.
The ABS has been collecting data on the proportion of new housing finance flowing to investors for 21 years. Across that time, the proportion taken up by investors has only been below the percentage of overall housing stock owned by investors in just 13 months’ worth of data.
The current state of property investors was recently summed up by Leith van Onselen, the chief economist at MacroBusiness.
“Investors are not quitting Australia’s housing market. Rather, we are seeing a significant level of churn, in which investors sell to other investors,” he said.
The future
With property investors continuing to hold a significantly higher proportion of new mortgages than they do current overall housing stock, the trend toward investors owning a greater and greater proportion of homes appears set to continue as it has over the past 25 years.
If the pre-Covid trend of investors growing their share of ownership of overall housing stock continues at the same rate, by 2031 more than 30 per cent will be owned by investors and by 2039, investors will own more than one-third of all housing stock.
It’s also worth noting that this metric is based on properties which are rented to tenants on an ongoing basis, so once the proportion of homes which are used for holiday lets and Airbnb are factored in, the proportion would be higher still.
Ultimately, with government policy and tax concessions still heavily incentivising new property investment, the rise of the property investor class and the proportion of housing stock owned by investors appears set to continue.
Tarric Brooker is a freelance journalist and social commentator | @AvidCommentator