How many Australians own an investment property? - Pearl Financial

How many Australians own an investment property?

By Shane | Investing

May 22

Property investment is a bit of an obsession here in Australia. The media loves reporting on it and every bloke at the BBQ or around the water cooler in the office has an opinion on the property market. If you’re anything like me, you’d swear that every man and his dog owned 23 investment properties.

So I decided to dive into data released by the Australian Taxation Office (ATO) to figure out once and for all how many Australians ACTUALLY owned an investment property.

Let’s set the scene…

The ATO releases data each year around a bunch of taxation statistics. Unfortunately, the data is usually a few years old… I guess the ATO is allowing for late lodgement of returns to capture as much data as possible. In April this year (2018), they released information from the 2015-2016 financial year. I’ve jumped into this data to uncover some revealing facts around investment property ownership in Australia.

Throughout this blog, I’ve relied on data from the ATO, which you can find here. I’ve also assumed that Australia’s population is 24,130,000… which is a number that Google gave me when I googled “Australian population“…

So let’s get started…

Prefer to watch video? Check out the YouTube clip for this blog:

 

 

How many Australians own investment properties?

According to the ATO, a total of 2,097,392 Australians own 1 or more investment properties. This means that 8.7% of the Australian population can classify themselves as property investors…

This also means that less than 1 out of every 10 Australians are even remotely in a position to offer any advice on property investment. The rest can only speculate.

How many Australians own 1 investment property?

The ATO data states that 1,494,837 own one investment property, which is equal to 6.2% of the population. This also means that 71% of property investors own a single investment property only. This seems to be where most property investors get stuck…

1.6% of Australians own 2 investment properties

A total of 395,924 Australians are fortunate enough to have two investment properties, which is a fairly sharp decline (1,098,913 less to exact) from the 6.2% with one investment property. This also equates to 18.9% of all property investors.

How many Australians own 3 investment properties?

A grand total of 122,639 own 3 investment properties meaning that 0.5% have 3 investment properties… you read that right, less than half a percent.

Now for the small numbers…

When we get to 4 and more investment properties, the percentages start to get really small. There are only 45,162 (0.19%) people with four properties; 18,863 (0.07%) people with five properties and 19,967 (0.08%) with six or more properties. This means that there are less than 100,000 people Australia wide with four or more investment properties.

A very rare club indeed!

What does this all mean?

Well, if you’re like me, it means that there are fewer property investors in Australia than I originally thought… it also means that you should be careful with who you are taking advice from.

Here’s a snippet from the ATO data if you wanted to take a look…

Source: ATO Website, accessible here http://bit.ly/2GALhEZ
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About the Author

Shane specialises in helping Gen Y professionals and business owners make an impact by accumulating more assets, generating more income, and having more time to enjoy life. He has a Master of Applied Finance, an MBA, and a Master of Financial Planning. He is also a terrible golfer.

  • Darren Jones says:

    Interesting article, though a little perplexed on your choice of dataset. You’ve based investment ownership on ATO records, then attributed that against Google’s Australian population. I realise you wanted to know how many Australians…though this infers 1 in every 10 children own an investment property, which we know is not true. Anyone who is in a position to have an investment property would be lodging a tax return: 13,508,100 people to be exact (44.02% less), which makes more sense. All the percentages would be nearly double based on people who actually could.

    • Shane says:

      Hey Darren! Great point mate. When I originally wrote the article I kept it high-level so elected for the total population figure. I have always intended to ‘drill down’ a bit further into the numbers, but the general feeling is the same… less people own property than what most media outlets would have you believe.

      Your comment has actually given me some inspiration for my next article… is it ok if I attribute you with the idea?

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