Over the last four years the number of investment property loans in Australia has grown by 37% compared to an increase of only 4% in the number of owner occupied loans. These are the latest findings from the Roy Morgan Research Consumer Single Source survey of approximately 50,000 people per annum.
In 2010 just under a million (954,000) Australians 18+ had an investment property loan compared to an estimated 1.31 million as at March 2014. This growth represents an increase of 37%. Over the same period the number of Australians with an owner-occupied home loan increased from 4.66 million to 4.83 million, an increase of only 4%.
The growth in investment property loans over the last four years has come predominantly from the 35 to 64 age groups which account for 78% of the increase. The result is that 11.9% of the 50 to 64 age group now hold an investment property loan (compared to 9.4% in 2010) and 11.3% of the 35 to 49 age group had one (up from 8.5%).
Investment Property Loans by Age
Source: Roy Morgan Single Source (Australia), 12 months to March 2010 n = 49,618; 12 months to March 2014 n = 45,455.Base: Australians 18+
Within the same time period the proportion of those aged 50 and over with an owner-occupied home loan has increased with the greatest growth being in the 50-64 age group, up from 31.6% to 34.0%. The under-35 age group on the other hand showed a decrease in the number and proportion with an owner-occupied home loan.
Roy Morgan’s Helix Personas segmentation tool reveals some interesting insight into the difference between those holding investment property loans and those with owner occupied loans. The Helix Community most likely to hold an investment property loan in the 12 months to March 2014 is ‘Leading Lifestyles’ (36% more likely to hold an investment property loan than the Australian population 18+) while ‘Today’s Families’ are most likely to hold an owner-occupied home loan (45% more likely).
Norman Morris, Industry Communications Director Roy Morgan Research says:
“Going forward, Government policy and the economic climate will play a major role in whether people choose to invest in the property market or take out a home loan. Older Australians will face the prospect of cuts to pensions, and with the proposal for the pension age being increased to 70, this could impact the investment property market.
“Younger Australians may continue to find it difficult to enter the property market either for investment or owner-occupied because for both types they are competing with more cashed-up older property buyers.
“The future of negative gearing, increased property investment by self-managed super funds and interest rates are some of the factors likely to play an important role in the attractiveness of borrowing for investment property in the future.”
Roy Morgan Research
Roy Morgan Research is Australia's best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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