TARGETING A HIGH OWNER OCCUPIER SUBURB FOR LOWER RISK
An owner occupied dwelling is one in which the owner actually lives in the property. The remaining property in the suburb is typically owned by an investor, and is occupied by tenants.
According to the most recent census (2016), the balance for an average Australian suburb is 65.5% owner occupancy, which is down from 67%, according to the same statistic in the 2011 census. At 65.5%, we have one of the highest owner occupier percentages in the developed world!
This high percentage is one of the few reasons which kept the Australian property market robust through the Global Financial Crisis in 2007/8; while property values were plummeting across the globe, Australian property values remained relatively unaffected.
In times of financial distress, the typical homeowner will not stress sell their home, instead they will hold it. Without distressed selling occuring, it is unlikely that a market will plunge in value. A higher owner occupier percentage represents a lower risk in the market.
On the other hand; a market with a high percentage of investor owned property; will typically see property values move with more volatility. As investors are more emotionally charged. In times of financial distress, they are more likely to quickly sell their investment property.
The owner occupier percentage is another statistic that should be closely analysed when reviewing a market. Typically we target a owner occupier percentage of 70%+. This is an indicator of a relatively low risk market. You may be surprised with some of the areas that have a very low owner occupier percentage, such as:
Westmead (NSW): 31%
Bondi (NSW): 39%
Fortitude Valley (QLD): 21%
South Brisbane (QLD): 30%
South Yarra (VIC): 32%
St Kilda (VIC): 33%
Adam Duffy - Partner at Meridian Australia
P: (02) 9939 3249