Surprising Trends in Australian Property Investment: Everyday Heroes Leading the Charge

In a surprising twist that challenges common perceptions, recent Australian Taxation Office (ATO) data has revealed that some of the nation's most prolific property investors are not wealthy tycoons, but rather everyday workers in essential professions. Teachers, nurses, truck drivers, and police officers are emerging as significant players in the Australian property investment landscape, often driven by a desire to secure their children's financial future.

The ATO's findings paint a picture that's far from the stereotypical image of property investors:

- Nearly 56,000 nurses’ own investment properties, surpassing even accountants in this regard.

- Teachers collectively form the second largest group of property investors, outnumbering IT executives.

- Electricians are more likely to invest in property than real estate agents.

- Truck drivers invest more frequently than solicitors.

- Police officers own more investment properties than general medical practitioners.

These investors typically report annual earnings ranging from $45,000 to $120,000, firmly placing them in the middle-income bracket.

The Motivation Behind the Investment

In an increasing trend, many new investors are buying properties with their children's future in mind. The hope is that the equity they build over time will eventually contribute to a deposit for their children. This shift reflects growing concerns about housing affordability for future generations.

A Sydney swimming coach who recently invested in a property in Bendigo echoes this sentiment: "We want to make sure [our kids] are a lot more comfortable than we were starting a family. They don't have to wait for us to pass to get an inheritance."

Contrary to popular belief, the majority of property investors are not large-scale landlords:

- About 70% of the nearly 780,000 property investors in NSW own just one property.

- 20% own two properties.

- Only 1% own six or more homes.

The Property Investors Council of Australia, emphasizes that many investors are "everyday aspiring Australians" or "accidental investors" who held onto their first property after upgrading.

Approximately half of the truck drivers, nurses, police officers, teachers, and childcare workers who own investment properties were negatively geared in the 2021/22 tax year. This means they made a loss on their properties, which they could offset against their tax.

They warn that removing tax benefits like negative gearing could disproportionately affect these lower-income investors: "If you take away, say, the negative gearing benefit, higher income earners will still be able to invest. But the nurses and teachers will not be able to buy in."

Despite challenges, investment activity has been on the rise, with new loans to investors increasing by about 34% over the past year. Real Estate experts attribute part of this surge to "rentvesting" – where individuals, unable to afford homes in their preferred areas, invest in more affordable markets while continuing to rent.

As the landscape of property investment continues to evolve, it's clear that the motivations behind investing are shifting. Investing used to be mostly about setting yourself up for retirement. That's still one of the main reasons people invest, but it's becoming less about wealth and more about helping others.

This changing dynamic in the property market reflects broader societal concerns about housing affordability and intergenerational wealth transfer. As everyday Australians increasingly turn to property investment as a means of securing their families' futures, it's crucial that policymakers consider the diverse profile of investors when contemplating changes to tax concessions and housing policies.

DAY JOBS OF MOST PROLIFIC INVESTORS

(with no. professionals who own properties)

General manager 66,559

Teachers 64,529

CEO/managing director 60,800

Registered nurse 55,519

Accountant 49,203

Office administrator 41,144

Advertising and sales manager 40,686

Admin assistant 40,509

Project administrator 25,296

Software and applications programmer 25,024

IT manager 22,379

Electrician 21,397

Sales rep 19,114

Construction manager 18,725

Real estate sales agent 17,587

Finance manager 17,431

Sales assistant-general 17,272

Truck driver 15,738

Solicitor 15,475

Accounting clerk 15,416

Police 15,412

Call centre/customer service manager 15,040

Civil engineer 14,318

Bank teller/officer 14,316

Aged/disabled carer 14,004

Retail manager 13,969

Management and organisation analyst 13,431

Source: Australian Taxation Office

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.