The number of property investors has also surged – from 696,000 in 1990 to 1.75 million in 2010 – and nearly 60% of investors are baby boomers.
“Two-thirds of investors were negatively geared in 2010, losing on average $2,750 per year, or a total of -$4.8 billion. Three quarters of negatively geared investors earned less than $80,000.”
Van Onselen says the country’s ‘rigid’ urban planning system has ensured that the increased demand has manifested in rising prices rather than increased dwelling construction.
“Empirical evidence from the US and elsewhere shows that markets with responsive land-use regulations have more affordable housing markets and experience less price volatility, as changes in demand manifest more in new construction rather than prices – growth in US house prices bore little relation to income and population growth.”