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Jeremy Sheppard Blog post by Jeremy Sheppard

Why does the Proportion of Renters matter in an Australian suburb?

Hi I’m Jeremy Shepherd.

I’m talking about the Proportion of Renters to owner occupiers. This is one of the metrics we use at Empower Wealth when conducting our research.

Of all the people that live in a suburb, the proportion of renters to owner occupiers is the percentage of renters versus all residents.

We want the lowest proportion of renters to owner-occupiers.

That’s an investment grade market to us.

The reason why is because tenants take poorer care of a rental property than owner occupiers do. Similarly, landlords aren’t going to over-capitalise on a property if it’s just a rental. But owner occupiers take great care in their property — they’re far more likely to over capitalise.

This means property values are more easily maintained.

There’s also the issue about supply and competition if you are buying in a market that has a large proportion of renters to owner-occupiers — you’re competing with a larger number of landlords. Ideally, you don’t want to compete with any of them.

So, you want the lowest possible proportion of renters to owner-occupiers. And this is why we look at this indicator, this metric, when we’re conducting our research.

But it’s not the only metric we look at.

If you want to look at more metrics, check out our research page.

Feel free to put some comments at the bottom.

Thanks very much for watching.

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