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Want predictable returns? This is the one metric investors should not ignore
When it comes to finding the next hotspots, most investors have been relying on the “classic” data, such as median prices, vacancy rates, or auction results, often overlooking other metrics that could make or break a good investment.
According to Right Property Group director Victor Kumar, relying on the median price to select the next investment suburb is a rookie mistake, as the data will already be obsolete by the time it is published.
“Median prices are old news by the time they’re published because they reflect what sold months ago, not what’s driving demand today,” Kumar said.
“If you’re making investment decisions based on median movements, you’re reacting to the past, not positioning for the future.”
He said that during their research phase, most investors have been overlooking a crucial metric that can predict long-term growth: the percentage of owner-occupiers in an area.
“Owner-occupier demand is one of the strongest indicators of long-term performance.”
“If you ignore it, you’re speculating. If you understand it, you’re investing with strategy and clarity.”
He said that while the metric isn’t widely publicised, it is one of the highest indicators of potential capital growth, as owner-occupiers behave differently from investors.
“That’s because they improve their properties, they stay longer, they buy emotionally, and they compete fiercely for quality homes.”
“It is that emotional demand that pushes prices up over time.”
He said that areas with a higher percentage of owner-occupiers tend to have better schools and amenities, stronger communities, and lower turnover, which creates stability and sustained demand, essential for a good investment.
Kumar said suburbs with owner-occupier rates above 60 per cent were well positioned for growth, with several currently meeting key investment fundamentals and tipped for steady gains.
He said that owner-occupier rates remain strong across several growth corridors, including Gympie (Queensland) at 73 per cent, Barwon (Victoria) at 72 per cent, and Gawler (South Australia) at 71 per cent.
Similarly, Petrie (Queensland) sits at 70 per cent, Penrith (NSW) at 68 per cent, Caboolture West (Queensland) at 64 per cent, and Liverpool (NSW) at 63 per cent.
Although a 60 per cent owner-occupier rate is a strong benchmark, Kumar said that some premium inner-city markets sit below that level due to higher price points rather than any underlying weakness.
He said that in tightly held inner-city pockets, tenants often outnumber owner-occupiers due to high entry prices limiting who can buy, yet these areas are supported by fundamentals such as scarcity, lifestyle appeal and close proximity to key amenities.
“Take Victoria Park in Perth, for example, which is included in my research and has an owner-occupier rate of around 47 per cent,” he said.
“That’s not a red flag – it’s a reflection of the suburb’s blue-chip status,” he concluded.
