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Owner-occupier suburbs outperform investor hotspots by up to $148k
Owner-occupier-dominated suburbs have recorded up to $148,000 more in capital gains than investor-led areas over the last 16 years, with the unit market dominating growth.
New data has shown that suburbs with a higher share of owner-occupiers recorded significantly stronger long-term capital growth between 2010 and 2026 than investor-heavy areas.
Cotality’s new Ownership Composition analysis of 3,000 suburbs over the last 16 years found the performance divide was steepest in the unit market, where there was a 34-percentage point gap.
Between January 2010 and March 2026, units in owner-occupier-dominated suburbs grew 99 per cent in value, while units in investor-heavy suburbs within the same cities gained just 65 per cent.
When applied to the January 2010 national median unit value of $436,000, the gap translated to an additional $148,000 in gross capital gains.
Cotality economist, Annabelle Mezieres, said owner-occupier-heavy suburbs had typically seen stronger capital growth, particularly across the unit segment.
She said that units in investor-heavy markets were often exposed to sudden supply spikes, changes in market sentiment, and shifts in credit conditions.
“Owner-occupiers typically buy with a focus on liveability and lifestyle, often inject capital via renovations, and hold assets longer, which supports value over time,” she said.
When it came to houses, it wasn’t as significant, with low-investor suburbs seeing values rise by 136 per cent, compared with 117 per cent in investor-heavy areas.
The data resulted in a $83,000 gap relative to the 2010 median house price of $435,000.
According to the data, the gap between owner-occupier and investor-led suburbs could further widen for all dwellings as a result of recent negative gearing policy changes and higher interest rates affecting where investors buy.
Cotality’s senior manager of analytics and data science, Thomas Clarkson, said investors wanting to buy established stock may not have access to the same tax benefits or borrowing capacity as current investors.
Investors make up 40 per cent of housing lending in the March quarter of 2026, but borrowing conditions have been tightening as a result of the Reserve Bank’s rate rises.
Additionally, properties that previously leveraged negative gearing may face cash flow pressures, with mortgage rates currently hanging around the mid-6 per cent range, while capital city rental yields average 3.5 per cent.
"While new builds will benefit from tax incentives, a high rental ratio could have implications for long-term capital gains,” Clarkson said.
“Additionally, investors are likely to weigh higher entry costs, the potential for a shallower resale market, and reduced scarcity against the appeal of tax benefits derived from new housing options.”
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