Suburbs cashing in on $148,000 profits, while rest of Australia suffers

Exclusive: Home sellers living in suburbs with the least number of renters are more likely to make a profit than those in high-density leased areas, according to the latest data.

A study from Cotality found suburbs with a larger share of owner-occupied units grew in value by 99 per cent, compared to just 66 per cent in investor-heavy suburbs.

This accounts to a profit gap of $148,000.

The gap in homes is less significant, but there is still an $83,000 gap in profit between homes being sold in owner-heavy areas and investor-heavy areas, according to the data analysed between 2016 and 2026.

Cotality Economist Annabelle Mezieres said the difference was down to multiple factors.

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“Units in investor-heavy suburbs have historically underperformed because they can be more exposed to sudden supply spikes, changes in market sentiment, and shifts in credit conditions,” she said.

“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.” 

Figures shown to nine.com.au reveal the top 10 suburbs for home ownership in Australia.

The data shows Wattle Glen and Diamond Creek in Melbourne’s north-east have the lowest proportion of renters, with just 1.5 per cent of people living in rental homes compared to homeowners.

Figures from Cotality and covering a 10-year period between 2016 and 2026, reveal that seven of the suburbs with the lowest percentage of renters are found in north-east Melbourne or in South Sydney.

Eltham, Healesville, and Emerald in Melbourne, as well as Illawong and Menai in Sydney, all have just 1.6 per cent of homes being occupied by rentals.

Engadine, on the edge of Sydney, has just 1.7 per cent of homes occupied by renters.

On the other end of the scale, the suburbs of Kelvin Grove and Herston in Brisbane’s north have 13.2 per cent of their homes being rental properties, the highest in the country.

Yarrabilba in nearby Logan had 13 per cent, while 12.1 per cent of homes in East Brisbane are rentals. Only two suburbs in the top 10 suburbs for rental homes in Australia were outside of Queensland.

Oran Park had the highest percentage of rental properties in Sydney, with 11.7 per cent, while Camperdown and Darlington in Sydney’s inner suburbs had 11.5 per cent of their homes being occupied by renters.

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Vitality’s Thomas Clarkson said that changes to negative gearing and capital gains tax announced in this year’s budget heighten risk and could amplify the current trends.

“[It] could narrow the buyer pool in locations previously attractive to investors,” he said.

“While new builds will benefit from tax incentives, a high rental ratio could have implications for long-term capital gains.”