Personal residential real estate investment in Australia: Investor characteristics and investment parameters

To date our understanding of the factors affecting the housing supply stem from the private provision of new units through real estate development. This article investigates a different aspect of housing supply, the private provision of rental housing through investment in existing properties. Using logistic regression and a series of micro data sets of Australian households, we examine the investment decision of residential rental property investors over the period 1990-2004. The sample period incorporates a full real estate cycle. Our results indicate that wealth-related factors are the dominant factors driving these investments. Life-cycle factors such as marriage and children play a less important role. Most of the determinants of income property investment do not vary with the property cycle. Marriage is an exception. It became more important as house prices rose.