In some suburbs across Australia almost all the homes are investment properties, including some of Sydney and Melbourne’s inner-most property hotspots, new research shows.

Across the country some 2.6 million homes are owned by investors, CoreLogic’s Profile of the Australian residential property investor report found.

When cross-referencing property records for indicators, including rental advertisements and the owner’s address being different from that of the residence, CoreLogic head of research Tim Lawless said some broad patterns emerged.

First, investors dominated the markets around typically strong rental market areas, such as inner-city locations near hospitals and universities.

This included Sydney’s Ultimo, North Sydney, Kingsford and Enmore, and Melbourne’s Elwood, Brunswick, Hawthorn and across the Hoddle Grid. In Melbourne, the analysis found it was “rare” to find a suburb within 10 kilometres of the CBD where investors made up less than half of apartment owners.

Nationally, mining regions and holiday areas had a large proportion of investor owners. Apartment investors in Queensland were most concentrated around South Brisbane, Deception Bay and Kelvin Grove.

“While investors have generally derived strong capital gains from their properties over recent years, growth in rental income has been comparatively soft. Investment is currently ensuring that there is ample rental accommodation and subsequently easing rental price pressures,” Mr Lawless said.

Many of the areas with high proportions of investors are “renter’s, rather than landlord’s, markets”, he said.

Ultimo, which topped Sydney’s list with 99.8 per cent of apartments in the hands of investors, is among those areas with plenty of choice for tenants. And rental demand was unlikely to decline in this inner city student hub due to its attraction as a university education precinct, he said.

The concentration of Sydney apartment investors. Red indicates more than 75 per cent. Photo: CoreLogic One of the problems of having a high proportion of investors in one area is more volatility in the market, said BIS Shrapnel senior manager of residential Angie Zigomanis​.

Where an owner occupier would attempt to batten down the hatches in times of financial difficulty, investors could respond by putting the property up for sale.

“Investment properties are a discretionary purchase to some extent, and if times got harder they’re the properties that would be the first to go,” Mr Zigomanis said.

“It’s a risky proposition if you are forced to sell at the wrong time.”

But areas that are dominated by investors or owner occupiers are also not guaranteed to stay that way.

Sydney’s Glebe and Melbourne’s Carlton were once dominated by student share houses and a high proportion of renters. Now they’re hip, sought-after property markets where “young professionals have bought in to renovate”, he said.

And while investors are more likely to purchase off the plan apartments, these properties are often purchased by owner occupiers when they are relisted several years down the track, he said.

The concentration of Melbourne apartment investors. Red indicates more than 75 per cent. Photo: CoreLogic

Propertybuyer buyer’s agent Rich Harvey recommended purchasing investment properties in areas where home owners, rather than investors, own 80 per cent of the dwellings. This tends to be the case in blue-chip suburban areas where homes command higher prices.

“When there’s 70 per cent of [homes belonging to] investors, there’s a lot of competition. There’s rental competition where you have to be asking what differentiates your place over others,” Mr Harvey said.

“In Parramatta, for instance, the proportion of investors is 50 to 60 per cent and two-bedroom apartments are a dime a dozen,” he said.

Parramatta had the highest total apartment vacancies of any suburb over May, Domain Group data found. Randwick, Sydney CBD and Bondi Beach were among the top five suburbs.