50% of investors plan to buy in next year

50% of investors plan to buy in next year

Posted on Monday, July 27 2015 at 10:11 AM

Recent research by property investment experts MRD Partners has revealed that more than half of property investors would like to buy a property over the next 12 months, and also that Queensland is the state of choice for property investors looking to buy.

More than half of
respondents to MRD’s Australian Property
Investor Survey indicated the Sunshine State was where their next
investment would be.

Queensland outstripped its
rival states of New South Wales, Victoria and Western Australia in popularity
by four to one, South Australia by six to one, Tasmania by 32 to one, and the
Northern Territory and the Australian Capital Territory by 48 to one.

WA was the second choice
behind Queensland, but it was a distant second, with only 13.61 per cent of
respondents indicating the state was their preferred investment location. 

Nick Lockhart, MRD Partners’
managing director, says it was no surprise Queensland was the focus for
investors going forward, explaining that there had been plenty of speculation
over the past 18 months pointing to southeast Queensland in particular as the
place to invest, largely because it was long overdue for an upturn.

“Investors know all markets
go through what we call a ‘property cycle’, where there is typically a boom,
followed by a flat market and some price correction before it lifts again, and
Brisbane is the only capital not to have experienced a substantial lift since
the GFC,” Lockhart says.

“The Brisbane market has
moved from recovery to growth but has not yet entered what we could call a
‘boom’ market, so there’s plenty of opportunity for people to get in now and
buy before that growth comes.”

Survey respondents indicated they believed the Queensland market was “on
the comeback”, along with the ACT, SA and Tasmania. New South Wales and
Victoria were considered to be at the top of the cycle, while the property
market in WA and the NT were labelled as “in a slump”.

Lockhart notes that the WA
market has recently stagnated – or fallen in some instances – due to the
slowdown in mining, which is creating opportunities in the state for investors.

But he also notes the
majority of investors who indicated a desire to buy in WA were those from the
state, which was evidence of a preference to buy “in their own backyard”.

“Alongside WA, NSW and
Victoria were also high on the shopping list for investors, which was to be
expected,” he adds.

“Even though these states
have experienced significant growth recently, they will always be popular
markets as they have a history of strong growth.”

The survey found the
majority of property investors were positive about the market, with more than
51 per cent of respondents indicating they would buy over the coming year and
50 per cent indicating they believed negative gearing would remain despite
recent political debate about its possible removal.

Investors from the ACT
expressed the highest sentiment, with 89 per cent wanting to buy in the next
year, followed by those from NSW at 66 per cent.

WA, SA and Tasmania were the
only states where the majority of investors indicated they did not want to buy
over the next 12 months.

“Now is an amazing time to
invest due to the historically low interest rates on offer – but only in
certain markets,” Lockhart says.

“Investors should focus on
those markets that are in the recovery stage or entering the growth phase of
the cycle and should avoid markets that are at – or near – the top of a recent
growth phase.

“One of the exciting things about the Australian property market is that
it has markets within it at varying stages of the growth phase at any one time.
In that sense, there’s usually an attractive place for investors to invest, and
at this time the most attractive would have to be Brisbane and southeast
Queensland.”

The MRD survey results
dispel the common belief that property investors are “rich”, with nearly 87 per
cent of respondents identifying as being from a low-(23.71 per cent) or
middle-income (62.89 per cent) household.

Investors surveyed preferred
to buy a house and land (62.8 per cent) as opposed to townhouses (15.46 per
cent) and units/apartments (14.01 per cent), and were almost equally split on
whether they preferred to buy in the inner city (47.34 per cent) or in areas
further from CBDs (45.41 per cent).

“People still believe the
value of a property investment is in the land,” Lockhart says.

 “In the past two decades master-planned housing estates have
sprung up making housing further from our CBDs more appealing. With them comes
a mixture of retail and commercial facilities, as well as residential housing,
usually with lakes, parks, community facilities, schools, hospitals and
bikeways.”

 

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