More than 1,800 people took part in our recent Property Investor Sentiment Survey. Run by Your Investment Property together with Property Update and Onthehouse, a CoreLogic company, this annual sentiment update is Australia’s largest survey of property investors.
So what were the biggest takeaways?
Investors who participated in the survey are optimistic about property this year, with many of them hopeful for price growth in 2020. Forty-four per cent of investors surveyed said they believed real estate prices would increase by 0–5% by the end of this year, while 18% thought it would increase by 5–10% and 15% said prices would remain steady.
Melbourne is the area that investors have earmarked as having the best capital growth prospects in the next five years, with 39% of respondents picking the Victorian capital as their preferred investment location for growth, followed by Brisbane (37%) and then Sydney (33%). Nineteen per cent also cited regional Australia as an area with capital growth potential over the next half a decade.
Interestingly, I believe that if we had run this survey just six months earlier, we may have generated wildly different results, because six months ago the environment was very different. We were in the middle of a federal election; the impact of the royal commission into banking and fi nance was still unfolding; and property prices in Sydney and Melbourne in particular were still correcting off the back of a massive run of growth.
This year has been such a roller coaster for property investors that I think we’re all pleased to see some stability return to the market – or, at the very least, the perception of stability.
Meanwhile, despite a hopeful attitude towards investing this year, investors still face a few hurdles that could prevent them from growing their investment portfolios.
Forty per cent of those surveyed said tighter bank lending policies for investors had affected their ability to purchase another property, while 26% cited challenges around loan serviceability as another limiting factor.
Despite the lower interest rates, it’s the banks’ tighter lending criteria that is creating the problem. Uncertainty about the economy and not having enough equity or funds for a deposit were also cited as roadblocks hindering the purchase of another property for investment.
I encourage those who are reflecting on their property journey to date and wondering what the ideal next move would be to consider their real estate goals. Many of our survey respondents (43%) revealed that they were investing in an effort to provide a better lifestyle and more choices for their family, while 41% were aiming to become self-funded retirees, and 38% cited early retirement as their goal.
So, what are your property goals? Take a moment to really focus not on the concept of retirement but on the concept of choice. Ultimately, I believe that’s what wealth and property is all about: creating choice so you can live life on your own terms.
Sarah Megginson is a property and finance journalist, keen investor and editor of Your Investment Property magazine
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