By Phil Ringuet
With house prices going gangbusters in the first half of 2021, is it still a good time to buy property? The majority of investors think so, according to the latest annual survey. And investors have their sights set on one city in particular.
The 2021 PIPA Property Investor Sentiment Survey, which gathered insights from 800 property investors across the country in August, found more than 76% of investors believed property prices in their state or territory would increase over the next 12 months.
That’s up strongly from 41% this time last year, when COVID-19 had some investors a touch nervous.
“When we think back to last year, which was a time of much fear and uncertainty, it’s clear that property investors and the market, in general, has weathered that turbulent period better than anyone dared to hope,” said PIPA Chairman Peter Koulizos.
Here are the top five trends the PIPA survey identified.
1. Most investors believe it’s a good time to invest
This year’s survey found that nearly 62% of investors believe that now is a good time to invest in residential property, which is a tad down from 67% in 2020.
PIPA says that dip in confidence may be due to the high property price growth this year as well as significant lockdowns taking place at the time of the survey.
2. The sunshine state looks to be the property hotspot
This year’s survey produced the biggest ever margin when it came to the location investors believe offers the best potential over the next year.
“A staggering 58% believe the sunshine state [Queensland] offers the best property investment prospects over the next year – up from 36% last year,” Mr Koulizos says.
New South Wales came a distant second at 16% (down from 21%), and Victoria was third at 10% (significantly down from 27%).
Brisbane also beat its capital city counterparts, with 54% of investors believing it has the rosiest outlook.
Mr Koulizos says the boost could be to do with Brisbane being named host of the 2032 Olympic Games, and significant upcoming infrastructure spending.
“All of these factors, as well as the affordability of property in southeast Queensland and strong interstate migration, are some of the reasons why investors are so optimistic about market conditions there,” he adds.
3. Regional and coastal markets continue to grow in demand
Although investors still believe metropolitan markets offer the best investment prospects at nearly 50% (down from 61% in 2020), regional and coastal markets are closing the gap.
A quarter of property investors now favour regional markets (up from 22%), while 21% of survey respondents have their eye on coastal areas (up strongly from 12% last year).
4. Fewer investors looking to sell
The lingering impacts of the global health emergency – as well as robust price growth over the past year no doubt – mean fewer investors (59%) are looking to sell a property this year compared to last year (71%).
“Part of the reason for the uplift in property prices over the past year has been the continued low levels of supply in most locations around the nation,” Mr Koulizos notes.
“With a decrease in the number of investors indicating they intend to sell over the short-term, it seems unlikely that this boom market cycle is going to change anytime soon.”
5. Almost three-quarters of property investors use a mortgage broker
Just 17% of respondents secured their last investment loan directly via a bank, while 4% used a non-bank lender.
The vast majority (72%) of respondents secured their loan through a broker, a slight increase on last year’s figure of 71%.
While 72% of respondents said they’d use a broker to finance their next investment loan.
It just goes to show that it doesn’t matter how far you are on your property journey – whether you’re a first home buyer, refinancer or savvy property investor – we can help you every step of the way.
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