Although there have been reports in the mainstream media about a predicted downturn in confidence within the property investment market, recent data suggests that investors still feel that it is a good time to buy property. The report, conducted by Smart Property Investment and the Property Investment Professionals Of Australia (PIPA), surveyed 627 investors across Australia in August and September this year to get their views about the current market, their investment decisions over the past 12 months and whether they intend to invest in property in the next 6 to 12 months.
The Property Investor Sentiment Survey found that participants were not convinced by reports that the market was “overheating” and that almost 80% still felt that it was a good time to think about investing. This figure only varies slightly from the beginning of the year when the same survey found that 84% of participants believed it was the right time to invest in property.
Interestingly, around 47% of participants in the survey indicated that they had bought an investment property in the past 12 months, with 60% of them already owning one or more properties. 70% of survey participants were also looking to buy in the next 6 to 12 months, suggesting that they not only felt confident in the market but that they were also in a strong position to be able to capitalise on opportunities as they arose. PIPA Chairman Ben Kingsley believes the figures reflect the fact that investors were impressed by the potential for steady capital growth for property when compared with other investments, and that they were looking to build their property investment portfolios in the near future.
Continuing low interest rates were also seen as a foundation for investor confidence, with around a third of the survey participants citing this as the reason they were considering property investment. There is mounting speculation among credit market traders that interest rates may be cut during the next 12 months thanks to a softening in the domestic economy, low global growth and weak commodity prices, although the majority of economists are still suggesting that rates will be lifted moderately by the end of 2015.
Other findings from the Property Investor Sentiment Survey were as follows:
- Over half of participants believed that Brisbane was now poised to become the next investment “hot spot” as prices in Sydney and Melbourne soared. 13% believed that Sydney still offered the best property investment opportunities, with Melbourne and Perth at 11% and 8% respectively.
- 70% of those surveyed had used the services of a broker to secure a property investment loan, and around the same percentage believed that they would use a broker in the future.