How confident are you feeling as a property investor?
Is all the negative news in the media getting to you?
If you’re like those investors recently surveyed by the Property Investment Professionals of Australia’s (PIPA) you’re likely to be looking past the short term obstacles and remaining positive.
Key points from the survey:
- Australian property investors looking past short-term challenges, including APRA’s crackdown on investor lending
- The prospect of long-term wealth creation and capital growth continue to attract investors to real estate
- Qualified professionals are an increasingly important asset for investors
In spite of challenges posed by the tightening of lending by banks, and ongoing fears of a housing bubble, Australian property investors remain reasonably upbeat.
According to the Property Investment Professionals of Australia’s (PIPA) 2015 Property Investor Sentiment Survey, which gathered insights from more than 1,000 property investors, well over half of investors (63%) believe now is a good time to invest in property and 60% are looking to purchase a property in the next 6-12 months.
Only 20% of investors say that concerns over a property bubble have caused them to put their property investment plans on hold.
According to PIPA’s survey, an overwhelming majority of investors (74%) consider metropolitan markets are the most appealing place to buy right now.
And Brisbane was identified by 58% of investors as being the state capital which currently offers the best investment prospects.
A number of issues are keeping investors awake at night
A third (32%) of property investors say that recent changes to lenders’ policies have impacted on their ability to secure finance for an investment property.
However, 37% say it hasn’t impacted them and 49% reported buying an investment property in the last year.
A tightening of lending by banks to property investors is – by a small margin – the biggest concern for investors.
Some 20% say it is the most important challenge (out of eight identified in the survey).
This issue was only slightly more important to investors than a correction in property prices (top concern for 19%) or a possible removal of negative gearing (16%).
When it comes to negative gearing, the survey found that only around half of investors (54%) have negatively geared property and tax considerations are the most important reason for investment for just 7% of investors.
Property professionals are becoming more important
The survey results show that property professionals are becoming more important.
Of those surveyed, two thirds (66%) secured finance for their last investment property from a mortgage broker.
Investors also seek advice from many other sources, including lawyers/conveyances and accountants and there is strong interest in using property investment advisers.
More regulation and education are needed to protect investors
The survey found that a significant 67% of property investors believe Australia needs a more comprehensive education program for property investment and 91% believe that people who recommend property investment should be regulated and licensed.
Unlike other asset classes, property is not classified as a financial product by ASIC and the provision of property investment advice remains unregulated.
PIPA is continuing to lobby the federal government to bring property investment advice into a regulatory framework and we remain dedicated to supporting a healthy, sustainable property investment industry where education and regulation support good outcomes for all involved.
PIPA’s 2015 Property Investor Sentiment Survey – Key stats at a glance
- 1063 survey responses
- 63% of investors believe now is a good time to invest in property
- 60% of property investors are looking to purchase in the next 6-12 months
- Only 20% of investors say concerns over a property bubble have caused them to put their plans on hold
- 32% of investors say changes to lenders’ policies have impacted them
- 66% of property investors secured finance for their last deal via a mortgage broker
- 91% of investor believe people who recommend property investment should be regulated and licensed
For a copy of the 2015 Property Sentiment Survey Report and full survey results visit www.pipa.asn.au/survey2015