Metropole Property Strategists recent online survey of over 2,700 investors from around Australia found that 64% plan to buy an investment property this year, even though they didn’t expect much growth in the property markets over the next 12 months.
Despite all the natural disasters we’ve recently survived and all the mixed messages in the media plus concerns about interest rates and affordability, this survey clearly shows that Australians are still confident to put their money into property this year.
26% of respondents believe Melbourne will offer the best capital growth in the next 5 years and 25% would put their money in the Sydney property markets and 17% think Brisbane will have the best capital growth over the next 5 years.
It seems that investors see the current buyer’s market as a time of opportunity, even though they do not expect property values to rise strongly this year.
More than half think there will be little (31%) or no growth (34%) in property values over the next year. Of course this is not surprising, considering Melbourne and Sydney’s strong capital growth over the last few years.
Speaking with a number of Sydney investors, many feel confident a change of government at the forthcoming election will be good for property. In the past the property market has tended to slow down before an election and a change of government is likely to renew confidence and bring investors back into the property markets.
Queensland investors are looking past their natural disasters (this survey was conducted in late February, after these incidents) and feel confident about investing in property in the Sunshine state. 17% of all respondents felt that Brisbane would offer the best capital growth over the next 5 years.
“The biggest challenges for all investors will be obtaining finance or managing the negative cash flow. This week’s announcement by the Reserve Bank that interest rates are likely to be on hold for some time should give investors further confidence.”
Other key national results
- Expectations for property prices over the year: Clearly there was no expectation of a booming market with 31% of respondents expecting property prices to remain steady over 2011. 34% expected property prices to increase a little (0-5%); and 16% expected prices to fall up to 5% over the year.
- Best place to invest: 26% of respondents thought Melbourne would show the best capital growth in the next 5 years while 25% thought Sydney would exhibit the best capital growth. This was followed by 17% choosing Brisbane. Very few thought Perth (9%), Adelaide (6%) or regional Australia (5%) would show good capital growth.
- Concerns: The top three concerns about buying another investment property were ‘obtaining finance’ (33%), followed by ‘managing negative cash flow’ (23%) and ‘uncertainty in the market’ (21%).
- Buying a new home: 18% of the respondents were planning to buy a new home this year.
I’d like to thank the more than 2,700 people who participated in this survey and congratulate Chris and Jessica Higgins, who won a $2,229, 15 Month Mentorship Program for contributing.
Everyone else who took part also received some surprise bonuses – we’ll be conducting another survey later in the year.
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