[Podcast] My predictions for property in 2018

What is ahead for 2018?

I will give some of my predictions at the end of the show, but first we are going to talk about this year’s Property Investment Sentiment Survey.

To help discuss this I’m joined by Metropole Property Strategist Ahmad Imam because sentiment plays a big role in how the property markets perform.

2017 Property Investor Sentiment Survey

Over 2,200 Australians have taken part in this year’s Property Investor Sentiment Survey run by Michael Yardney’s Property Update in conjunction with Your Investment Property magazineNew Year Concept

Being Australia’s longest-running and largest survey of Australian property investor sentiment, it showcases insights from 2,250 property investors and would be investors across the country. Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.

One of the surprises is that despite our property markets moving to the next phase of the cycle and slowing down 1 in 2 investors plan to buy a property in the next 12 months.

However, they are realistic that they won’t enjoy quick and massive capital growth in the near future, but they still intend to buy more property in the next year.

It’s clear that property buyers are intending to remain as active as ever, despite the fact that the boom is now well and truly over in Sydney, and strong growth isn’t widely anticipated in 2018.

Our survey reveals that 50% of respondents plan to buy another property in the next 12 months, and 60% believe now is a good time to buy property. 3 toxic habits that sabotage your property investing

This is despite the fact that the majority of respondents (64%) believe that property prices will remain flat, or increase by less than 5%, over the next year.

It’s also interesting to note where investors are planning to buy: more than half the respondents believe that Melbourne will exhibit the best capital growth over the next 5 years (52%), with Brisbane not far behind (45%).”

Their focus is on long-term capital growth, rather than an immediate equity boost, and they’re looking at property that has potential to add value,

Perhaps unsurprisingly, it also reveals that many investors are feeling the impact of APRA-led lending restrictions.

“Around half of the respondents reported that the recent changes to lending policy have impacted their ability to purchase another property, while 36% say that meeting the banks stricter serviceability criteria will be their biggest stumbling block to purchasing a property,” said Sarah Megginson, editor of Your Investment Property magazine.

Q1. How many investment properties do you currently have in your portfolio? 40392725 L

  • That fact that 90% of respondents to our survey already own an investment property and more than 50% owned 3 or more properties showed that we are surveying a group of more investment savvy Australians.

Q2. What is your preferred investment strategy? 

  • Close to 80% of respondents had a long term view of property as a high growth asset – rather than expecting cash flow from their properties.

Q3. Is your property investment portfolio negatively geared or does it generate positive cash flow?

  • Despite the vast majority of investors investing for capital growth, only 37% of investors held negatively geared properties suggesting that, over time as rents increase, negatively geared properties become neutrally geared and eventually provide cash flow.

Q4. Do you believe now is good time to invest in residential property? ​ location map house suburb area find

  • 61% of respondents believe now is a good time to invest despite the fact that the majority of respondents (64%) believe that property prices will remain flat, or increase by less than 5%, over the next year. Clearly they are taking a long term view.

Q5. Are you planning to buy an investment property in the next 12 months? ​

  • Half the respondents plan to buy an investment in the next year again showing strong consumer confidence. Interestingly this is much the same as 12 months ago (52%)

Q6. What type of property would you buy?​

  • More than three quarters would buy a property with land – a house, townhouse or villa unit. Apartments (9%) are out of favour at present – and not surprisingly so – as house price growth is significantly outperforming apartments in most capital cities

​Q7. Would you buy​? 

  • 42% of these investors saw an opportunity to “manufacture” capital growth by purchasing property with renovation or development potential property investment

Q8. Where would you buy for the best capital growth over the next 5 years?

  • Melbourne was seen as the most likely capital city to deliver strong capital growth over the next 5 years (52%), closely followed by Brisbane (45%). These are the same to growth capitals that readers suggested 12 months ago and in virtually the same proportions (50% Melb and 45% Brisbane)

Q9. What type of property do you think will make the best investment over the next 5 years?

  • A detached house in the inner and middle ring suburbs of a capital city was seen as the best medium term investment (37%) while 23% will be looking for a property with the potential to add value.

Q10. What is your property investment “end game”? ​ 

  • Most investors realised they’d need to build an asset base of properties and then live off the rents

Q.11 Are you planning to buy a new home in 2018? 37635699_s

  • 23% of respondents plan buy a new home in 2018. This is up considerably from 14% 12 months ago

Q12. Have the recent changes in lending policies to investors impacted your ability to purchase another property? ​

  • Almost half of respondents are finding the recent tighter lending criteria impacting their ability to purchase another property.

Q13. What will be your biggest stumbling block to purchasing your next property?

  • Over a third of respondents have found the APRA imposed stricter lending serviceability criteria a stumbling block for their next property purchase. Which if you think about it is exactly what APRA was trying to achieve

Q14. Do you think now is a good time to fix interest rates?

  • Around half of the respondents (46%) felt it was time to lock in interest rates, suggesting they think that the next RBA interest rate movement will be up.

Q 15. What do you think will happen to overall property prices in 2018? economy-property-market-grow-wealth-house-dream-first-home

Investors are less confident in short term capital growth than last year –  64% believe that property prices will remain flat, or increase by less than 5%, over the next year.

Q 16. Who’s advice do you seek (or plan to seek) for property investment advice?

While 26% of respondents plan to seek advice from a property strategist or an advisor we find it surprising that 25% will seek no advice on their next property purchase. Despite the significant amount of research material and information available for free, there’s one thing you can’t get over the internet – and that’s the perspective that only comes after years of on the ground experience.

Q 17 Your gender?

I’ve always been surprised that despite our readership being relatively evenly split amongst males and females, that significantly more males complete surveys.

Q 18 What is your combined annual household income?

About the survey:

The 2017 Property Investor Sentiment Survey was conducted online by Michael Yardney’s Property Update and Your Investment Property Magazine.

This survey was first conducted in February 2011 and this year 2,239 respondents answered questions at www.PropertySentiment.com.au, making it Australia’s longest running and largest survey of its type and giving us an insight into the way Australia property investors feel and think about the market.

Michael’s Predictions for 2018:

If interest rates remain unchanged, APRA don’t impose further lending restrictions and our economic growth remains steady, in the absence of any major international surprises this is what our research suggests is likely to occur to capital city property values in 2018: What's Next?

  • The Sydney property market has run out of steam, but won’t crash like some are suggesting. Instead it is likely to grow between +4% and 6%
  • Melbourne houses, townhouses and villa units are likely to be the best performing market – +6% to 10%
  • Brisbane’s market will move up a notch, spurred buy jobs growth and infrastructure growth – +3% to 6%
  • Hobart will again perform well – +6% – 10%; encouraged by speculators chasing the next hotspot. But remember how hot spots often become “not spots” – so with few long-term growth drivers, I would avoid the Apple Isle.
  • Canberra will continue its steady performance – +4% to 7% – but excessive land tax is a strong disincentive to property investors in Australia’s capital.

Links and resources:

Quotes:

“What’s going to happen in the property markets depends on what the RBA does to interest rates and what APRA does to lending criteria.” Michael Yardney New Year 2018 Trends On Blackboard Sign And Green Plant On Wood Table At Brick Wall.business Plan For Next Year.

“Overall houses are going to do better than apartments in Sydney.” Michael Yardney

“I see a little more growth in Brisbane in the coming year then there was last year.” Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

icon-podcast-large

Subscribe & don’t miss a single episode of michael yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to michael yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Avatar for Property Update

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'[Podcast] My predictions for property in 2018' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


facebook
twitter
google
0
linkedin
0
email
Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...

REGISTER NOW

Subscribe!