Investors looking away from home
New research from the Property Investment Professionals of Australia (PIPA) has found that nearly half of investors intend to buy interstate next year.
THE 2019 PIPA Investor Sentiment Survey found that 45 per cent of investors are looking to buy outside of the state that they live in in the next 12 months.
The survey also found that the majority, 63 per cent, of investors would consider rentvesting – renting in one location and investing in another – as a property investment strategy, which was the same percentage as in 2018.
Over one-third of first-time investors identified as ‘rentvestors’ – where they’ve bought an investment property while renting elsewhere.
PIPA Chairman Peter Koulizos said that borderless investing as a bona fide property investment strategy had blossomed over recent years.
“More and more investors are recognising that there are myriad investment opportunities around the country, rather than being blindsided by what’s happening in their own backyards,” he said.
“Australia has eight capital cities and dozens of major regional areas, which have property markets at different stages of the market cycle at the same time.”
He said serious investors recognise that considering interstate locations for their next property investment enables them to make the most of markets potentially about to rise.
A case in point was growth that had occurred in locations such as Hobart, Adelaide, Canberra as well as parts of regional Victoria, Queensland, Tasmania and New South Wales over recent years while property prices were reducing in Sydney and Melbourne, Mr Koulizos said.
“Savvy investors always consider the locations that offer the best market fundamentals as well as prospects for capital growth over the medium to long-term,” he said.
“They chose not to follow the masses, but to invest in locations before prices start to rise, such as in Sydney in 2012 and in Melbourne not long after.”
However, Mr Koulizos issued a warning to novice investors who tried to follow this strategy without expert advice.
He said investing interstate required a strong understanding of local markets and cycles as well as state-specific legislation that can impact rental returns.
“Going it alone when investing in any property, anywhere is always a risky move,” Mr Koulizos said.
“These risks skyrocket when someone tries to do that in a location that they don’t understand, plus they often buy sight unseen because of the distances involved and wind up with a dud investment in an inferior location.”
He said serious investors always use Qualified Property Investment Advisers, especially when buying in locations hundreds of kilometres from their own backdoors.
“QPIAs can recommend the best locations as well as dwelling types for investors because they have the skills, experience as well as superior research and networks across the country.”
Investors can search for and locate a QPIA by visiting qpia.com.au.