Investors look to the regions

Property Investment Professionals of Australia has released its annual Investor Sentiment Survey with the feedback showing that even more investors believe property prices will keep rising.

The national annual survey, which gathered insights online from nearly 800 property investors during August, found that more than 76 per cent of investors believe property prices in their state or territory will increase over the next year – up strongly from 41 per cent last year.

Regional and coastal markets are the winners when it comes to investor sentiment with 25 per cent of investors looking to the regions up from 22 per cent last year, while interest in coastal locations has soared to 21 per cent from 12 per cent last year.

PIPA Chairman Peter Koulizos said that few people believed the positive investor sentiment in last year’s survey, even though history had showed the resilience of real estate time and time again.

“When we think back to last year, which was a time of much fear and uncertainty, it’s clear that property investors and the market in general has weathered that turbulent period better than anyone dared to hope,” Mr Koulizos said.

“That said, last year’s survey did forecast the strong property price growth that we have since experienced, it’s just that not many people believed us at the time.”

Good time to invest

This year’s survey found that nearly 62 per cent of investors believe that now is a good time to invest in residential property, which is down from 67 per cent in 2020, and may be due to the high property price growth this year as well as significant lockdowns taking place at the time of the survey.

Nearly 21 per cent of respondents (up from 17 per cent in 2020) say the pandemic has made them consider moving to another location with the main reasons being improved lifestyle factors (78 per cent – same as last year), working from home in the future (42 per cent down from 46 per cent in 2020), and housing affordability (36 per cent down from 40 per cent last year).

However, about 25 per cent of respondents said their motivations to move included not wanting to live in crowded cities anymore as well as wanting to live somewhere that had fewer coronavirus cases and lockdowns.

Sunshine State property winner

Mr Koulizos said that this year’s survey produced the biggest ever margin when it came to the property investment location that investors believe offers the best potential over the next year.

“Queensland has certainly emerged as the winner in a serious way,” Mr Koulizos said.

“A staggering 58 per cent believe that the Sunshine State offers the best property investment prospects over the next year – up from 36 per cent last year.

Mr Koulizos said a buying trend that began in last year’s survey appeared to be gathering momentum, with investors looking more and more outside metropolitan markets.

According to the survey, while nearly 50 per cent of investors say metropolitan markets offer the best investment prospects, this was down from 61 per cent last year.

Fewer looking to sell

Likewise, the lingering impacts of the global health emergency – as well as the robust price growth over the past year no doubt – means fewer investors are looking to sell a property this year – at 59 per cent this year, compared to 71 per cent of survey respondents last year.

“Part of the reason for the uplift in property prices over the past year has been the continued low levels of supply in most locations around the nation,” Mr Koulizos said.

“With a decrease in the number of investors indicating they intend to sell over the short-term, it seems unlikely that this boom market cycle is going to change anytime soon.”