Investor resolve unshaken

June 30, 2020

Investor resolve unshaken

June 30, 2020

More than 70 per cent of property investors say it is a good time to buy residential property, with the majority also believing it is business as usual, according to a joint industry survey.

The Property Investment Professionals of Australia (PIPA) and the Property Investors Council of Australia (PICA) survey in mid-May found 72 per cent of investors were confident about the market’s short-term prospects – down 10 percentage points from an investor sentiment survey conducted in September last year.

The survey results, which attracted 1877 responses from across the nation, also found the coronavirus crisis had not changed the investment intentions of 80 per cent of investors over the next six or 12 months.

PIPA Chairman Peter Koulizos said the survey showed investors were overwhelmingly optimistic about the property market over the next year.

“Nearly 60 per cent of respondents indicated the pandemic had not made them change their investment plans over the next six months, with a further 18 per cent saying the crisis had actually made it more likely they would purchase a property over that timeframe,” he said.

“The survey results also showed about 30 per cent of investors were more likely to buy a property in the next six to 12 months because of the pandemic.

“It’s clear record low interest rates as well as the resilient nature of property during turbulent times are inspiring investors to continue with their plans.”

While the survey found 36 per cent of respondents had experienced a loss of income, outside of rent, during the pandemic, the vast majority, at 91 per cent, had not applied to pause their mortgage repayments.

PICA Chairman Ben Kingsley said five per cent of respondents indicated the crisis had made it more likely they would sell a property over the next six to 12 months.

“What’s more telling is more than 30 per cent said they were less likely to sell over the same period because of the pandemic, with 63 per cent indicating no change at all to their plans,” he said.

“Most investors also indicated they had the financial buffers to see them through the current economic uncertainty.

“The survey results definitively show optimism amongst investors as well as a business-as-usual attitude.

“Investors are confident about the times ahead, with many intending to purchase over the next year to take advantage of the burgeoning buyer’s market.”

Realmark Coastal Sales Associate Paul Dilanzo said while investors could sometimes have a difference of opinion depending on where in Australia they were based, he had personally noticed an increase in interested investors in the Perth real estate market.

“Investors are more confident now than at the end of last year because of a reduction of stock on the market and days on market to sell a property, but also the rental returns on properties have really turned around,” he said. “The vacancy rate is down, and rental values are starting to creep up for the first time in a long time.

“It is such good value now. You can buy a two-bedroom flat for $200,000 or less, where five or six years ago they were $380,000 to $400,000, and when you are getting $250 a week in rent on a $200,000 purchase it makes sense as an investment.”

Mr Dilanzo said investor interest had not been this high in years.

“I haven’t really had investor inquires for two to three years, and now all of a sudden I am getting enquiries saying ‘hey I am an investor’,” he said. “When they enquire they ask about the rental returns, water rates, strata fees – I haven’t been asked those questions in quite some time.”

Source: The West Australian