Investors have renewed confidence and are returning to the property market, according to new research by Property Investment Professionals of Australia, which finds a surge in buyer sentiment in recent months, with corresponding price increases.
PIPA’s survey has found that 82% of investors believe now is a good time to buy residential property which is up from 77 percent in 2018. About 48% of investors are looking to purchase a property in the next six to 12 months, down from 52% in 2018.
Of those looking to invest in the next six to 12 months, 71 percent are interested in purchasing an established house, with the remaining distribution including townhouse/villa at 6%, unit/apartment at6% and a house-and-land package at 2%.
However, the number of investors in the market has fallen dramatically with 34% of investors purchasing a property over the past 12 months, down from 43% in the 2018 survey, and 47% in the 2017 survey. 16% The overwhelming majority of respondents are investment veterans who have purchased several properties in the past – 44% hold two to four properties in their portfolio, while another 17% hold five to 10. This was down on the 2018 numbers showing 45% and 21% respectively.
That said, there was a good representation from first-time investors. Of all respondents who purchased in the past 12 months, 21% (85) purchased their first investment property in the year. Of these first-time purchasers, 75% purchased an existing property (down from 83% in 2018) while 16% purchased new or off-the-plan (up from 14% in 2018). The remainder purchased vacant land. The rise of the rentvestor is well and truly established in this cohort. Among these first-time investors, just over one third (34%) identified as renting elsewhere while the remaining 66% owned the home they lived in.
The survey found that 88% of all investors continue to think that more education is needed around the risks and benefits of investing in property. Virtually all (93%) investors continue to think that any provider of advice should have formal training.
About 90% of investors believe the property investment industry should be regulated and licensed the same way financial planners, mortgage brokers and real estate agents are. 87% of investors are aware that PIPA exists – a similar result to the 2018 figure – while 31 percent said an advisor’s PIPA membership influenced their decision in selecting them.
PIPA chair Peter Koulizos says that, combined with spikes in activity from other buyers (particularly first-timers), indicates that a market recovery is in full swing. A revival in investor activity is likely to put upward pressure on prices.
The PIPA research mirrors the findings of the ANZ Property Council Survey, which reported a rise in investor confidence for the first time in 18 months. “Signs of recovery have been emerging for some months, with sentiment turning around since May,” ANZ Senior Economist Felicity Emmett says. “Clearance rates have picked up sharply, prices have been rising strongly and housing finance is starting to pick up.”