Despite lending curbs and debate over the future of negative gearing, Australia's property investors remain confident about the long-term benefits of investing in residential real estate, recent research has revealed.
The second annual Property Investment Professionals of Australia (PIPA) Property Investor Sentiment Survey of more than 1,000 property investors found that more than 70 per cent of respondents think now is a good time to invest in property, up five percentage points on last year.
According to the survey, while 32 per cent of investors say that recent changes to lenders’ investment policies have affected their ability to secure finance, 58 per cent are still looking to buy a property in the next six to 12 months.
PIPA also found that 72 per cent of investors are not worried about the potential removal of negative gearing, and further, only 2 per cent consider the current negative gearing concessions to be a key attraction of real estate investment.
PIPA chair Ben Kingsley commented that the results of the survey confirm that property investors remain focused on long-term benefits.
“Most property investors are looking past short-term challenges, remaining focused on the long-term wealth benefits that are available from residential real estate, including the potential for capital growth and rental income,” Mr Kingsley noted.
“Importantly, most investors are not speculating on quick gains in a low interest rate environment,” he added.
“The survey also affirms that a lot of the discussion about negative gearing misses the mark. Most investors understand that negative gearing is only a short-term cash flow position, not a property investment strategy."
The survey also revealed that most respondents (87 per cent) believe more education about the risks and potential benefits of investing in property is needed.
Further, according to the survey, 89 per cent of respondents believe that the property investment industry should be regulated and licensed in the same way as other professions.
“Unlike financial planning and mortgage broking, the provision of property investment advice still remains unregulated,” Mr Kingsley commented.
“PIPA is committed to raising the professional standards of this industry and will continue to lobby the government to regulate property investment advice and educate investors to help them make informed investment decisions,” he concluded.