The findings come in the eighth Annual Property Investor Sentiment Survey of the Property Investment Professionals of Australia (PIPA) group, which gathered insights online from 786 property investors during August.
According to the 2021 PIPA Annual Property Investor Sentiment Survey, more than 76 per cent of investors believe property prices in their state or territory will increase over the next year – up markedly from 41 per cent last year.
This comes after escalating house price growth. Housing prices rose by 15.8 per cent over the first eight months of the year and 18.4 per cent above levels a year ago, the fastest annual pace of growth since 1989, according to CoreLogic.
The high values in property – which are expected to continue to climb next year – alongside ongoing lockdowns may also account for the falling number of investors who believe that now is a good time to invest in residential property.
PIPA’s survey found that nearly 62 per cent of investors believe that now is a good time to invest in residential property, down from 67 per cent in 2020.
On the flip side, nearly a fifth of investors (18 per cent) said the pandemic had made them more likely to sell their properties this year, markedly up from 7 per cent in 2020. PIPA suggests that this could also be a result of rising prices.
Nearly 21 per cent of respondents (up from 17 per cent in 2020) say the pandemic has made them consider moving to another location.
The main reasons for this were found to be:
- 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)
- 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.
While investors continue to tip metropolitan markets as offering the best investment prospects (at nearly 50 per cent, but down from 61 per cent in 2020), regional markets are growing in favour.
A quarter of investors were looking at regional locations (up from 22 per cent), while interest in coastal locations has soared to 21 per cent from 12 per cent last year.
Sunshine State property winner
PIPA chairman Peter Koulizos revealed that this year’s survey showed that the majority of investors believed Queensland to be a “winner” for property investor activity this year.
“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.
“New South Wales was second at 16 per cent (down from 21 per cent in 2020) and Victoria was third at 10 per cent, which is down significantly from 27 per cent last year.”
The number of investors who see Brisbane as the state capital with the best investment prospects has also escalated sharply when compared to last year’s results – up to 54 per cent compared to 36 per cent in 2020 – according to the survey results.
Mr Koulizos said South-East Queensland was the beneficiary of billions of dollars of major infrastructure projects that were set to transport the region, plus Brisbane was recently named the host of the 2032 Olympic Games.
Queensland has also been less impacted by extended lockdowns than the larger states of NSW and Victoria.
“All of these factors, as well as the affordability of property in Southeast Queensland and strong interstate migration, are some of the reasons why investors are so optimistic about market conditions there,” he said.
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.