RBA jawboning fails to deter investors

A national survey of property investors has revealed that investor demand for property shows little sign of slowing any time soon.

The latest Smart Property Investment/ PIPA Property Investor Sentiment Survey indicates that despite talk of property bubbles and concerns that property price growth is unsustainable, confidence in the Australian property market remains high.

An overwhelming majority of respondents (75 per cent) said they would continue investing in property if rates remain low.

According to the survey, 80 per cent of investors believe now is a good time to invest in property, and 68 per cent are looking to purchase an investment property in the next six to 12 months.

These figures were only slightly down from the inaugural survey conducted in February 2014, where 84 per cent of respondents said it was a good time to buy and 71 per cent of investors said they planned to buy within the next six to 12 months.

Low interest rates were cited as the most compelling reason to invest in property (30 per cent of respondents), while capital growth opportunities (25 per cent) and property’s stability compared to other asset classes (22 per cent) were also cited as top factors underlying property’s investment appeal.

PIPA chair Ben Kingsley said the survey results confirmed investors were unwavered by any concerns of the property market overheating.

“The property market is gaining a considerable amount of media attention at the moment and there has been some concern that some markets are overheated,” Mr Kingsley said.

“Certainly there has been strong price growth in some markets, but this is not the case right across the board and these survey results reinforce the fact that property remains a firm investment favourite. Investors recognise the long-term capital growth prospects property brings and they are taking advantage of a low interest rate environment to build their property portfolios,” he said.

Smart Property Investment managing editor Phillip Tarrant said the record-low interest rate environment looked likely to encourage more homebuyers and investors into the property market in the coming months.

“A clear relationship can be seen between low interest rates and property investment activity,” he said.

Over half the respondents (54.5 per cent) decided to secure their last investment loan through a mortgage broker, an increase of 1.5 per cent from the last survey.

When asked how they intend to secure finance for their next investment property, 65.5 per cent indicated they intend to do so through a mortgage broker (an increase of 2.7 per cent from the last survey) and 25.6 per cent would prefer to get their loan directly from a bank (a decrease of 2.1 per cent), indicating the demand for mortgage brokers’ services is continuing to rise.

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