Home owners are looking to purchase an investment property further away than ever before, with COVID-19 likely to accelerate this trend, according to new research.
A study by MCG Quantity Surveyors, who has commissioned depreciation reports in the year to May, found that home owners are now buying investment properties that are almost 300 kilometres away.
MCG Quantity Surveyors director Mike Mortlock believes this is a time of change as investors in the past have often sought the comfort of buying what they know.
“There’s been a tradition among Aussie investors to invest where they know and, in general, they know where we live,” Mr Mortlock said.
“The idea of wandering too far from your ‘locality of comfort’ frightened investors in the past, so an average distance of 293 kilometres is substantial.”
“The numbers showed that just 6.9 per cent of Australian-based investors bought within their home suburb. I’d suggest this is a dramatic drop from the proportion we’d have seen 10 or 20 years ago.
“In fact, of this domestic group, around 30 per cent were buying more than 200 kilometres from home,” Mr Mortlock noted.
The property expert said that while many still preferred local investing, the large percentages investing remotely looked set to rise.
“Of the clients studied, 36 per cent bought within 10 kilometres of their principal place of residency, but a number of factors at play indicate we’ll see even more investors ‘going remote’ in the future.
“Readily available online information combined with easy access to independent professionals like buyer’s agents have made it a cinch to confidently buy in national hotspots regardless of where you reside.
“In fact, investors have never been better educated about the best locations for investment,” he said.
Mr Mortlock believes the COVID-19 pandemic will likely see more investors seek properties further from their principal place of residence.
“Regional localities and smaller cities continue to gain appeal – and the ability to work from home will only boost their attraction, particularly in lifestyle hubs.
“For investors who are simply interested in seeking locations where there is good rental demand and potential for capital gains, following the population makes sense,” Mr Mortlock concluded.