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A national survey of property investors has revealed high levels of confidence in the property market, underpinning expectations that strong investor activity will continue throughout 2014.
The inaugural Smart Property Investment/PIPA Property Investor Sentiment Survey revealed that a striking majority of investors (84.4 per cent) believe now is a good time to invest in property, with 70.8 per cent of investors looking to make a purchase within the next six to 12 months.
Capital growth opportunities (27.9 per cent), low interest rates (27.4 per cent) and property’s stability compared to other asset classes (19.6 per cent) were all cited as the top factors underlying property’s investment appeal.
Smart Property Investment managing editor Phillip Tarrant said the survey results confirmed the property market was set for a buoyant year.
“Property markets across Australia have really gathered momentum since the latter part of 2013 and all indications are, from this research, that this is set to continue throughout 2014,” he said.
“The low interest rate environment is certainly underpinning this trend, but it’s also interesting to see investors confident in property’s capital growth prospects and its recognised stability compared to other investment assets,” he said.
“It’ a real vote of confidence for Australia’s property market,” he said.
Metropolitan markets are proving most popular among investors, with 61.8 per cent of investors selecting these as their top location to buy, while mining towns are well out of favour, with just three per cent of investors looking to target these areas.
Among the state capitals, Brisbane was the investment location of choice for almost half of all survey respondents (48.3 per cent), followed by Sydney (17.2 per cent), Melbourne (14.5 per cent), (9.6 per cent), Adelaide (6.2 per cent), Darwin (three per cent) and Hobart and Canberra (both at 0.6 per cent).
The survey also revealed a strategic attitude among investors, with 59.7 per cent of respondents describing their investment selection approach as part of a careful, long-term investment strategy.
PIPA chair Ben Kingsley said these results were indicative of a more mature, professional approach to property investment.
“There are average property investments and then there are the superior investments that deliver above average capital growth and/or rental returns,” he said.
“These properties are the holy grail of property investment and they require time, due diligence and expert advice.
“The property market has calmed down over the years, and while still offering very attractive returns, careful selection has become more and more important and it’s certainly encouraging to see many investors taking a more considered approach.
“These investors will be best placed to reap the rewards that property offers.”
The Smart Property Investment/PIPA Property Investor Sentiment Survey surveyed 784 respondents between 16 January and 20 February 2014.
Other key findings of the survey included:
• Of the survey’s respondents, 9.9 per cent have invested in property via an SMSF and 17.4 per cent plan to do so in the next 12 months
• Houses are the clear favourite among investors, with a majority of respondents saying they would buy a house (54.1 per cent) as their next investment, followed by units at 26.6 per cent
• Location (80 per cent), capital growth prospects (75 per cent) and rental return (71.3 per cent) are the top three most important factors for investors when it comes to selecting a property
• Meeting loan obligations is the number one concern for investors (37.9 per cent), followed by damage to their property (22.2 per cent)