Investors steer away from Australia’s biggest capitals

By Maja Garaca Djurdjevic 31 March 2021 | 1 minute read

Investor confidence in Sydney and Melbourne is down considerably, with the lack of international population growth, which has previously been a great market driver, costing Australia’s financial centres.

Investors steer away from Australia’s biggest capitals

Investor confidence in the Sydney and Melbourne markets is dropping, with the lack of international population growth said to be one of the key culprits.

According to Momentum Wealth’s new survey, investor confidence in Melbourne has fallen by 7 per cent, with only 10 per cent of investors surveyed viewing the city as the best location to invest in 2021.

Meanwhile, confidence in Sydney remained low, with only 8 per cent of investors viewing it as the capital city market with the greatest potential.

“The Sydney and Melbourne markets have recently benefitted from high levels of overseas migration; however, this exposed them to greater downside risk when international borders closed, leaving them more vulnerable to an influx in supply compared to markets like PerthPerth, TAS Perth, WA, where these levels of demand have been much lower,” Momentum Wealth’s general manager, Jennifer Wakeman, explained.

In fact, according to Momentum Wealth’s new research, Perth was seen by investors as the best capital city market in country in which to purchase an investment property, with 48 per cent of total respondents selecting the WA capital as their preferred investment location over the next 12 months.

“Western Australia has seen a resurgence in mining activity which, coupled with the state’s effective response to the COVID-19 pandemic, has helped buoy the economy and provided a boost to investor confidence,” Ms Wakeman said.

But all is not doom and gloom for Australia’s two largest cities, with both showing fairly strong results against the impacts of the pandemic.

“Despite the weakened inner-city markets, both Sydney and Melbourne have weathered the impacts of the pandemic better than many experts predicted, largely as a result of increased owner-occupier activity, especially at the top end of the market.

“However, investors remain largely absent from these two markets as they turn attention to cities like Perth and Brisbane, which are offering much tighter rental markets as well as greater affordability,” Ms Wakeman said.

For more information on why investors have their sights set on Perth, click here to tune in to our podcast.

About the author

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at Read more

Investors steer away from Australia’s biggest capitals
Investors steer away from Australia’s biggest capitals
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