More than 1,800 people participated in our recent survey on the sentiment of real estate investors. Managed by Your Investment Property in collaboration with Property Update and Onthehouse, a CoreLogic company, this annual sentiment update is Australia's largest survey of real estate investors.
So what were the biggest takeaways?
Investors who participated in the survey are optimistic about real estate this year, and many of them expect price growth in 2020. Forty-four percent of investors surveyed said they thought house prices would increase by 0 to 5% by the end of this year, while 18% thought it would increase by 5 to 10 % and 15% said prices would remain stable.
Melbourne is the area that investors have identified as having the best prospects for capital growth over the next five years, 39% of respondents having chosen the Victorian capital as the preferred investment location for growth, followed Brisbane (37%), then Sydney (33%). Nineteen percent also cited regional Australia as a region with potential for capital growth over the next half of the decade.
Interestingly, I think if we had conducted this survey six months earlier, we could have generated extremely different results, because six months ago, the environment was very different. We were in the middle of a federal election; the impact of the royal commission on the banking and financial sector is still ongoing; and real estate prices in Sydney and Melbourne in particular were still correcting the back of a wave of massive growth.
This year has been such a roller coaster for real estate investors that I think we are all delighted to see some stability returning to the market – or, at the very least, the perception of stability.
Meanwhile, despite an optimistic attitude towards investments this year, investors are still facing some obstacles that could prevent them from developing their investment portfolios.
Forty percent of those polled said that stricter bank credit policies for investors had affected their ability to buy another property, while 26% cited the ease of servicing loans as a another limiting factor.
Despite the drop in interest rates, it is the stricter credit criteria of the banks that are the problem. Uncertainty about the economy and the lack of equity or funds for a deposit were also cited as obstacles preventing the purchase of another property for investment.
I encourage those who reflect on their real estate journey to date and wonder what would be the next ideal step to consider their real estate goals. Many survey respondents (43%) revealed that they were investing in an effort to provide a better lifestyle and more choice for their families, while 41% aimed to become self-funded retirees and 38% cited early retirement as a goal.
So, what are your real estate goals? Take a moment to really focus not on the concept of retirement but on the concept of choice. In the end, I believe it is wealth and property: creating choices so that you can live life on your own terms.
Sarah Megginson is a real estate and financial journalist, passionate investor and editor of the magazine Your Investment Property
Top suburbs:
werribee
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lambton north
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toowong
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lockridge
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south cardiff
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