It is fast becoming "the new normal" for real estate investors to invest in markets far from where they live.
A study by MCG Quantity Surveyors, which analyzed investor transactions during the year to January 2020 and during the year to 2021, has revealed the changing buying habits of investors, especially when it comes to where they choose to invest.
The average distance between an owner & # 39; s home and their investment property increased significantly over both periods, from 294 kilometers to 559 kilometers.
MCG Quantity Surveyors Managing Director Mike Mortlock revealed that remote and borderless investments have been boosted by the COVID-19 pandemic.
"Rather than sinking in during closings, it seems investors are looking for real estate opportunities further than ever from their home suburbs," he said.
“Perhaps most telling is the rapid increase in the number of people searching for assets located exceptional distances from their homes. "
The study found that the proportion of buyers investing in locations more than 200 kilometers from their homes rose to 44.7% in November 2021, from 29.5% in January 2020 .
Interestingly, the share of buyers investing in properties more than 1,000 kilometers from their homes more than doubled, from 7.7% in January 2020 to 17.15% in November 2021.
“The latest figures show that only 6.75% of Australia-based investors have bought in their home suburbs. I would say this is a dramatic drop from what we would have seen 10 or 20 years ago, "said Mr. Mortlock.
Why distance shopping has become attractive
The study also found Queensland to be the top choice for many investors, with over a third of investors taking advantage of the booming conditions in the state.
Close behind Queensland was New South Wales, which also shared a third of all investors.
About 11% of investors chose to invest in Victoria, while all states accounted for the remaining 15%.
Mr Mortlock has stated that there are several reasons behind the trend towards distance shopping and at the top of the list is the changing dynamics amid economic bottlenecks and uncertainties.
"Technology makes it possible to buy property from the comfort of a locked house. Modern investors see the whole of Australia as a potential market – not just their state or city, ”he said.
Also, Mr. Mortlock believes that remote shopping has become more convenient as more and more investors rely on local buying agents.
“In addition, the growing popularity of regional offshoring in this remote working world has boosted these real estate markets. "
A recent report from CoreLogic found that growing demand in regional markets had already raised concerns about affordability.
“While the numbers may come back a bit, I suspect the world has changed for good and distance shopping is well and truly established,” he said.
“There is little evidence that the percentages will soon return to pre-pandemic levels. "
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Photo by Helena Lopes on Unsplash
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werribee
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bendigo
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stafford
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victoria park east
,
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