Do you plan to buy an investment property in 2020? Or maybe you are considering buying a new house?
Well, you will be in good company, because 68% of respondents to a recent survey think that the time has come to invest in residential real estate. And 20% of respondents plan to buy a new home in 2020.
This despite the fact that 43% of those questioned believe that the value of Australian properties will only increase by 0 to 5% next year. Obviously, they are taking a long-term view. Another 18% of respondents estimated that the value of real estate would increase by 5 to 10% in 2020.
What is it?
Recently, Property Update, Your Investment Property Magazine and onthehouse.com.au surveyed their readers and more than 1,800 real estate investors and would be investors commented on the 2019 real estate investor survey, the largest and longest poll of this type in Australia.
Operating since 2011, it offers a rich and dynamic overview of the evolution of trends and feelings of real estate consumers over time.
You can download the full survey results by clicking here, but for now, let's take a look at some of the highlights.
Who participated in the investigation?
A wide range of Australians – 1,796 ordinary moms and dads responded.
The fact that they already subscribed to Property Update or Your Investment Property Magazine meant that they were a captive audience of people already interested in property.
When asked about their combined family income, 2% earned less than $ 50,000 while 29% earned more than $ 200,000, but most earned combined family income between $ 100,000 and 200,000 $.
89% of respondents owned at least one investment property, but a wide range of investors participated in the survey:
• 11% had no investment
• 22% owned an investment property
• 21% owned two investment properties
• 15% owned three investment properties, and up to 4% owned 10 or more properties
Some surprising results:
• 19% of respondents were renters (rented their house but owned an investment property, and 48% of respondents viewed rent-seeking as a means of accessing the real estate market.
While 68% of respondents believe the time has come to invest (compared to 52% in 2018 and 59% in 2017), only 42% of those surveyed said that they planned to 39 buy an investment property next year.
Interestingly, this is the same percentage as last year. I would have thought that the more dynamic market conditions would have increased the number of people planning to invest.
20% of respondents (down slightly from 23% last year) did not know if it was the right time to invest in real estate. I guess they are a little scared of all the negative news.
20% of respondents plan to buy a new house in 2020. This figure has remained more or less the same in recent years.
While 19% of respondents plan to seek advice from a real estate strategist or advisor, I found it surprising that 32% seek no advice the next time they buy a property.
This is a concern because, despite the large amount of research material and information available for free, there is one thing that you cannot get on the Internet – and it is the prospect that only comes after years of field experience.
Although our readership is reasonably distributed between men and women, we found it interesting that among the 1,796 people who responded, 74% were men. Now it's interesting and you can read whatever you want in this statistic. Pam, my wife, said it was because the men had been trained to do what they were told – but I'm not sure.
Some not-so-surprising results:
• Investors are more confident in our real estate markets.
61% of respondents see property values ??increase next year, while at the same time last year 84% of respondents expected property values ??to decrease during the year.
• Only 30% of respondents believe it is time to lock in interest rates (up from 40% last year), suggesting that most believe that interest rates 39; interest will decline further.
• 42% of respondents find that the recent stricter credit criteria have had an impact on their ability to buy another property.
It is interesting to note that this is considerably lower than in recent years (2018 – 50%; 2017 – 48%; 2017 – 46%), which suggests that the lending criteria of banks are loosening up a bit.
• Melbourne (39%) was considered the capital most likely to generate strong capital growth over the next 5 years, followed by Brisbane (39%). Note: the figures in the graph below add up to more than 100% because more than one answer was allowed for this question.
• A detached house in the inner and middle suburbs of a capital was considered the best medium term investment (36%) while 25% will look for a property with potential for added value. Obviously, plan properties disagree with less than 1% believing they are making good investments
• 35% of these investors saw an opportunity to "fabricate" capital growth by buying properties with potential for renovation or development. It is slightly less than last year (42%).
The bottom line:
It is clear that the confidence of real estate investors is strong and those who can afford it are planning to take advantage of this new real estate cycle by buying another investment property or a new house if finances allow.
Our survey shows that Australian real estate investors focus on long-term capital growth, rather than cash flow, and many are looking for a property that has the potential to add value, rather than Wait until the market does the heavy lifting.
Despite hopeful plans for the coming year, investors still face a few hurdles that prevent them from buying more investment property, especially more stringent bank lending criteria.
40% of respondents said that stricter bank credit policies for investors have affected their ability to buy another property.
26% also cited difficulties related to ease of loan management as another factor preventing them from buying their next investment.
Click here to read the full survey results.
Michael Yardney is CEO of Metropole Property Strategists,
which creates wealth for its clients through independent and impartial advice and advocacy.
He is a successful author, one of Australia's foremost experts on wealth creation through property, and writes the Property Update blog. necessarily reflect the views of your investment property.
